A snowstorm wiped out 20,000 plants in Colorado this month, causing millions in losses for a huge outdoor farm in Pueblo.

Los Sueños Farms is the largest cannabis producer in Colorado and was just about to harvest when a surprisingly early October storm brought inches of snow. The destroyed plants won’t be useless, as the company plans to extract what it can and pull any viable flower, but the returns will be far less than if they’d had a full harvest.

Los Sueños Farms grows dozens of acres outdoors and has indoor and mixed-light facilities. In total, their farms and facilities make up a majority of the Colorado cannabis market. Wholesale prices for cannabis are likely to increase as the market adjusts for the limited supply of flower and the higher supply of extraction material.

Finding the right kind of cannabis farming insurance can be difficult, particularly for outdoor farms like Los Sueños Farms. Natural forces are unpredictable and can be devastating to plants exposed to the elements, which is why insurance providers are hesitant to cover it. The insurance industry is all about managing risk, but there are too many unknown and known risks for most carriers to be comfortable.

What’s worse than not being covered at all is paying for insurance that doesn’t actually cover your risks. Working with an insurance provider that understands the cannabis industry and can evaluate your situation is critical, otherwise you may end up paying for premiums with unknown gaps in your coverage. There is a bill moving through Congress that would help fill these gaps called the Clarifying Law Around Insurance of Marijuana (CLAIM) Act, but it is still in the process of being reviewed by Congress.

It’s also important to have a plan in place for when the worst happens. Los Sueños Farms harvested everything they could as the storm approached, and then attempted to keep their plants warm in subfreezing temperatures with blankets and hot water. The cultivation facility had a plan to save as much of the harvest as possible and they will probably make some adjustments to that plan after going through this hard storm. Nothing tests your emergency plan like an emergency.

As winter approaches, it’s important to think about the safety and wellbeing of your facility, plants and products. It is the coldest time of year and a winter storm can do more than just knock out a crop: wind can knock out the power and rain can flood your floors. Making sure your facility has an emergency plan to prepare for situations relevant to your area will keep your team and your business safer.

Crop insurance isn’t the only type of insurance that can help a cannabis business recover after a disaster or a major environmental event. Insurance for growers needs to be tailored to the farm. Business interruption insurance can help a business keep going even when their business isn’t operational. For farmers, however, the key is to make sure you understand all the exclusions so that you know for sure that your outdoor crops are covered against natural disasters.

You can learn more about Los Sueños Farms below.

Image credit: Los Sueños Farms