California cannabis grower gets $1 million insurance settlement for fire damage

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A cannabis grower in Carpinteria, California, has received a $1 million payout from an insurance company after his crop was destroyed by ashes from a wildfire.

According to the Santa Barbara Independent, Florida-based Brown & Brown Insurance secured the payout for the unidentified grower after the Thomas Fire sent tiny ash particles into greenhouses with retractable roofs and damaged thousands of plants.

The insurance, a rarity in the cannabis industry, was put in place months before the fire and included a provision for “change in atmospheric conditions,” the newspaper reported.

Here’s what you need to know:

  • The cannabis that was damaged by the ash tested positive for lead, asbestos, arsenic and magnesium.
  • California was hit hard by wildfires, particularly in the northern region, last year, and the majority of the growers in that area were uninsured.
  • Most insurance companies won’t cover marijuana operations because it’s illegal on a federal basis.
  • Brown & Brown insured about 20 cannabis clients near Carpinteria and Lompoc, according to the Independent, and expects to deliver about $8 million in payments for those businesses.
  • The growers were paying $30,000 in premiums for the insurance with a $25,000 deductible.
  • The large payout prompted Brown & Brown to drop cannabis growers from its coverage, the newspaper reported. Brown & Brown has a global reach, with offices in the United States, Bermuda, Ontario, Canada and the United Kingdom.