If you grow cannabis commercially, it’s becoming more and more crucial to secure proper business insurance for your crop.

There are plenty of risks that can wreak havoc on business owners that grow product, including damage caused by fire and smoke, flooding and electrical hazards, and mechanical breakdown of equipment that’s needed to regulate the growing environment and temperature of the crop.

The biggest challenge these business owners face in securing the proper coverage, however, is often based on the literal location of their operations.<!--br {mso-data-placement:same-cell;}-->cannabis Crop Insurance

Indoor Cannabis Insurance Factors

If you grow cannabis inside an enclosed facility, like a greenhouse or a custom-built space, your production costs will be higher. Overhead expenses like power, building maintenance, security, nutrient feeds and supervision will undoubtedly take more from out of your bank account.

The good news is that growing cannabis indoors is an advantage for a majority of cannabis insurance providers. Indoor grow-ops have more insurance options right now because of the controlled environment they sustain.

While the potential for losing a good chunk of crop certainly exists if something were to go wrong inside the building, insurance packages are readily available to cover things like crop contamination, fire and other possible risks.

To help drive down the cost of an insurance quote, business owners should have an abundance of organizational and operational data. This includes knowing the air temperature to humidity levels, soil condition, how much nutrients the plants are receiving, sheltering and supervision details of the crop and so on.

With this data, insurance agents can help reduce exposure to unknown and outside factors.

Outdoor Cannabis Insurance Factors

If you grow cannabis outdoors, your exposure to risk increases dramatically.

If a cannabis company has a bad streak with local weather, their total seasonal yield could be deeply affected.

There are even more wildcards at play that could seriously set back a cannabis yield if you grow outdoors, including:

• Unexpected weather fluctuations and storms—heat waves, dry spells, snowfall, windstorms, etc.
• Accidental chemical exposure, like pesticides and sprays
• Unwanted visitors, theft of product, even unintentional damage to the yield of the crop from improperly trained staff
• Incredibly strict testing requirements in California—a number of pesticides, heavy metals and range of other factors will deem crop non-compliant

In addition, as climate challenges continue to plague farming and agriculture in the coming decades, the cannabis grower will also need to adapt to this evolving risk.

There is one big advantage that the outdoor cannabis cultivator has going for them: a lower overhead cost.

With both light and temperature provided for free and regulated naturally, the outdoor grower of cannabis can make more money than the indoor operation if weather permits.