Protecting People, Preserving Profits: A Guide to Workers’ Compensation in Cannabis
The cannabis industry is growing fast—new cultivation sites, labs, dispensaries, and delivery services are opening every month. But with growth comes risk, and one of the biggest challenges operators face is workers’ compensation.
For cannabis businesses, workers’ comp isn’t just a legal requirement. It’s a lifeline. Workplace injuries are costly, and in an industry already under heavy compliance pressure, one claim can throw your business off track.
Why Workers’ Comp Hits Cannabis Hard
Unlike traditional industries, cannabis operations face unique risks:
Cultivation: chemical exposure, trimming strain injuries, machinery accidents
Extraction & Manufacturing: fire hazards, solvents, heavy equipment
Retail & Delivery: robbery risk, slip-and-falls, vehicle accidents
The result? Higher claim frequency and higher premiums.
What the Law Requires
Nearly every state where cannabis is legal also mandates workers’ comp coverage. For example:
California, Colorado, Oregon, and Nevada all require employers to provide workers’ comp—even for part-time and seasonal staff.
Failing to comply can mean fines, stop-work orders, loss of license, or lawsuits.
Bottom line: there’s no avoiding it—so the smart play is controlling it.
How Cannabis Operators Can Control Costs
The key isn’t cutting coverage—it’s cutting risk. Here are four ways:
Build a safety-first culture
Train employees on protective gear, safe handling, and emergency protocols. Fewer accidents = fewer claims.
Get payroll and job codes right
Don’t misclassify employees. A dispensary cashier shouldn’t be rated like a cultivation worker. Correct classification keeps premiums fair.
Stay proactive with claims
Report and resolve claims quickly to protect your Experience Modification Rate (EMR)—which directly impacts future premiums.
Work with cannabis-savvy partners
Not all insurers understand this industry. A cannabis-focused advisor can help you stay compliant while finding cost-efficient options like captives, SIGs, or PEOs.
Looking Ahead
As legalization expands, regulators are tightening safety requirements, and federal rescheduling could shake up the insurance market. Cannabis operators who get ahead of compliance and risk management today will be positioned to grow profitably tomorrow.
Workers’ comp doesn’t have to be overwhelming. With the right strategy, you can keep your team safe and your costs under control. Want to explore your options? Let’s talk.
