Cannabis Insurance In Nevada

What Insurance Does Nevada Require For Cannabis Licenses?

We found no statewide insurance or surety bond mandate for cannabis licensees in NRS Chapters 678B and 678D or the CCB regulations reviewed. The one insurance reference in NRS Chapter 678D concerns transport contracts between licensees.

Nevada's cannabis program is governed by NRS Chapters 678A through 678D and the CCB's regulations, now codified at NAC Chapters 678A through 678D. The rules focus on licensing, ownership, security, inventory tracking, testing and packaging.

Transport contracts. Under NRS 678D.440(4), an adult-use cannabis distributor may contract with an adult-use cannabis establishment for transport, and the contract "may include, without limitation, provisions relating to insurance coverage, climate control and theft by a third party or an employee." The same section makes the distributor responsible for cannabis once it takes control. This is permission to address insurance by contract, not a state coverage mandate.

Local requirements. Cities and counties license cannabis businesses separately, and some write insurance into their codes. The City of Las Vegas 2022 ordinance packet amending LVMC 6.95.090(D) lists these minimums:

• Sales facilities and consumption lounges: general liability of $1 million per occurrence and $2 million aggregate, products and completed operations of $1 million per occurrence and $2 million aggregate, and $1 million excess liability
• Cultivation and production facilities: products and completed operations of $1 million per occurrence and $2 million aggregate, commercial auto of $1 million per occurrence, and $1 million excess liability
• Independent testing laboratories: professional liability of $1 million per occurrence and $1 million excess liability

The ordinance also requires general and excess liability policies to name the City and its officials, employees and volunteers as additional insureds. Other jurisdictions set their own terms.

Requirements change. Verify current rules with the Cannabis Compliance Board and your local licensing office before relying on this page.

What Should Operators Know About The Nevada Market?

Nevada voters legalized medical cannabis in 2000 and adult use through Ballot Question 2 in 2016, with adult-use sales beginning in 2017. The Cannabis Compliance Board has regulated the industry since July 1, 2020.

Regulation moved from the Division of Public and Behavioral Health to the Department of Taxation in 2017. Assembly Bill 533, signed in 2019, created the CCB, which assumed oversight from the Department of Taxation on July 1, 2020.

The CCB describes these establishment categories:

• Cannabis sales facility (retail)
• Cannabis cultivation facility
• Cannabis production facility
• Cannabis distributor
• Cannabis consumption lounge (retail and independent)
• Independent testing laboratory

NRS Chapter 678B separates medical and adult-use versions of several license types, so one operator may hold parallel licenses for the same facility. Consumption lounges add on-site consumption to the risk picture, which is reflected in the separate lounge requirements in the Las Vegas code.

Distributors are a distinct license in Nevada. Under NRS 678D.440, an establishment may not transport cannabis to an adult-use retail store unless it holds a distributor license.

Coverage Checklist By Business Type

Coverage tracks the operation, not just the license. The lists below describe policies commonly carried by Nevada operators of each type; they are educational, not recommendations.

Sales Facilities And Consumption Lounges

• General liability for customer injuries
• Product liability and completed operations
• Excess or umbrella liability
• Commercial property and crime coverage

Cultivation Facilities

• Crop coverage for plants in production
• Commercial property and equipment breakdown
• Products and completed operations liability

Production Facilities

• Product liability and product recall
• Property coverage for extraction and kitchen equipment

Distributors

• Commercial auto and cargo coverage for goods in transit
• General liability

Testing Laboratories

• Professional or errors and omissions liability
• General liability and property for lab equipment

All License Types

• Workers' compensation, directors and officers and cyber liability

How Do Landlords, Local Permits And Lenders Affect Coverage?

With no statewide mandate found, local codes and contracts set most coverage terms in Nevada. Las Vegas is a clear example of a city requiring specific limits and additional insured status.

Operators licensed in more than one jurisdiction typically compare each local code, since limits, required lines and additional insured wording can differ. A policy that satisfies one city may need endorsements for another.

Commercial leases commonly require general liability and property coverage and name the landlord as an additional insured. Lenders often require property coverage on collateral.

Transport agreements deserve a close read. Because NRS 678D.440 lets distributors and establishments allocate insurance and theft risk by contract, the agreement may decide whose cargo or auto policy responds to a loss in transit.

Frequently Asked Questions