Can I get insurance for my marijuana grow? And is that worthwhile?
YES AND YES. For a long time, it was an open question as to whether marijuana inventory was insurable as a matter of law. That question was open even in situations where an insurer had intentionally written a policy tailored to a canna business. Strange, right?
In thinking about this situation, it is important to remember that insurance policies are just a species of contract. We should also note that if two parties agree to do something illegal, a court might consider their contract void and unenforceable. Courts have used the “illegal contract” theory in cannabis cases over the years, including a few insurance beefs. Hopefully, a recent Colorado federal court decision in Green Earth Wellness Center, LLC v. Atain Speciality Insurance Company will put the skids on that.
Green Earth is a medical marijuana dispensary and grow operation in Colorado Springs that’s had a run of terrible luck. In 2012, smoke and ash from a wildfire “overwhelmed” Green Earth’s ventilation system and damaged $200,000 in mother plants and clones. Atain investigated the claim for several months, then denied it in July 2013. Around that time, Green Earth’s grow facility was robbed when someone snuck in through the roof. So Green Earth filed another claim with Atain, which Atain again denied, finding that the damage did not exceed Green Earth’s deductible.