Among the many challenges faced by those looking to get into the legal cannabis industry, getting insurance is one of the most important. Anyone who owns a car, home, business, etc. knows just how important insurance coverage is. Since many businesses in or near the cannabis industry can’t get coverage, they are vulnerable to all sorts of calamities that “mainstream” businesses are not.
In California, medical marijuana dispensaries have been operating for many years, but companies in the recreational cannabis industry in the state only began operating on or after January 1st of this year. This has brought the issue of insurance to the forefront as companies flood into the market.
California’s Insurance Commissioner has been working on this issue since last year, and Commissioner Dave Jones recently “announced…he has approved the first insurance coverage for commercial landlords that addresses risks specific to renting to cannabis businesses. California Mutual Insurance Company is the first insurer in the state approved to add Lessor’s Risk coverage for property owners who are exposed to specific risks resulting from cannabis related business activities of their commercial tenants,” according to a new press release from the CA Department of Insurance.
“As Insurance Commissioner, my goal is to make sure all Californians have insurance protection—including the legalized cannabis businesses in California,” Commissioner Jones said. “I want to make sure that when consumers shop in cannabis businesses, when investors and owners invest in cannabis businesses, when vendors sell to cannabis businesses, and when landlords rent to cannabis businesses, there is insurance coverage available to cover everyone from losses. I encourage more insurance companies to follow California Mutual Insurance Company’s lead and file insurance programs to fill the gaps in coverage for the cannabis industry.”
The legal marijuana industry will never flourish and approach its full potential without access to things like insurance and banking. A state like California is in a perfect position to lead the way in these matters, which will then further legitimize the cannabis industry in the eyes of others across the country.
“Last week,” the release states, “Commissioner Jones renewed his call for insurers to offer insurance products for California’s legalized cannabis industry in the wake of published reports that President Trump has abandoned Attorney General Jeff Sessions’ policy on federal law enforcement of cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California’s cannabis businesses. Jones has convened meetings between commercial insurance executives and cannabis business owners to educate the insurance industry about the sophistication, professionalism and risk management of the cannabis industry. Jones has also organized tours for insurance executives at cannabis businesses.”
At least it looks like CA will continue to make progress as long as Commissioner Jones stays aggressive in his attempts to change the culture that surrounds cannabis and insurance.