Despite cannabis being considered illegal at the federal level, a recent insurance payout for a marijuana crop loss shows that the market for coverage is still relevant.
While news about Napa Valley’s vineyards made the headlines during last year’s wildfires, less known was the loss suffered by cannabis producers who were also based in the region.
CBS News reported that there were at least 3,000 cannabis farms in areas affected by the wildfire last year.
One cannabis farmer in Carpinteria, California, unfortunately lost his entire crop in the incident, but not directly due to the blaze; rather than catching fire, the farmer’s crop was damaged by ash from the nearby flames. When the cannabis was tested, high levels of arsenic, asbestos, lead, and magnesium were detected. The crop was then written off as a total loss.
Fortunately, Brown & Brown Insurance handed out a $1 million payout for that insured loss. The insurer has about 20 cannabis cultivators as clients and has plans to pay out millions more to other clients whose crops were similarly lost, PotNetwork reported.
Brown & Brown’s London operation will be handling the wildfire insurance payouts.
Due to the financial hit it took for covering all those cannabis producers, Brown & Brown is discontinuing its specialty coverage. However, company president Matt Porter told PotNetwork that it is looking for other carriers in Europe to take over the business.