Cannabis Workers Compensation: Myths vs. Reality

As the cannabis industry continues to grow rapidly, so does the conversation around workers compensation—an essential but often misunderstood aspect of workplace safety and insurance. Whether you’re an employer, employee, or industry observer, separating fact from fiction about cannabis workers compensation is crucial for navigating this unique and evolving landscape.

Here, we’ll break down some of the most common myths and reveal the realities behind workers compensation in the cannabis sector.

Myth 1: Cannabis Workers Aren’t Eligible for Workers Compensation

Reality: Despite the complex legal status of cannabis at the federal level, workers compensation laws apply to cannabis businesses in most states where the industry is legal. Employees injured on the job in licensed cannabis operations generally qualify for workers compensation benefits just like workers in any other industry.

The challenge arises because cannabis remains federally illegal, which complicates insurance underwriting and claim handling. However, state workers compensation programs and specialized insurers have developed ways to cover cannabis workers fairly.

Myth 2: Workers Compensation Insurance is Not Available for Cannabis Businesses

Reality: It’s true that securing workers compensation insurance in the cannabis industry can be more challenging and expensive than in traditional industries, but it is not impossible. Many insurers now offer policies specifically designed for cannabis businesses, recognizing the sector’s unique risks and regulatory environment.

Cannabis companies need to work with brokers and insurers experienced in the industry to find coverage that fits their needs.

Myth 3: All Cannabis Workers Face the Same Risks

Reality: The cannabis industry includes a wide range of roles—cultivators, trimmers, extraction technicians, delivery drivers, and retail staff—each with different workplace hazards. For example, cultivation workers might be exposed to repetitive motion injuries and chemical exposures, while delivery drivers face risks related to transportation and security.

Effective workers compensation programs must consider these varied risks and implement appropriate safety measures.

Myth 4: Workers Compensation Claims in Cannabis Are Always Denied Due to Federal Illegality

Reality: While federal illegality creates some legal gray areas, state workers compensation boards typically process claims based on state laws where cannabis is legalized and regulated. Claims are not automatically denied solely because the work involves cannabis.

That said, claim investigations can be more rigorous, and documentation of the injury and workplace safety compliance becomes even more important.

Myth 5: Workers Compensation Covers All Cannabis Industry Workplace Injuries Automatically

Reality: Like in any industry, workers compensation has limits. It generally covers injuries that occur in the course of employment but excludes injuries caused by intoxication, self-inflicted harm, or injuries that happen off-duty.

Given the unique nature of cannabis products, some claims may require additional scrutiny or specialized coverage options.

Why Understanding the Reality Matters

Dispelling myths around cannabis workers compensation helps employers provide better protections for their workforce and prepares employees to advocate for their rights when injuries occur. It also encourages industry growth by fostering safer work environments and improving access to insurance.

If you’re involved in the cannabis industry, whether as an employer or worker, it’s essential to stay informed about workers compensation policies specific to your state and sector. Consulting with insurance professionals who understand cannabis can make a significant difference.