Workers’ Comp Insurance for Cannabis Businesses in Colorado

All businesses in Colorado with one or more employees, including those in the cannabis industry, are required to carry workers’ compensation insurance. This mandate applies to nearly all employers, whether their workforce is full-time, part-time, or even family members involved in the business. The state’s strict compliance laws leave little room for exceptions, ensuring that businesses take responsibility for the safety and financial security of their employees.

For cannabis businesses, the need for workers’ comp insurance is particularly complex due to the many job-specific classifications, known as workers’ comp class codes. These codes vary depending on the role of each employee, from dispensary staff to cultivation workers. This complexity makes obtaining proper coverage challenging, as misclassification can lead to penalties or inadequate coverage.

At NPN Brokers, we work closely with cannabis businesses in Colorado to help them navigate these complexities. Whether you are launching a new operation or need assistance meeting regulatory requirements, we can connect you with the appropriate workers’ comp policy. If you’re a cannabis business in Colorado with questions about your insurance needs, call us at (561) 990-3022 for expert guidance.

Workers’ Comp Requirements for Cannabis Businesses in Colorado

In Colorado, workers’ compensation insurance is a legal requirement for any business with at least one employee. This includes all types of businesses, from small startups to large enterprises, and extends to full-time, part-time, and family-member employees. Compliance with these laws is critical to avoid fines and penalties, as well as potential liability in the event of workplace injuries.

Cannabis businesses are no exception. Employers in this industry must ensure that every worker, regardless of their role, is covered under a valid workers’ comp policy. Failure to comply can result in daily fines that quickly accumulate, jeopardizing the financial health of the business. Additionally, businesses without insurance are liable for covering injured employees’ medical costs and lost wages out of pocket, leading to even greater risks.

To remain compliant, cannabis businesses should stay informed about Colorado’s specific workers’ compensation requirements. Resources like the Colorado Department of Labor and Employment provide up-to-date regulations and guidance. For cannabis businesses seeking clarity or a workers’ comp policy tailored to their needs, NPN Brokers can assist in simplifying the process and ensuring proper coverage.

Different Types of Cannabis Industry Businesses and Their Class Codes

Cannabis businesses in Colorado fall under diverse classifications, each with unique workers’ comp class codes depending on the specific job roles and operational functions. Properly identifying and applying these codes is essential for compliance and accurate coverage.

Dispensaries

Dispensaries primarily serve as retail outlets for cannabis products.

• Class Code 8017: Covers general retail stores, applicable to dispensaries selling products directly to consumers.
• Class Code 8045: Pertains to retail drugstores and pharmacies. Some dispensaries, especially those involved in limited prescription sales, may fall under this category.

Cultivation

Cultivation operations, whether indoor or outdoor, are categorized under agricultural or greenhouse-related codes:

• Class Code 0005: Covers outdoor growth operations for nursery stock like trees and plants, including outdoor cannabis cultivation.
• Class Code 0035: Used for controlled environments such as greenhouses, applicable to indoor cannabis grow operations.

Manufacturing

Cannabis manufacturing includes the production of edibles, beverages, and other infused products.

• Class Code 2003: Applies to companies producing baked goods, such as cannabis-infused edibles.
• Class Code 2163: Covers bottling operations for cannabis beverages.
• Class Code 4825: Relevant for manufacturing pharmaceuticals, such as cannabis-derived medicines.
• Class Code 6504: Includes general food product manufacturing, covering diverse edible production.

Cannabis Delivery Services

• Class Code 7198(1): Covers delivery and messenger services. Cannabis delivery operations often fall into this classification.

Proper classification ensures businesses pay appropriate premiums and avoid penalties for misclassification. NPN Brokers specializes in helping cannabis businesses identify and apply the correct codes, ensuring seamless compliance and comprehensive coverage.

Risks of Not Having Proper Workers’ Comp Insurance Coverage

Operating without adequate workers’ comp insurance or misclassifying employees poses significant risks for cannabis businesses in Colorado. These risks include:

• Fines: Businesses can incur fines of up to $500 per day, which can quickly become a substantial financial burden.
• Shutdowns: Non-compliance may result in cease-and-desist orders, forcing operations to halt until insurance is secured.
• Increased Benefits: If an employee is injured, their benefits could increase by 50%, creating additional financial strain.
• Liability: Employers without proper coverage are responsible for medical bills, lost wages, and an additional 25% penalty to injured employees.
• Legal Action: Injured employees can sue the business, further compounding financial and reputational damage.

Avoiding these risks is crucial for cannabis businesses to maintain operations and financial stability. By working with NPN Brokers, businesses can secure the necessary coverage and avoid these costly pitfalls.

Get a Workers’ Comp Insurance Quote Today

If you’re looking for a workers’ comp insurance policy tailored to your cannabis business, NPN Brokers can help. Call us at (561) 990-3022 or fill out our quote request form to get started. With NPN Brokers, obtaining coverage is fast and hassle-free.

At NPN Brokers, we work exclusively with insurance carriers that do not require contracts, deposits, or audits. Our Pay-As-You-Go policies let businesses keep money in their pockets while avoiding lengthy audits. We understand the importance of keeping costs low and ensuring that small and medium-sized businesses have access to affordable, reliable coverage.

Our streamlined process allows us to provide quotes in minutes and bind coverage within 24–48 hours. Whether you’re a high-risk business, have prior claims, or are newly established, NPN Brokers has the relationships and expertise to find the right coverage for you. Save time and focus on growing your business—let NPN Brokers handle your workers’ comp needs.