The 7 most asked questions about cannabis insurance in Minnesota

1. Is insurance required for operating a cannabis business legally in Minnesota?

• Is it Mandatory?
  No—Minnesota does not currently have or require cannabis dispensaries to carry insurance to operate legally. However, insurance coverage may be necessary to secure a lease (sign the lease and get the key), financing, or fulfilling other contractual obligations.

2. Which types of insurance policies are essential or recommended for cannabis businesses?

Cannabis businesses should explore a variety of coverages tailored to their operations:

• General Liability Insurance
  Covers bodily injury or property damage claims from third parties. It is the first policy most businesses would purchase.
• Product Liability Insurance
  Crucial for covering claims arising from adverse reactions or defects in cannabis products. This is often excluded, but can be added back in.
• Property, Business Personal Property Insurance & Business Interruption
  Protects against damage, theft, or other perils affecting facilities and operations—even off-site stored inventory. Inventory coverage is often a separate limit. A property loss triggers business interruption coverage.
• Workers’ Compensation Insurance
  Minnesota law requires workers’ comp. insurance for any business with employees. This policy helps shield you from employee injury claims.
• Commercial Auto Insurance
  Required if business-owned vehicles are used (e.g., for delivery or transport). Auto insurance is required in the state of Minnesota.
• Crop Insurance
  Relevant for growers—covers losses from events like crop failure or theft.
• Directors & Officers (D&O) Insurance, Umbrella, Equipment Coverage, etc., are available and often explored for broader protection if desired.

3. What about cannabis insurance costs—how much can businesses expect to pay?

Costs can vary based on business type, size, location, and coverage limits:

• General Liability: $2,500 – $7,800 annually for smaller operations.
• Business Personal Property: $400 – $1,600 annually.
• Commercial Auto: $800 – $3,400 annually.

4. Can policy limits be an issue?

Absolutely. Many insurers offer coverage caps, such as $1 million per occurrence / $2 million aggregate, which may not be adequate for larger operations seeking higher limits, like $5 million or more.

5. What factors influence insurance premiums for cannabis businesses?

Key considerations include:

• Type of operation (dispensary, cultivation, transport, manufacturing)
• Business revenue (gross sales) and asset value
• Number of employees
• Claims history
• Location and security measures in place
• Coverage and deductibles chosen

6. How do you choose the right insurance provider or broker?

• Look for agents or brokers with experience in the cannabis industry—they will understand the unique risks posed by cannabis and the specialized coverage required.
• Ensure the broker offers a wide range of insurance companies tailored to your operation. E&S (excess and surplus lines) markets are not the only options. Many standard carriers now offer cannabis insurance programs, which are generally a lot less expensive.
• Shop around—pricing, exclusions, and policy terms can vary significantly across insurers. Start by calling us at 952-222-8073.

7. How do evolving state or federal changes impact cannabis insurance?

• As adult-use cannabis regulations evolve in Minnesota, insurance requirements, available coverages, and premiums may shift accordingly.
• At the federal level, initiatives like the SAFE Banking Act or CLAIM Act could open up more insurance options and financial services in the future.