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Cannabis dispensary insurance in Washington, D.C.
Marijuana is legal in Washington, D.C., for both recreational and medical use. Washington, D.C., does not currently require additional insurance for dispensary owners, but several policies can help protect cannabis businesses from common risks and liabilities.
What types of insurance do Washington, D.C. dispensaries need?
In Washington, D.C., cannabis is legal for medical use, as well as recreational use in small quantities. However, recreational cannabis sales are illegal. Businesses are regulated by the Alcoholic Beverage and Cannabis Administration (ABCA).
Some states with legalized marijuana require dispensaries to carry a particular type of insurance or surety bond to navigate the risks associated with selling THC products. Washington, D.C., is not one of them.
Washington D.C., however, does require all of its small businesses to carry two policies under certain circumstances:
- Workers' compensation insurance is required for businesses with one or more employees. It protects employees in the event of an injury or accident while on the job. Sole proprietors and businesses with only one employee can also purchase workers' compensation insurance as well, but it's not required by the state.
- Commercial auto insurance is another mandatory policy for Washington, D.C., business owners who have company vehicles. Auto insurance protects the business in the event of an accident or collision while performing work duties in a vehicle owned by the company.
Commercial auto policies do not cover accidents in personal vehicles, even ones being used for work purposes. For that, you'd need a hired and non-owned auto insurance (HNOA) policy.
What other types of business insurance do I need for my cannabis dispensary?
Cannabis businesses in Washington, D.C., would likely benefit from a variety of valuable policies to help cover expensive costs related to injuries, accidents, theft, and more.
General liability insurance will protect your business if a customer is injured or their property is damaged while on the premises. It can also cover legal costs if you are sued for slander, libel, and other advertising injuries.
Consider a commercial property insurance policy for your rented or owned business space to safeguard against common sources of property damage, such as theft and fires. Many real estate companies require this policy to rent their commercial space.
Because of the sometimes unpredictable nature of THC products, you may want to consider product liability insurance. This policy can help if a customer claims that your merchandise caused them harm, like an allergic reaction or anxiety attack.
Cyber insurance will protect your business if your customers' private information or medical records are compromised by a data breach or cyber hack. Washington, D.C., requires small businesses to inform customers of a data breach, which can become costly if not covered.
Because marijuana's legal status is constantly changing, dispensary owners should invest in business interruption insurance to cover their business in the event of an income gap, such as a temporary closure.
Finished stock insurance can protect your business from the costs associated with a loss of inventory, such as cannabis products, from theft, damage, vandalism, and natural disasters.
Find business insurance for your Washington, D.C., cannabis business
What are the laws and requirements for cannabis businesses in Washington, D.C.?
For those wanting to open a cannabis retail establishment and obtain the necessary permits, they must meet several requirements:
- Be 21 or older
- Not have a business conflict of interest with testing laboratories or courier services
- Owe $100 or less in taxes and remain current on tax filings
- Not be a physician who is registered to make cannabis referrals
When applying for a license with ABCA, business owners must pay an $8,000 license fee and submit their application that outlines how the small business owner intends to meet the mandatory requirements.
The cannabis license application should include:
- A statement with an intent to rent or a valid lease at a location that is at least 300 feet from schools and recreation centers
- A floor plan that acknowledges important safety features, such as digital recording and alarms
- A theft prevention plan
- An outline of closing procedures
- A completed Business License and Endorsement Application
Prospective business owners in Washington, D.C., must carefully familiarize themselves with the laws and legal limits associated with cannabis sales. For example, registered patients are only authorized to buy up to eight ounces of cannabis products every 30 days.
Check with the ABCA for the most current requirements for starting your cannabis retail establishment.
How can I get business insurance for my Washington, D.C. dispensary?
Start Insureon's easy online application to get fast, free quotes for your cannabis dispensary. For all other cannabis businesses, contact one of our dedicated licensed insurance agents at (872) 260-5150 to discuss finding the right policies for your needs.
Updated: September 20, 2024
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