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.
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.