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The Cannabis Industry’s Growing Threat: Hackers and Cyber Fraud Is Your Cannabis Company Prepared?

With the increasing threats of cyber crimes, many cannabis businesses are finding themselves in uncharted territory. The impact of a cyberattack or data breach can have a costly and detrimental impact on your operations. At S2S Specialists, we are here to guide you through the intricacies of properly insuring your business. Below, we discuss why Cyber Defense & Data Breach Insurance is critical and how it will protect you:

Seed-to-Sale Tracking Makes Cannabis Companies Easy Prey

Any business that collects personal data could face substantial liability in the event of a breach; however, the cannabis industry faces even more risk because of the amount of propriety information dispensaries and other cannabis businesses are required to collect. Online cannabis retailers are particularly vulnerable given their access to vast amounts of personal credit card information.

Furthermore, technology is heavily integrated into most cannabis businesses. For instance, many growers are required to keep accurate records of their inventory by state law and testing labs accumulate large amounts of sensitive product data through seed-to-sale platforms.

Given these risks, coupled with the fact that this is a rapidly growing industry operating in an uncertain regulatory environment, the unfortunate reality is that cannabis businesses are considered prime targets for cybercrime. One thing is for certain: data is becoming increasingly valuable.

How Cyber Defense & Data Breach Insurance Can Protect You

Cyber Defense & Data Breach Insurance protects business owners from legal liability resulting from any type of breach, whether the information is leaked electronically or by some other means.

Cyber crimes can harm your business in numerous ways. For example, a cyberattack can interrupt the business’ normal operations, which would be considered a “first-party” loss. In the case of a data breach resulting in the disclosure of a third party’s private information, the third party could sue your business. The SEC could also find your company negligent in cyber fraud cases and impose significant fines. Without Cyber Defense & Data Breach Insurance, your business could be solely responsible for expensive legal bills, significant revenue losses and hefty fines and penalties from regulators.

Many business owners are not aware that Cyber Defense & Data Breach Insurance isn’t automatically bundled into a Cannabis Insurance Policy, and thus, when they experience a loss due to a hack or data breach, they are not covered. It is important to reach out to your Insurance Specialist to discuss your needs and options.


As cyberattacks become more sophisticated, Cyber Defense & Data Breach Insurance is a must-have coverage to protect your business from crippling losses. With the rapid pace of our evolving industry, many cannabis-related businesses are – understandably – not focused on having adequate insurance. Or, if they are, they generally focus on the more “obvious” coverages, such as property or product liability insurance. However, cyber fraud is a very real and costly risk that needs to be addressed. Even the smallest of cannabis businesses are vulnerable to cyber crimes and data breaches because they are part of a larger interconnected network of seed-to-sale vendors.

Do not wait until a cyberattack occurs before asking, “Am I covered?” S2S Insurance Specialists can help you understand the cyber security risks of your cannabis or hemp company, review your policies and provide important coverages tailored to your specific needs. Click here schedule a free 15-minute consultation or call us at (954) 790-6604.


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