Marijuana legalization, even if it is for medicinal purposes, has been something a long time in coming. Unfortunately, now that it's a reality, there are aspects of the industry that are still working to catch up with its unique needs. Insurance for growers and others is one of these areas. On the bright side, commercial general liability insurance (CGL) is one product that carriers are working to introduce that is both practical and affordable.

Simply put, CGL is a type of business insurance policy that can be written by a carrier for growers of medical marijuana and associated businesses. This type of insurance is designed to help protect a business from claims that might arise associated with negligence, occurrence, or offense based on unique circumstance. What is covered by a policy depends both on the terms written into the coverage as well as the unique circumstances of the business. A policy could, for example, reference property damage, bodily injury, and personal and advertising injury that could likely be made by third parties for damages.

In addition to liability limits, a policy could be written that would cover the particular needs of marijuana growers.

Read on for more useful information or click to instantly find a local insurance expert to help you with insurance for your marijuana growing facility/business.

Growing Market - Not going up in smoke.

A recently published report showed that the legal marijuana market in the United States, which is comprised of everyone who is legally entitled to possess the product, makes up more than $1.53 billion. Not only that, but several studies have shown that in the next five years, the market will grow more than 700 percent over today's figures.* In two years alone, the market is expected to grow more than $10.2 billion. The gains reported are expected to be from and increasing demand in existing state markets, as well as from newly emerging state markets coming online within the next few years.

Interestingly, although the growth of these future markets is practically a given, one area where the growth is not so sure is in that of states that are still debating where they want to stand on the issues related to marijuana legalization, and in what form that will take, whether legal and/or medicinal use only. As a result, many insurers are also still evaluating this segment as well as what coverage, if any, they are prepared to offer to businesses selling and growing medical or recreational marijuana products.

Strangely, there isn't a lot of stigma associated with those who specialize in this class of coverage, say agents and brokers. After all, most reason, somebody is going to end up making the money, so they shouldn’t be deterred by a stigma that goes along with it. Instead, they should learn about the needs of the segment and their needs so they can take advantage of the growing business opportunities of the market.

The legalization of marijuana for recreational use in those states that have adopted such statutes, such as Colorado and Washington, has led to a plethora of new business ventures wherever they have been adopted. The Associated Press reported in December 2013 that the state of Washington alone received nearly 1,700 business applications between the license application window that opened on Nov. 13, 2013, and mid-December for those looking to grow, process, or sell marijuana under the new recreational marijuana law.

According to the Denver Post, the Colorado Department of Revenue reported that marijuana sales in Colorado totaled $15.3 million for the first five months of this year, and the state has seen record tourism numbers since the voters’ legalized marijuana.

Whether it is a grower, a dispensary owner, a supplier or processor, marijuana entities looking to sell to the public are now businesses that need insurance, just like any other.

Insurance coverage for nearly any business engaged in the marijuana field is only one of many issues that need to be resolved. The owners of these businesses need help figuring out issues such as: Where can I set up a dispensary? What are the state regulations of my area? What is my workers’ compensation liability? And what are the liabilities that other businesses have such as theft, fire, business interruption, etc. Each has unique issues that need to be addressed need to be identified and addressed. There are a lot of investment dollars going into the marijuana industry, and everyone is concerned about what will happen to their investment if they are shut down or don’t obey state regulations.

Insurance coverage requirements can include but are not limited to workers’ compensation, property damage, business interruption, theft, product liability, cargo insurance, BOP coverage, equipment breakdown, and cyber liability – particularly for those medical marijuana dispensaries that store their patients’ personal information.

There are also opportunities for agents beyond the marijuana-related businesses themselves, because they work with vendors that welcome the expertise of an agent who specializes in the marijuana industry can offer.

It is a brilliant marketing campaign. Most of the people also have businesses outside of the marijuana business and they made money before this. The agent, by promoting the fact that they do this segment, can get other policies from those working with the field, but have nothing to do with marijuana, except how they work with the operations themselves.

Simply put, agents who provide their insurance knowledge to marijuana growers and provide insurance coverage can eventually branch out into other fields, not necessarily marijuana, but which do involve farming operations. These ancillary businesses can help agents feed their businesses based on a single classification, which is marijuana. And an agency that relies on referrals, can take them from others in the marijuana business.

The insurance business is one that easily traces its progress on its ability to weather change, and certainly the changes that have taken place over the past few years in marijuana can prove that, and there can be little doubt that as the social trends of marijuana use continues to change, so will the insurance needed and sold to protect it.

* The State of Legal Marijuana Markets 2nd Edition,” The ArcView Group.