Inadequate coverage and its costs

The report also explores incidents illustrating the financial consequences of inadequate risk management and insurance.

River Valley Growers in Massachusetts lost its entire 2022 harvest, valued at $7 million, when pesticide drift from a neighbouring farm contaminated their crop. The cultivator went out of business, unable to meet production contracts. 

C&C Manufacturing LLC in Missouri had its license revoked after creating a distillate with unregulated THC levels, triggering a statewide recall of 135,000 products in 2024. 

Elsewhere, NNK Equity LLC in New Mexico faced seizure and destruction of tens of thousands of plants worth hundreds of thousands of dollars after failing multiple compliance requirements, including inadequate security and track-and-trace violations.

These incidents illustrate that operators who treat insurance as an administrative burden rather than good risk management discipline leave themselves exposed not just to claim denials but to the underlying operational failures that trigger claims.

The European opportunity

While North American markets face saturation and regulatory uncertainty, Europe presents a different trajectory. “We would expect that there will be an expansion of insurance capacity for the European cannabis markets over the coming years,” Davey suggests. 

“The US and Canada are already relatively saturated, although the US’s move towards rescheduling may make this even more prominent. The respective European approaches to deregulation—which are quite steady and measured—offer a greater degree of certainty and confidence that enable insurers to plan for, and mobilise over the medium to longer term.”

Europe’s total cannabis sales are forecast to grow from $1.5 billion in 2025 to $3.3 billion by 2030, driven by permanent frameworks in Denmark and France, market expansion in the UK and Germany, and broader adoption. The pharmaceutical focus, emphasising GMP facilities, pharmacy distribution, and prescription-based access, provides the regulatory clarity insurers need.

Germany offers public health insurance reimbursement, a stability factor appealing to underwriters. France’s transition from pilot program to generalised medical access in April 2026 represents the measured regulatory evolution. Spain, Slovenia, Ukraine, and Bosnia and Herzegovina are developing frameworks prioritising pharmaceutical standards over rapid commercialisation, a pace that may frustrate operators but reassures insurers.

“The next phase of cannabis growth will belong to operators that act first to manage risk. Those who build insured, transparent operations now will define standards, secure capital, and outpace slower competitors,” the report notes. 

The capital markets dimension amplifies this dynamic. Investors and lenders increasingly require comprehensive insurance as a financing condition. A cannabis operator seeking growth capital must demonstrate not just that it has insurance, but that its risk posture is strong enough to maintain coverage through scaling and market expansion.

“The Risk Briefing provides great insights into the different risk mitigation best practices that operators can implement in order to shift the needle in the underwriting process,” Davey continued. 

The operators featured in the report demonstrate these principles. PHCANN International’s Macedonian facility employs 5-meter walls, licensed armed guards, over 200 cameras, and annual attack-response drills, with special forces response available within one minute. Linnea holds an EcoVadis silver medal, placing it among the top 15% of assessed companies worldwide on ESG criteria, monitoring emissions and recycling extraction waste into renewable energy.

SOMAÍ Pharmaceuticals emphasises supplier financial viability: “Companies in financial trouble often cut corners, even unintentionally. We’re always transparent about our own financials with partners,” says CEO Michael Sassano.

As insurance capacity expands in select markets, underwriters now have enough data to differentiate between well-managed and poorly-managed operators. Premium spreads will widen. Coverage restrictions will become more tailored. Operators with robust risk management will access broader coverage at lower cost, while those with weak governance will find themselves increasingly uninsurable.

The word ‘cannabis’ once all but guaranteed rejection. Today, proving professionalism has become the requirement for protection.

The Risk Briefing: Cannabis 2026 is available from Relm Insurance and Prohibition Partners.