Federal bill would allow cannabis businesses to gain access to insurance

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Cannabis reform is being attempted on Capitol Hill, but only one piece at a time

As in many of the industries that are currently active, insurance is an important part of making any business less stressful for new and existing owners. However, the cannabis industry has had a difficult time accessing insurance solutions, similar to the difficulty it has with banking. A bill was introduced once again in the Senate yesterday that looks to change that. The Clarifying Law Around Insurance of Marijuana (CLAIM) Act would open the doors for cannabis businesses to have easier access to insurance.

The goal of the legislation is to provide state-legal marijuana businesses with greater access to insurance coverage. This would also include extra protection from being punished by existing federal regulations, which would be a huge relief. The good news doesn’t end there, as this legislation is being introduced on the same day that a bill also proposes the implementation of banking services to the growing industry.

The CLAIM Act is sponsored by Senator Bob Menendez. As currently drafted, all businesses involved in the marijuana industry would be restricted in their ability to obtain property, casualty, and title insurance coverage. With this bill, all insurers who choose to provide services to the industry would be exempt from any penalties and, at the same time, would prohibit insurers from rescinding or limiting policies for marijuana companies simply because of the nature of their business, as this should be clearly specified at the outset of the agreement.

Further, it would prohibit “recommending, incentivizing, or encouraging an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance offered to a cannabis or cannabis-related business,” a summary of the legislation states. This news comes as a welcome relief to all those companies hesitant to continue in a growing industry, not knowing how to achieve success without someone to safeguard their back first.