Inside jobs account for around 90% of insurance claims relating to theft in the U.S. cannabis industry, according to a leading broker.

Thieves often hit facilities once the harvest is complete, the marijuana is dried and products are about to be transferred to the wholesaler. They know exactly when the security guards take a break and they know where to find the marijuana, allowing them to get in and out quickly.

Chris Boden, cannabis practice group team leader at Crouse and Associates Insurance Services, said inside jobs plague the nascent cannabis industry. He said theft is the biggest concern for businesses in the sector, due to the nature of the product and its popularity on the black market.

Boden said he recently saw a claim whereby a group of 8 to 10 thieves busted through the fence just as the security guards went on a break, went straight to the storage containers, cut the locks and left with $1 million worth of cannabis in just 10 minutes.

“It’s hard to confirm, but that very much seems to be an inside job because they knew the guards’ schedules and they knew exactly where the product was,” he said.

Insurance companies warn that low-paid staff working with millions of dollars’ worth of product will always be tempted to steal. They may also tell their friends about their line of work and face pressure to pass on details about the company’s working patterns.

Insurance brokers advise businesses working in the legal cannabis sector to conduct pre-employment screening. Many underwriters now demand this. They say it is crucial to weed out any potential employees with a criminal record or a history of theft.

Producers are also urged to beef up security around their valuable stock. Motion protection cameras and safe warranties are a must.

Boden said that hemp producers are not immune to theft either, despite the relatively low prices it commands. Many thieves mistake it for marijuana, forcing outdoor hemp farmers to request insurance advice and bolster security protocol.

Naturally, Boden and his fellow brokers urge cannabis businesses to take out the correct insurance protection, with adequate limits, while also improving general security measures and vetting staff.

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