8 Reasons your Cannabis Clients Need Site Pollution Liability Coverage

The cannabis industry is expected to see exponential growth over the next few years. Market experts project the industry to hit $45B in 2025 and up to $100B over the next 10 years. That growth will only be possible if growers, processors, laboratories and retailers are able to successfully mitigate risk. The various processes involved to take cannabis from seed to sale all have their own unique exposures that must be met with the proper insurance coverage.

Jencap’s cannabis specialists often see cannabis businesses without Site Pollution Liability coverage. They’ve outlined 8 reasons why your cannabis clients need this coverage in place:

  1. Cannabis growers are exposed to pollution liability claims resulting from fertilizers and other chemicals used in the growing process (indoors and outdoors).
  2. Cannabis processors commonly use chemicals like ethanol to produce oils and concentrates and to extract cannabinoids from the product and face exposure from these operations.
  3. Retail dispensaries face pollution exposure from building heating/cooling systems, building maintenance and other operations.
  4. Cannabis extraction requires the use of harsh solvents like propane, ethanol, butane, and isopropyl alcohol – usually in high concentrations.  These solvents, if not properly disposed of, get washed into sewers and water supplies where they harm aquatic life and get emitted into the environment in the form of airborne VOC emissions.
  5. Businesses growing cannabis plants for processing into consumer products have the following pollutants of concern:  nitrates, phosphorus, pesticides, and fungicides.
  6. Hazardous waste includes extraction solvents, contaminated lab debris, and cannabis lighting equipment. All of these can negatively impact the environment by infecting landfills, releasing harmful VOCs into the air, and polluting water supplies.
  7. Wholesale distributors of smoking accessories and vaping products are run out of warehouses and those products stored have hazardous chemicals like butane and isopropyl alcohol, which are highly flammable.
  8. Chemicals/solvents are often used in laboratories to extract or breakdown compounds for analysis. Once used, these chemicals/materials need to be disposed of properly. If not properly disposed of, businesses are at risk for creating air emissions, water discharges, hazardous and non-hazardous waste.

Jencap’s dedicated cannabis specialists remain one step ahead of industry trends to ensure your clients’ businesses have the insurance protection that they need – both for today and tomorrow. To learn more about our industry-leading cannabis insurance solutions, click here.

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