Is There Cannabis Insurance?
Let's say that a hurricane got your grow. Can you insure your grow, get your money back and build again?
Yes, there are companies out there that will insure cannabis businesses. My grow is covered, my plants are covered, my dispensaries are covered, the product is covered. Big name insurance companies aren’t on board yet, you're not going to get AllState covering your cannabis business.
You get these mom and pop insurance companies that find this cannabis niche and they cover it because they know they can charge high margins. They can charge higher price points on the insurance because they know people will pay it. And we do! So there is insurance out there for your product and you definitely can insure your grows and your dispensaries and everything all the way down to the plants themselves.
Now what's tricky is you have to figure out the worth of each of those things. A dispensary is pretty simple because each thing has a retail price attached to it, right? But for a grow, it's a little bit different because you grow each plant. How do you put a value on one plant? If it's a bloom, it's simple. This plant averages this much yield, so therefore each plant is worth let's say $400 for example.
Then you have to consider things like clones. How much is the clone worth? Clones are like $10, maybe $20 if they have amazing genetics. Clones are really not expensive, but they turn into a plant worth a couple hundred dollars. Then you have your moms, so how much is a mom worth? The mothers are what produce your genetics. They are what harbors your good, strong phenotypes to produce your grows.
So how do you put a monetary value on the two moms that you have for the best strains that you're selling, that you're making $40-50,000 a month on? You really have to work closely with the insurance companies, especially in such a new industry. You have to explain all of this to them because they have no idea. If you tell them you want to value out your moms, they're not going to understand what you're talking about. You're definitely going to have to work with them which can be tedious.
However, because you get to work with them from the beginning of the industry, they haven't figured it out. You can kind of take advantage of that too, because they don't know they could charge more than they do. At least you have that on your side in the beginning for now.
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Cheers!
.: Adam