Grow, Gift, Repair

Theft issues in Cannabis insurance

Theft is a weed that is spreading through the US cannabis industry with alarming speed. Its roots are deep and complex, spanning from casual grow operations right the way through to large commercial dispensaries. They thrive on one thing – the delicious taste of green dollar bills, an inevitable outcome to the theft and re-sale of any cannabis-related product.
Approximately 90% of insurance claims in the US cannabis industry so far have involved an element of theft, according to Gerrit Nagarwalla (pictured), claims supervisor at Canopius Group, and panellist at Insurance Business America’s upcoming Cannabis Cover Masterclass in Denver and Los Angeles in March 2020. This observation is true across the spectrum of the industry, from minor grow operations to huge commercial cannabis enterprises, he added.

“One of the biggest trends I’ve seen within these theft claims is that many of them tend to involve some element of inside information. It might not be direct employee involvement – we haven’t yet had any claims where we’ve been able to determine that an employee was directly involved – but a lot of these thefts and the manner in which they’re completed, imply that the people involved had inside information,” Nagarwalla told Insurance Business. “They either knew exactly where to break into the building to avoid detection by motion detectors, or some other way to get around the alarm, and they just have so much information on how to get in that property that it’s got to have some element of inside info.

“That’s a really tough thing to deal with. One of the difficulties is having definitive proof of inside involvement. A lot of what we have right now is just the surmise of our claim investigations. Another challenge is that a lot of these jobs, especially the grow operations, aren’t high dollar jobs. They’re paying people $15 or $20 an hour, and these employees are working with millions of dollars’ worth of product. At some point, they’re going to deal with employees getting ideas or telling friends about the operation.”