Hurricane Ian is expected to be one of the costliest storms on record to hit the state of Florida, and possibly the United States, with an estimated insurance cost of $67 Billion. A cost omitted from this estimate is the cost of damage to the medical cannabis industry in the state.
When it comes to cannabis in the state of Florida it is a mixed bag of legalization. In Florida is legal to have cannabis as a medical prescription, but it is currently a felony for possession of the drug without a prescription, though there are laws hoping to pass through the legislature.(1)
Hurricane Ian crossed the state in an area where most of the state’s licensed growers were located and these farms were adversely affected. Many areas of Florida experienced unprecedented rainfall amounts, with some areas experiencing 15 inches of rain or more, combined with high winds with an estimated 150 MPH. This caused flooding, loss of farms and crops due to wind and water damage that didn’t completely drain until November in some spots. Unfortunately, cannabis companies do not qualify for federal disaster aid because of its status as a controlled substance. So, despite the massive losses, unlike other businesses, they were out of luck when it came to government assistance.
In many states, flooding is a massive concern, with many farms being ruined from the rivers overflowing their banks, along with the fear of mudslides. In the case of Hurricane Ian, many areas of Central and Southwestern Florida experienced unprecedented rainfall amounts, with many areas receiving over fifteen inches of rain,(2) with wind speeds at land fall reaching 150 MPH. loss of farms due to wind and water damage. In addition, farms and distribution centers were shut down for multiple weeks and were closed again with another hurricane six weeks later. Increasingly these storms cause immense destruction to crops and other businesses, which without federal aid, could cause them to close shop if these disasters close them for a substantial amount of time.
In Florida, cannabis cultivators and dispensaries, known as medical marijuana treatment centers (MMTC), have a unique option to recoup product losses after a natural disaster or other significant operational disruption. If a cannabis company can prove a “harvest failure,” it can establish a product supply agreement with another operator – essentially allowing the impacted business to purchase marijuana on a wholesale basis. The state as a “catastrophic loss of growing plants that presents a substantial risk of severe impact of a MMTC’s ability to supply patients with low-THC or medical cannabis products.”
Florida operates under a vertical-integration model, essentially requiring companies to handle all aspects of the business, from cultivation to retail sale – a definition that effectively nullifies wholesale agreements. A harvest failure triggers an exception to the rule. (3)
Outdoor Crops face perils
Most cannabis growers grow their products like any farmer would. This exposes them to the worst risks that mother nature has to offer. These risks include
- Fires: With a typical growing season of May to October, Cannabis growers run the risk of wildfires destroying their crops before they harvest.
- Floods: In many states, flooding is a concern especially if your farm is on known floodplains. This is especially true in Florida.
- Changes in weather patterns: Such changes include droughts, excess rain, temperature changes, frost other common weather-related problems such as hail or mudslides can cause a significant variation in the amount of cannabis produced and create an unexpected loss to a cannabis business
- Windstorms: Tornadoes or crossline winds can happen everywhere. But even without these storms, a severe windstorm can cause significant crop loss
- Frosts: Sudden freezes can kill growing for the season.
Hurricanes are among the biggest disasters people face and for cannabis growers in states in Florida, an all too familiar event. When storms like Ian strike, it will cause devastating damage to everything in its path. Cannabis farms and distribution centers need to take great care in protecting their products.