Workers’ Compensation Cannabis Class Code Roulette

Dec 31, 2020

Determining the proper classification for cannabis businesses is not one you want to take a gamble on.  If you bet on a specific class code and it isn’t accurate, your client could suffer significant premium penalties at the time of an audit or worse – costly coverage gaps.

Jencap has a winning Workers’ Compensation team.  Please reference the below cannabis classification guide when you are quoting your next risk.

Cannabis Cultivation Operations

  • Classification 0035Florists – cultivating or gardening
    • Cannabis buds are in fact flowers
    • Cannabis cultivation can be indoors or outdoors, using conventional or hydroponic methods
    • Includes nursery operations by cannabis farms
    • Classification 0035 was amended effective January 1, 2016 to specifically include the cultivation of marijuana
      • “Marijuana” is proposed to be replaced with “cannabis” effective January 1, 2021
    • Classification 0035Hemp Growing
      • Most California hemp is grown for CBD oil extraction; industrial hemp for fiber is mostly imported
  • Classification 0005Nurseries – propagation and cultivation of nursery stock
    • Nurseries that do not grow cannabis for harvest but propagate nursery stock (seedlings or clones) for sale

Cannabis Processing

  • Classification 0035Florists – cultivating or gardening
    • Includes initial drying, trimming and bulk packaging of the harvested buds
    • Trimming may be done by the grower, or done under contract by a trim specialist 
  • Classification 4611Drug, Medicine or Pharmaceutical Preparations Manufacturing
    • Includes the production (compounding, blending or packaging) of drugs
    • Packaging buds for individual sale

Cannabis Products Manufacturing

  • Classification 4611Drug, Medicine or Pharmaceutical Preparations Manufacturing
    • Production of cigarettes (pre-rolls)
    • Manufacture of Cannabidiol (CBD) products and oil extraction
    • Manufacture of concentrates, tinctures, extracts, hashish, vaporizing products
  • Classification 6504Food Products Manufacturing or Processing
    • Manufacture of cannabis-infused food products (“edibles”) that are not baked goods
    • Manufacture of infused candies, infused butter, infused coffee mixes and similar products
  • Classification 2003Bakeries and Cracker Manufacturing
    • Manufacture of cannabis-infused baked goods such as cookies or brownies
  • Classification 2163Bottling – beverages
    • Manufacturing of cannabis-infused beverages

Cannabis Sales and Licensing

  • Classification 8017Stores – Retail
    • Retail cannabis dispensaries are classified as 8017(1) – it also applies to marijuana delivery sales companies that may not operate a walk-in retail store
    • Retail outlets may also perform packaging of individual orders, final trimming, cigarette rolling and similar operations to prepare the products for retail sale

Cannabis Delivery

  • Classification 7198(1)Parcel Delivery and Messenger Service Companies
    • Contract delivery of small parcels
  • Classification 7198(2)Armored Transport Services
    • Secure transport of cash or other valuables using armored vehicles
    • Includes drivers, money sorters and counters, vault clerks and security guards in connection with transportation services

Other Cannabis-Related Operations

  • Classification 4511Analytical or Testing Laboratories
    • Independent testing of cannabis and cannabis products for potency and/or purity
  • Classification 7721(2): Security Guard or Patrol Services
    • Independent security at cannabis growing, processing or sales locations
  • Classification 9424(1): Garbage or Refuse Landfill, Transfer Station and Material Recovery Facility Operations
    • Specialized disposal of cannabis trimmings and other green waste

Jencap is a national wholesaler that specializes in monoline Workers’ Compensation.  We have exclusive market access and niche programs designed to place all of your unique risks.

The Jencap Workers' Compensation Insurance Team

The Jencap Workers' Compensation Insurance Team

Workers’ compensation is not a generalist’s game. Jencap’s dedicated division of industry-leading workers’ compensation experts understands every facet of this complex coverage line — from multi-state operations and high-hazard risks to United States Longshore and Harbor Workers Compensation Act (USL&H), and everything in between. No matter your clients’ industry, state, experience modification factor, premium size, or class code, the Jencap workers' compensation team has you covered.
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