Workers’ Comp Class Codes for the Cannabis Industry

The cannabis industry has grown rapidly in recent years, creating an expanding need for comprehensive risk management solutions. One crucial aspect of this involves ensuring that cannabis businesses have the right workers’ compensation insurance in place to comply with state regulations and safeguard their operations. Unlike many other industries, the cannabis sector requires tailored coverage because of the diverse range of job functions it encompasses. The correct classification of employees through specific workers’ comp class codes is essential to maintain compliance and mitigate potential financial risks. NPN Brokers understands these nuances and offers guidance to businesses in this sector, ensuring that they meet state requirements and stay protected. If you need assistance understanding or securing the right workers’ comp insurance, call us at (561) 990-3022.

Due to the regulated nature of the cannabis industry, using accurate class codes is a fundamental part of staying compliant. Different jobs, whether cultivation, research, or retail sales, fall under distinct classifications, each with its own set of regulations and associated risks. Misclassification can lead to severe consequences, such as fines or claim denials, that can disrupt operations and create significant financial burdens. NPN Brokers specializes in helping cannabis businesses navigate these challenges by providing expert insights and facilitating coverage that aligns with state-specific requirements.

Understanding which class codes apply to your workforce is not just a matter of ticking boxes but a necessity for smooth business operations. Cannabis companies often face higher scrutiny and regular inspections due to the nature of the products they handle. By working with a knowledgeable broker like NPN Brokers, you can ensure that your business is properly protected and in line with regulations, allowing you to focus on growth without worrying about compliance issues.

Different Workers’ Compensation Insurance Class Codes for the Cannabis Industry

Understanding the various workers’ compensation class codes applicable to the cannabis industry is crucial for maintaining proper coverage. Below are some key class codes that might be relevant:

• Workers’ Comp Class Code 0005 – This code is for employers that grow nursery stock, such as trees, shrubs, plants, bulbs, and sod. Cannabis cultivators who engage in outdoor growth operations may fall under this classification.
• Workers’ Comp Class Code 0035 – This code applies to employers who grow plants, flowers, or vegetables in controlled environments like greenhouses. Indoor cannabis grow operations are often classified under this code.
• Workers’ Comp Class Code 2003 – Employers involved in the manufacturing or sale of baked goods use this code. Cannabis companies that produce edibles could be categorized here.
• Workers’ Comp Class Code 2163 – The manufacture of cannabis-infused beverages is classified under this code, which pertains to bottling operations for non-alcoholic beverages.
• Workers’ Comp Class Code 4511 – This code covers employers specializing in research or analytical tasks, such as in-house laboratory testing and product development within cannabis businesses.
• Workers’ Comp Class Code 4611 – This classification is for employers preparing drugs, medicines, and pharmaceuticals by blending or compounding ingredients. Cannabis companies making extracts or oils might be classified under this code.
• Workers’ Comp Class Code 4825 – Employers involved in manufacturing drugs, medicines, and related products use this code, covering activities such as blending, compounding, and packing.
• Workers’ Comp Class Code 6504 – This code applies to a range of food product manufacturing not otherwise classified. Cannabis businesses making various edibles could use this classification.
• Workers’ Comp Class Code 7198(1) – This code is for messenger services and parcel and mail delivery, excluding services under contract with the U.S. Postal Service. Cannabis delivery services might fall under this classification.
• Workers’ Comp Class Code 7721 – This code is used for security guard or patrol services, encompassing activities like controlling access and maintaining safety. Cannabis dispensaries employing in-house security often use this classification.
• Workers’ Comp Class Code 8017 – A broad code for retail store insurance, applicable to cannabis dispensaries that primarily sell to consumers.
• Workers’ Comp Class Code 8045 – This code pertains to retail drugstores and pharmacies. Cannabis dispensaries meeting certain sales criteria may use this classification, especially if prescription sales and limited compounding are involved.
• Workers’ Comp Class Code 8832 – This code applies to medical providers in typical office environments and could be used for cannabis clinics offering consultations.
• Workers’ Comp Class Code 9424(1) – This classification is for operating landfills, transfer stations, and material recovery facilities. Cannabis businesses handling waste disposal, including green waste like trimmings, may use this code.

Importance of the Correct Class Codes for Cannabis Industry Businesses

For businesses in any industry, but especially those in the highly regulated cannabis sector, having the correct workers’ compensation insurance class codes is vital. Incorrect classification can lead to substantial issues, such as non-compliance penalties and coverage denials during a claim. This can be particularly problematic for cannabis businesses, as they often face more intense scrutiny than traditional industries. Misclassifications may occur if a business attempts to cut corners or is simply unaware of the specific codes that apply to their operations. This can result in inadequate coverage and significant financial repercussions.

For example, if a cannabis company engaged in the manufacturing of edibles mistakenly classifies their workers under a general retail code, any injury claims could be denied due to incorrect risk assessment. This could leave the company liable for the medical costs and compensation payments, which can be financially devastating. Ensuring proper classification protects businesses from these potential pitfalls and supports smoother claims processing.

NPN Brokers can assist in navigating these complexities to ensure compliance with state-specific workers’ comp requirements. By accurately classifying your employees, you protect your business from potential disputes and financial losses. NPN Brokers’ expertise ensures that your policy aligns with your operational needs, providing peace of mind in a sector where oversight is strict and penalties for errors can be severe.

Get a Workers’ Comp Quote for Your Cannabis Business

To get your cannabis business covered, simply call NPN Brokers at (561) 990-3022 or complete our request a quote form. We can often provide a quote within minutes and secure coverage in as little as 24 hours. Working with NPN Brokers means partnering with a team that understands your needs and provides efficient, comprehensive solutions.

NPN Brokers offers numerous benefits, including quick, flexible coverage options. We eliminate long contracts, deposits, and audits that many other insurers require. Instead, we offer Pay-As-You-Go plans, ensuring you pay only for the coverage you need. Even if your business is considered high-risk or has prior claims, our established relationships with insurance carriers can help you get insured. Save time and focus on growing your business while we find the right policy to keep you protected.