With the legalization of marijuana in effect across Canada, dispensaries across the country have to wade through new legalities to ensure their success.
One such issue is insurance.
Like any retail business, insurance is vital for a business’ survival. And in the case of new dispensaries popping up throughout Canada, this topic can be unfamiliar and challenging.
However, there are certain realities surrounding the marijuana business — even following the legalization of recreational marijuana — that could make it a riskier enterprise.
For example, robberies and burglaries are real threats.
While pre-Cannabis Act dispensaries, robberies (of both customers and store owners alike) of marijuana dispensaries do occur on a regular basis. For insurers, this could be cause for very high insurance premiums, thus adding to your business expenses.
The second aspect, which stems from the risk of armed theft and break-ins, is the need to stop or prevent such situations.
This is where having a professionally-designed and installed security system is worthwhile, not just in terms of protecting your assets, but potentially lowering your insurance premiums as well.
Security Requirements Are Directly Linked With Insurance for Cannabis Dispensaries
Part of the confusion revolving around insurance standards for new marijuana dispensaries is the fact that security requirements are still evolving.
For medical marijuana producers, the Access to Cannabis for Medical Purposes Regulations (ACMPR) extensively covers the physical security requirements.
However, ACMPR does not cover recreational marijuana dispensaries.
In the case of these dispensaries, the federal Cannabis Act defers the right to define marijuana markets to each individual province.
This includes their respective security requirements, which you can find in documentation from the Alberta Gaming and Liquor Commission, Liquor and Cannabis Regulation Branch, Alcohol and Gaming Commission of Ontario, and others.
In most cases, the physical security requirements are quite similar to ACMPR, but there are a few differences and they’re ever-evolving. Dispensary owners must keep up-to-date on these regulations.
Insurers Are Still Assessing Dispensary Risks
Just like how the regulations around physical security are evolving, so is the insurance process.
Insurers are still in the process of assessing these risks.
Other variables, such as the location of your marijuana store and the occurrence of crime in your area, could also affect your premiums.
To stay ahead, dispensary owners will have to look at traditional commercial coverage for property, equipment, inventory, and other aspects to determine potential insurance premiums.
Furthermore, you will have to determine the best security plan to keep that coverage.
Insurance for Medical Marijuana Dispensary: Types of Coverage Available
Many dispensaries use standard commercial insurance. However, some specialty cannabis insurers offer insurance products designed for dispensaries.
Here are the insurance opportunities you’ll need to look at:
- General Liability: This is a must-have for all dispensaries, and will often be required in order to lease retail space for your business.
- Product Liability: This type of insurance is especially important for dispensaries. In the case that any product causes harm to a customer, this insurance can provide protection.
- Business Income and Extra Expense Coverage: This is vital in the case of a situation like a fire or a flood that reduces or halts your supply. If you are suffering financial losses from those types of situations, this insurance will help.
- Property Insurance: This is one of the most common forms of insurance and vital for your risk management strategy. It includes general protection for property related to your dispensary, such as dispensary equipment, inventory, etc.
- Cyber Insurance: Like any other business, your dispensary is open to a number of cyber-attacks. Since your dispensary is legally required to protect any customer data, this type of insurance is necessary to shield you from any legal liability if a data breach does occur.
Thus, your physical security plan must be designed to ensure coverage in each of those areas.
Professional Security Systems Protect Your Coverage
From a security standpoint, as a dispensary owner, you are responsible for the protection of your staff, property, and investment. A comprehensive security system is necessary to ensure that.
The security your dispensary needs will include:
- Access Control
Only authorized staff will be able to access certain areas of your dispensary. You can use keycodes, cards, and biometric measures to restrict access.
Moreover, you could also pair this with a ‘rings of protection’ approach wherein the room with your product inventory (which, in Alberta, must be stored in a vault) is only open to authorized staff. This makes theft much more difficult.
- Intrusion Detection with Alarm
Be it overnight, weekends, or on holidays, an intrusion detection system will monitor your store 24/7 for irregular activity. In case of a break-in, the system will trigger an alarm and, if you configure it so, alert law-enforcement as your first-respondents.
- 24/7 Visual Monitoring
24/7 visual monitoring via a CCTV camera network will serve several functions.
First, it will keep track of all activity in your point-of-sale area, product storage room, receiving and shipping areas, and main floor or customer area. Be it internal theft or some other issue, you will be able to keep track of all activities.
Second, in case of a problem, you can (and in some jurisdictions, are required to) provide law-enforcement with footage of the incident.
Third, the around-the-clock visual monitoring could also serve as a deterrent, at least for pilfering and other low-level crime.
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Logixx Security Can Help You Get Started With a Professional Security System
It’s already easy to feel overwhelmed as a new dispensary owner with the amount of regulation around Canada’s legalization of marijuana.
If you’re just beginning to think about your dispensary insurance and have no idea where to start, you need the help of an advanced security company.
After all, having a professional security system developed and implemented is the best protection against insurance coverage issues.
Logixx Security leverages over 25 years of experience with integrated security systems in a variety of complex industries, including the marijuana industry. Contact us today to get started with a customized quote.