Cannabis dispensary insurance in Texas

Business owners who plan to open a dispensary in Texas should familiarize themselves with the many legal requirements around distributing cannabis.

Marijuana is still illegal in the state of Texas for recreational use, according to the Texas State Law Library.

There are limited health allowances for low-THC cannabis for medical diagnoses, including epilepsy, cancer, PTSD, autism, and a select few other qualifying conditions. Medical dispensaries within the state of Texas are referred to as Compassion Use Programs (CUPs).

Texas dispensaries must show proof of general liability insurance with a $1 million per-occurrence limit and a $2 million aggregate limit, and $1 million in product liability coverage.

• General liability insurance will protect your business if a customer falls and gets injured or has their property damaged while in your dispensary. It also covers allegations of slander and libel.
• Product liability insurance is great to have if somebody takes you to court, claiming that your cannabis products caused an adverse effect, such as a panic attack or an allergic reaction.

The following insurance policies are strongly recommended for every cannabis business to prevent heavy financial hits from injuries, accidents, and lawsuits:

• If you have employees, workers' compensation insurance can provide coverage if they are injured while working or need to go on disability due to a work-related illness. Unlike most other states, this coverage isn't required by law in Texas.
• If you plan on keeping any company records, such as the mandatory Compassionate Use Registry, you'll want to have cyber insurance in the event of a data breach or cyberattack.
• You should consider a commercial property insurance policy to protect your rented or owned business property from hefty expenses resulting from fires, thefts, vandalism, and certain weather damage.
• Commercial auto insurance is required in Texas if you own or operate a business vehicle. It helps cover legal costs from auto accidents.

If you're considering opening a Compassionate Use Program cannabis dispensary in Texas, it's important to familiarize yourself with the rules and regulations set forth by the Texas Department of Public Safety. The state has limited application windows for CUP licenses.

The requirements to apply for a Compassionate Use Program in the state of Texas include:

• A $488,520 non-refundable, two-year license fee
• An online Compassionate Use Registry that meticulously records information such as physician information, cannabis product catalogs, patient details, dosages, and prescription specifics
• A plan for safely producing or obtaining low-THC cannabis products
• An owner who can pass a criminal background check

Compassionate Use Programs are only allowed to provide cannabis products to people with an approved medical diagnosis as determined by a licensed physician.

Unlike many states that allow cities and municipalities to create their own rules around THC and cannabis dispensaries, Texas law prohibits jurisdictions from banning the use of low-THC products for medicinal purposes.