The protests and demonstrations following the killing of George Floyd by Minneapolis police have been developing all across the country, and at least 50 cannabis dispensaries have been targeted for burglary in the midst of the unrest.
Retailers in California, which is the nation’s largest cannabis market, were the hardest hit. MedMen chose to close all of their retail locations following the burglary of three of their Los Angeles dispensaries. Dozens of other dispensaries were hit in the Los Angeles area, the San Francisco area, Sacramento, Vallejo and El Sobrante. In Oregon, two retailers were hit.
The motivations for most of the burglaries is unclear. Dispensary owners have noted that some break-ins are clearly done by professional burglars who seem to have used the distraction of the unrest to their advantage, while other break-ins seem to be the targets of opportunistic looting.
In the Chicago area, the cannabis industry is much newer, with legal sales only having started on January 1 for adult use cannabis. Several dispensaries have been targeted for theft and vandalism, with one dispensary owner in South Chicago saying that after the business closed and employees had left that about 3 dozen people entered the building and ransacked the store.
A few East Coast dispensaries were also hit, including in New York City, Philadelphia and Palm Beach. In some cases, it looked like it was a team that knew what they were doing that pulled off the job, and at others it looked more like crimes of opportunity.
Theft is a major concern for retailers on a normal day, not only because they risk losing money but also because losing product makes regulators unhappy. How much of that loss is recoverable once an insurance claim is made? It depends on the type of coverage that an individual business has. A dispensary insurance policy needs to cover property protection in order for a claim to be successful. But a claim might not be paid out if proper security measures were not taken, such as failing to securely store all cannabis products overnight.
During this difficult time, business interruption insurance can be a massive help if you have it. If your business has had to close due to vandalism, COVID-19 restrictions, or civil unrest, you may be able to file a successful claim if you carry this type of insurance for your business. If you currently don’t, this may be the time to reconsider because this is likely not to be the last time. Take California, for example, where businesses have been impacted by wildfires and their smoke and planned power shutoffs before they were ever impacted by the coronavirus.
In state-regulated cannabis markets, one thing certainly has changed. If a company has proper insurance coverage, they may be able to successfully file a claim and have the security of that to fall back on. That was not possible in a pre-regulation era. As the federal government considers clarifying banking rules and perhaps insurance rules for the cannabis market, the ease of mind that comes with the right insurance policy that covers your specific needs becomes possible for many more cannabis-related companies.
