You need to learn how hemp producers can protect crops against disaster. Because selecting to grow emerging crops can come at tremendous financial risk for you. Take a look at the climate conditions that have been affecting the US lately.
There are droughts, floods, and hurricanes affecting many states. Therefore, marijuana and hemp producers need to protect their investments as best as possible. That is how they can ensure that they don’t lose their crops entirely.
But it’s pretty tricky to get insurance for a type of crop which until not long was federally illegal. This crop only became legal in 2018. Only then, the producers were able to secure crop insurance. They were able to do this through the US Department of Agriculture. They were also able to pay for some private insurance policies as well.
Lately, more States are starting to legalize recreational and medical marijuana. So, commercial insurance providers are going to expand their coverage. But that coverage extends to a certain extent. Therefore, not all producers decide to get those insurance policies.
Drought Insurance For Hemp
The extreme drought conditions affected many agricultural crop producers. That is why the federal agriculture regulators authorized emergency practices to help them. Earlier this month, the USDA’s Risk Management Agency announced that they could steam line payments. These are to extend to policyholders in the areas that were affected by drought. The agency is working hard with crop insurance companies to achieve these.
To aid the producers with the widespread drought, the agency is extending the deadlines for crop insurance. They are allowing more time for them to pay the administrative and premium fees. Whenever the hemp producers notice damage to their crops, they need to contact their agents. That is if they have a crop insurance policy. That way, they can give the insurance company time to appraise their crap before replant or cutting it. Farmers might also be able to qualify to get federal disaster aid.
Outdoor Versus Indoor Cultivation Coverage
According to Charles Pyfrom, ultimately, every insurance is considered disaster insurance. However, several insurance companies don’t provide crop insurance for any outdoor cultivation fields. Pyfrom works as a CMO for CannGen Insurance Services. This is a Rancho Cordova, California-based company which is a managing general insurance underwriter focused on cannabis. He says, but there are zero controls in place. Nothing shows that they have an issue, and they are trying to control it—no alarms or sprinklers.
The carriers that they represent don’t want to face those risks. Therefore, many of those large-scale farm-style exposures typically go to agricultural markets that are more traditionally farm-based. These days, more are starting to entertain hemp operators than they used to in the past. Several insurance agents sell birth private and federal insurance policies. Therefore, they have the means to assist hemp farmers in creating custom programs.
According to Jeff Kleid, insurance companies base their insurance solutions on collecting feedback directly from cultivators. They collect aggregate data too. Kleid is the owner of a Newport Beach, California-based company called Elite Risk Insurance Solutions. He says that this process is what lets the insurance companies be able to write reasonable policies. He added that most farmers are aware of what their land needs. Therefore, they know which insurance policy to get. They will communicate better with their insurance agency to cover all their needs.
Private policies usually include product liability, living coverage, business interruption coverage, goods in progress, inventory, equipment coverage, and finished stock. Farmers are also able to add coverages for several different kinds of weather disasters and conditions. Insurance companies are keener on covering disaster events such as general fire or wildfire insurance for cultivators of indoor cannabis. For those who are operating in a warehouse or a greenhouse.
Legalization Could Help
Insurance companies are already providing a wide array of services to assist cannabis companies in sustaining their growth plans. But getting recreational marijuana federally legalized could further help them a lot. This would be very useful for the businesses that work with cannabis and companies that provide insurance to them.
“But companies that are making, selling, and marketing lab-created products such as delta-8 THC and delta-10 THC, as well as derivatives of these such as THC-O-acetate, may find it harder to secure insurance.”
The reason behind this is that the Cannabis market is highly unregulated. Therefore, providing insurance for this is an issue to the state regulator. Therefore, it is a very grey area. Insurance providers tend to have a broad approach when writing their policies. Therefore, they wish to avoid writing several versions of the same policy to base them on individual products. Pyfrom says they might decide not to accept the risk if they realize that a significant component is delta-8. That’s because they want to make sure that everything is dull and legitimate.
The Bottom Line
You need to learn how to protect your crops against disasters adequately, mainly if you are a help producer. Because otherwise, you could have a tremendous financial risk. The last thing you want is to be significantly affected due to the climate conditions. Not without having insurance to cover those risks. Because that is how you can better protect your investment.
Walter was not an engineer even from the first day he stepped at the University of California in Los Angeles. He only had to fulfill his Father's wish to pursue civil engineering. He graduated in 2015, and he started practicing as a writer. His passion was thriving in the hemp industry following the controversies and myths about the plant. Walter E. Russo later embarks on a full-time job in a hemp website, and he now delivers informative content on everything you should know about hemp. His in-depth research and elaborate skills have earned him a reputation as a trusted writer. He enjoys watching football during his leisure hours.