Cyber insurance is no panacea, but it can address cannabis businesses’ cyber risks, including the one described above. Cyber insurance policies may require, as a condition of coverage, the insured business notify law enforcement of a cyber attack, such as a ransomware attack. Just like those in any other industry, cannabis cyber attack risks pose a clear and present danger of financial consequences. Cannabis producers and retailers should carefully consider their other, possibly bigger, cyber risks and seek to address them when buying cyber insurance. As valuable as these basic coverages are, cannabis businesses have unique risks that make them more vulnerable to cyber attacks and their financial consequences.
Cyber attacks are now commonplace. Ransomware attacks, in particular, have skyrocketed in frequency and size. High-profile data breaches have cost businesses in the United States millions of dollars in losses and incalculable reputational harm. Just like those in any other industry, cannabis cyber attack risks pose a clear and present danger of financial consequences.
With new data-security legislation, cyber attacks create even more risk. Under the California Consumer Privacy Act (CCPA), for example, attacks can lead to regulatory fines and private actions by affected consumers. Under the...
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