Running a cannabis company already means juggling federal-state legal contradictions, banking headaches, and rapid-fire market shifts. The last thing you need is an ownership crisis if a partner dies or becomes permanently disabled. A well-written buy-sell agreement—backed by the immediate liquidity of life insurance—keeps that nightmare from unfolding.
Picture it as the company’s succession playbook. It spells out who can purchase a departing owner’s equity, how that price is set, and the timeline for closing the deal. Without those guardrails, heirs could inherit shares they don’t want, surviving partners might lose operational control, and everyone could end up in expensive litigation just when the business needs stability most.
Contracts are cheap to draft; funding a buyout is not. Most owners don’t keep millions in liquid cash lying around, and emergency loans can be hard to secure—especially for plant-touching businesses. A life insurance policy solves the liquidity issue by delivering the exact money needed, precisely when it’s needed, and usually on a tax-advantaged basis. The company (or co-owners) pays modest premiums today in exchange for a guaranteed lump sum tomorrow, ensuring the agreement can be honored without gutting cash flow or credit lines.
For years, traditional insurers refused premiums derived from cannabis revenue, making “funded” buy-sell agreements a pipe dream. Evergreen changed that equation. Through our cannabis-friendly platform, we work with multiple forward-thinking carriers that actively underwrite life insurance for owners and key personnel in the space. That means competitive pricing, transparent underwriting, and real policies—not off-shore workarounds or pricey surplus-lines gimmicks.
A life-insurance-funded buy-sell agreement delivers business continuity, a fair cash payout to heirs, protection against emergency loans, generally income-tax-free proceeds, and, perhaps most valuable, peace of mind. Owners know the plan is written, funded, and ready; families know they’ll receive fair value; employees know operations can continue uninterrupted.
Imagine three equal partners in a vertically integrated cannabis brand valued at $9 million. Each purchases a $3 million life policy with the company as beneficiary. When one partner unexpectedly passes away, the death benefit arrives within weeks. The surviving partners use that cash—pre-priced in the agreement—to buy the deceased partner’s shares from the estate. The family receives liquid value, and the business’s day-to-day control stays intact.
Work with a qualified attorney to draft or update your buy-sell agreement, establish a current valuation (and schedule regular reviews), then connect with Evergreen’s specialists to secure cannabis-friendly life insurance that can honor that agreement when the time comes. We’ll shop several carriers, oversee underwriting, and help structure ownership and beneficiary designations so the plan works in real life, not just on paper.
Bottom line: a buy-sell agreement funded by life insurance is the simplest, most effective way to protect your cannabis enterprise from the chaos of an unplanned ownership transition. With Evergreen’s industry-first platform, obtaining that coverage is finally straightforward—and fully compliant. Contact us today to safeguard the business you’ve worked so hard to build.
Disclaimer: This article is for educational purposes only and does not constitute legal or tax advice. Always consult your professional advisors.
