Resiliency Severe weather and other risks will challenge the industry’s resiliency in 2025. Climate change and unusual weather patterns are particularly important to the cannabis business, from droughts and wildfires for outdoor growers to supply chain issues due to other catastrophe (CAT) events, like hurricanes, floods and convective storms. With few options for insurance coverage available, business leaders must be open to alternative solutions and embrace enterprise risk management to cope with climate change. Last year’s hurricane in Los Angeles was their first tropical 7 Nearly a dozen billion- storm in more than half a century. dollar disasters were recorded during the first six months Risk mitigation plans will be key in the coming year. 8 Companies need to consider the cost and potential of 2024. Even though severe weather is a real risk for the cannabis industry, many cannabis companies are benefits of different options to mitigate risk. For instance, apparently not acknowledging the risk. a flood wall can be expensive but will protect against water damage and can help drive down property rates. According to the HUB Survey, just 30% of cannabis executives claimed interest in disaster planning, and only It’s also important to consider alternative insurance 23% identified climate change as a major component in solutions with a broker with deep industry expertise. Since determining risk management practices. Coverage can be cannabis coverages can be limited, it might be necessary difÏcult to obtain, but businesses who secure insurance to consider approaches such as parametric insurance, and have business interruption plans in place will be the alternative risk transfer vehicles, or insurers lacking brand ones who survive such a volatile risk environment. name recognition. Cannabis operations can start with weather-related risk management by identifying relevant climate-related risks. 7. AccuWeather, “Hurricane Hilary was a storm to remember for Depending on location, this could include wildfire, flooding, Southern California,” August 22, 2023. tornadoes and even heatwaves or drought (particularly 8. Space, “Billion-dollar disasters have been sweeping across the US this year,” June 13, 2024 for growers). Climate and catastrophe modeling can help businesses determine their greatest risks. 55