Running a cannabis business means navigating an industry full of opportunity — and risk. Between evolving laws, high-value inventory, and strict compliance requirements, even one insurance mistake can cost thousands of dollars or worse — your license.

At OG Cannabis Insurance, we specialize in helping cannabis entrepreneurs protect what they’ve built. Whether you run a dispensary, cultivation site, or delivery business, avoiding these seven common insurance mistakes will save you money and headaches in 2025.

1. Assuming General Insurance Covers Cannabis Operations

Many cannabis business owners believe a standard commercial policy will cover their operation. Unfortunately, that’s rarely true.
Because cannabis remains federally illegal, most general insurance policies exclude cannabis products — meaning any claim related to cultivation, sale, or transport could be denied.

✅ Solution:
Always verify your coverage is written specifically for cannabis operations. At OG Cannabis Insurance, every policy we provide is 100% cannabis-compliant.

2. Underestimating Product Liability Risks

From edibles to vape cartridges, cannabis products carry significant liability exposure. A single contaminated or mislabeled product could trigger lawsuits, recalls, and reputational damage.

✅ Solution:
Secure Cannabis Product Liability Insurance that protects your dispensary or manufacturing business against costly claims.

3. Ignoring Crop Coverage

Many cultivators assume property insurance protects their crops — but that’s not the case.
Fires, mold, theft, and equipment failures can destroy months of work, and standard property policies usually exclude plant material.

✅ Solution:
Invest in Cannabis Crop Insurance designed to cover living plants from seed to sale.

4. Skipping Workers’ Compensation

Employees in the cannabis industry face unique risks — heavy equipment, chemical exposure, and security hazards.
Skipping workers’ compensation not only breaks state law but can also result in severe fines and lawsuits.

✅ Solution:
Ensure every employee, from trimmers to budtenders, is covered under a cannabis-approved workers’ compensation policy.

5. Not Understanding State-Specific Requirements

Each state has its own cannabis regulations — and that includes insurance mandates.
For example, New York requires proof of certain coverage levels for licensed dispensaries, while California’s laws emphasize general and product liability compliance.

✅ Solution:
Work with a broker who understands state-by-state cannabis insurance requirements. OG Cannabis Insurance provides coverage tailored to your state’s laws.

6. Forgetting Cyber & Theft Coverage

With dispensaries handling sensitive data and large cash volumes, cyberattacks and theft are among the top risks facing cannabis businesses today.

✅ Solution:
Add Cyber Liability and Theft Coverage to your policy. These options protect against digital breaches, ransomware, and physical inventory loss.

7. Choosing a Broker Without Cannabis Expertise

Perhaps the biggest mistake of all — working with an agent who doesn’t specialize in cannabis insurance.
Traditional brokers may not understand the industry’s legal nuances or coverage gaps, which can lead to denied claims or noncompliant policies.

✅ Solution:
Partner with experts who know the industry inside and out. OG Cannabis Insurance works exclusively in the cannabis sector, ensuring every policy fits your exact needs and meets regulatory standards.

Final Steps: Avoid Cannabis Workers’ Comp Insurance MistakesConclusion

Avoiding these seven mistakes can save your business thousands and protect your license from unnecessary risk.
At OG Cannabis Insurance, we’re here to simplify the process and provide complete, compliant coverage — from seed to sale.

📞 Get your free cannabis insurance quote today at OGCannabisInsurance.com or call us to speak directly with a cannabis insurance specialist.