Cannabis Businesses Are Thriving, but These Workers’ Comp Challenges Remain

Cannabis is a growing industry, with a third of the United Stated being recreationally legalized, and legal for medical use in over 20 states. Even though this is true, marijuana remains federally illegal. In the article written by Jonathan McGoran, he discussed the different difficulties the cannabis industry faces due to its odd position in the business world. The first thing McGoran mentions is the lack of access to federal banking. With no federal banking system, it makes it difficult to insure the business. This is also true regarding the lack of security with insurers. Because the business is not federally legal, carriers and insurers run the risk of bank accounts being frozen, inadequate funding, and general reputational concerns. Ultimately creating more work on the insurers plate. When it comes to workers comp, if bank accounts are inconsistent, it makes things harder when it comes to payroll. There is also just a general lack of carriers who are okay with insuring a cannabis business. The second difficulty that Jonathan mentions is the history f the industry. Coming from a typically under the table operation, standard business practices are relatively new to some of these cannabis businesses. McGoran mentions code misclassifications, things like loss control being a problem, and then general safety of employees, all of which affect their workers comp. the last challenge mentioned in the article is the larger versus smaller businesses. Larger companies have the capability to scale and grow, whereas smaller companies have fewer opportunities. McGoran mentions that this can be both good and bad. While larger companies can invest in safety programs, whereas smaller companies might not, but then smaller companies have lower risk exposure being a smaller company.  Both smaller and larger cannabis companies see the prs and cons of their size, but the workers comp issues remain in place.

To see more details about the hurdles the cannabis businesses face, check out the link below:

By: Jonathan McGoran | September 19, & McGoran, J. (2022, September 20). Growing pains: Cannabis businesses are thriving, but these workers' comp hurdles remain. Risk & Insurance. Retrieved October 4, 2022, from https://riskandinsurance.com/growing-pains-cannabis-businesses-are-thriving-but-these-workers-comp-hurdles-remain/