Cannabis dispensary insurance in Massachusetts

In Massachusetts, cannabis businesses are regulated by the Massachusetts Cannabis Control Commission. The Cannabis Control Commission requires cannabis dispensaries to carry:

• General liability insurance: $1 million per occurrence, $2 million aggregate, $5,000 maximum deductible
• Product liability insurance: $1 million per occurrence, $2 million aggregate, $5,000 maximum deductible
• Surety bond: Equal to the business's license fee

General liability insurance covers the most common risks of owning a small business, such as lawsuits from customers who suffer an injury or property damage at your shop.

Product liability insurance covers legal costs if a customer sues over harm caused by a product sold at your dispensary, such as an adverse reaction to an edible. It’s often included in general liability insurance.

Surety bonds provide reimbursement if your business fails to adhere to the terms of a contract.

However, these are not the only coverages you need. To comply with Massachusetts law, businesses need to carry workers’ compensation insurance if you have employees. And, if you have any business-owned vehicles, state law requires that you carry commercial auto insurance.

Keep in mind that although Massachusetts has approved cannabis for medical and recreational use, the majority of cities and counties in the state do not allow cannabis businesses of any type.

In short, you’ll need to research your state, county, and city laws to make sure your dispensary or other cannabis business is obeying the rules.

While general liability insurance, product liability insurance, and surety bonds are vital to running a dispensary in Massachusetts, they are not the only coverage you need. Dispensary owners should also consider the following policies:

• Commercial property insurance helps pay for lost, damaged, or destroyed business property. For example, it can cover the cost of replacing stolen inventory or renovating a marijuana dispensary’s building after a fire.
• Property policies sometimes include business interruption insurance, which covers costs when a fire or other covered property claim forces your business to close temporarily.
• Additionally, you may need inland marine insurance to protect property in transit or stored off-site, as property insurance only covers items at your business location.

While these are a top priority for cannabis sellers, they aren’t the only policies you need to run a business. You can always chat with our dedicated insurance agent if you’re unsure which policies you need.