Common Liability Risks Cannabis Wholesalers and Distributors Face

Liability Risks Cannabis

Opening a cannabis wholesale or distribution business is one of the best ways to help people gain access to high-quality cannabis. However, there are many different things that go into running a wholesale business successfully. Not only do you have to source the best products possible, but you also have to protect your company from different types of liability.

The Types of Liability Cannabis Distributors Face

As a distributor or wholesaler, you face different types of liability risks than producers and dispensaries. Since you’re providing the dispensaries with the products, they can hold you accountable for the following issues:

  • Inaccurate product labels
  • Unlabeled health hazards
  • Product defects

If your business made mistakes that resulted in the above problems, you’re responsible for curing the damages.

You can also be liable for damages from clients using the products. These can include the following incidents:

  • Property damage resulting from product use
  • DUI
  • Lost wages
  • Medical costs resulting from injuries due to product use

Though most users won’t blame your business for their injuries, some will. If they do, you’re responsible for the cost of their injuries.

Insurance Can Help

Cannabis distributors insurance coverage is a simple way to protect your wholesale business from these types of liability claims. If your company gets sued by dispensaries or their clients, the coverage will help cover the cost of the damages.

Without insurance in place, you’ll have to pay for the cost of any lawsuits and settlements out of pocket. Invest in coverage now and you’ll be able to protect your company easily.