On August 20, 2025, a marijuana dispensary under construction in New Buffalo Township, Michigan collapsed. This incident highlights the importance of builders risk insurance for cannabis new construction projects. According to reports, the foundation and walls gave way just before 1:30 p.m. while crews were on site. Two workers sustained minor injuries, but thankfully no one was hospitalized (ABC57 News).
This wasn’t a fire, theft, or storm. It was a straight-up collapse during construction. And it highlights a critical truth:
The cannabis industry is building fast but without the right insurance, a project can fall apart—literally and financially—before doors ever open.
Why Construction Risk in Cannabis Is Different
The cannabis sector is expanding rapidly. Dispensaries, cultivation sites, processing labs—every project comes with specialized infrastructure and high upfront investment. But here’s the problem:
- Thin margins: Many operators face price compression and heavy regulatory costs.
- Specialized builds: Reinforced foundations, vaults, HVAC systems, lighting, and security drive construction costs up.
- Financing hurdles: Cannabis businesses often face limited banking options, leaving little room for error if something goes wrong.
A single construction accident like this collapse can erase months or years of investment.
What Builders Risk Insurance Covers
Builders Risk Insurance is designed to protect your project from the moment ground breaks until the day you cut the ribbon. Here’s what it typically covers:
- Structural Damage – Fire, collapse, storms, or vandalism that impacts the building itself.
- Materials & Equipment – Theft or damage to supplies on site or in transit.
- Temporary Structures – Scaffolding, fencing, or trailers used during the build.
- Financial Security – Ensures you’re not footing the bill for major losses before you ever generate revenue.
What It Doesn’t Cover
No policy is perfect. Builders Risk typically does not cover:
- Faulty design or workmanship (that’s where your contractor’s Errors & Omissions can step in).
- Wear and tear.
- Employee injuries (covered by Workers’ Compensation).
That’s why a layered insurance strategy is so important. Builders Risk + Risk Transfer/Certificates of Insurance + General Liability ensures you’re protected from multiple angles.
Why Cannabis Businesses Can’t Afford to Skip It
A collapse like the one in New Buffalo Township isn’t just a “construction problem.” For a cannabis business, it can mean:
- Missed launch windows (critical in competitive markets).
- Lost investor confidence.
- Permanent financial damage before a single sale.
In short: Skipping Builders Risk is gambling with your entire business model.
The Bottom Line
If you’re building a dispensary, grow, or processing facility, you need to treat Builders Risk insurance as essential—not optional.
- It protects your project while it’s most vulnerable.
- It shields your financial future from disasters that could derail everything.
- And when paired with the right liability coverages, it ensures you can move from blueprint to grand opening without a financial collapse of your own.
Ready to Build with Confidence?
At Spire Insurance Solutions, we specialize in helping cannabis businesses protect their investments from the ground up. Whether you’re breaking ground on a new dispensary or expanding cultivation, we’ll help you design a coverage plan that matches your risks—and your ambition.
👉 Schedule a call today to talk about Builders Risk and cannabis-specific insurance solutions.
We’ve shared some helpful resources including information on buying cannabis insurance:
- Top 5 Builders Risk Insurance Mistakes to Avoid | Construction Tips
- What Is Builders Risk Insurance? | Complete Guide for Builders & Owners
- How to Value Your Builders Risk Insurance Properly | Construction Guide
- Cannabis Business Insurance Cost Breakdown and Factors
- Vetting Cannabis Insurance Agents: The Ultimate Checklist
