The $5 billion industry is under threat as insurers pull out — and the state-created FAIR plan fails to cover growers.
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Hannah Whyte, a cannabis farmer in Northern California's wildfire-prone Emerald Triangle, is one of many growers struggling to find insurance due to both wildfire risks and federal restrictions on cannabis. Her 77-acre farm lost its coverage after a nearby wildfire, and despite the state's legalization of cannabis in 2016, she is excluded from the FAIR plan—a state-created insurer of last resort. This leaves Whyte and other cannabis farmers particularly vulnerable to wildfires, which are becoming increasingly common and devastating across California.
Whyte produces up to 1,600 pounds of cannabis annually and relies on personal efforts, such as water pumps and defensible space around her property, to protect her farm. The situation is dire for cannabis farmers in the Emerald Triangle, home to about half of California's active cannabis cultivation licenses, where many are left without viable insurance options.
The crisis has intensified as major insurers like State Farm pull back from insuring properties in wildfire-prone areas. Moreover, the FAIR plan excludes cannabis growers under its guidelines, which prohibit coverage for any property engaged in illegal activities—since cannabis remains illegal under federal law, despite being legal at the state level.
This leaves growers with two risky options: forgo insurance entirely or hide their cannabis business from insurers, which could result in lawsuits or losing coverage. As wildfires continue to devastate California, the inability to secure insurance threatens to cripple the multibillion-dollar industry.
The property insurance crisis comes as the cannabis industry already faces challenges from competition with corporate growers, declining wholesale prices, and an overwhelming regulatory framework. Wildfire risks unique to cannabis farms, often situated in remote areas, further exacerbate these challenges. Despite efforts by California's insurance commissioner to improve cannabis coverage, insurance providers remain hesitant to offer affordable and comprehensive policies.
Whyte, like many others, is left to fend for herself as this year’s fire season rages on, highlighting the mounting difficulties faced by small cannabis farmers in California who are now exposed to both economic and environmental risks.
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