Starting a business in any industry presents entrepreneurs with unique challenges almost every day. We’ve discussed how difficult it can be for marijuana entrepreneurs to get a business loan and sometimes even an account with banks and financial institutions, instead having to rely on venture capital and private-equity investors for their funding in many cases. On top of that, insurance companies are giving cannabis business owners and their employees the cold shoulder. The difficulty that cannapreneurs have had with getting basic financial services could be stunting the inevitable growth of the entire industry.
Several states are set to vote on cannabis-related issues this election cycle. Nevada is one state that will deliberate about whether to legalize recreational cannabis in November. One CEO of Nevada-based cannabis businesses had his life insurance application denied – not for consuming cannabis, but for selling it to his customers and patients in need.
“I always thought there would be a potential risk to be denied for the insurance on an actuarial standpoint for using cannabis but never – for the life of me – would have thought I would have been denied just for my association with the industry,” Derek Peterson, CEO of Terra Tech Corp, said in an interview with Nevada Public Radio.
Terra Tech Corp. owns three licensed medical cannabis facilities in Las Vegas. In addition, they own the Edible Garden brand, which utilizes hydroponic farming to provide fresh herbs and leafy greens to supermarkets and restaurants.
Peterson is now rightfully concerned that his employees will also be denied insurance services and benefits. On top of that, Peterson pointed out how cannabis businesses have difficulty securing retirement plans and healthcare insurance for themselves and for their employees. Despite a booming industry that is providing a much-needed boost to state and local economies, many insurers are unwilling to write policies for those associated with cannabis businesses.
Cannabis business owners and entrepreneurs have been more than willing to cooperate with lawmakers, law enforcement and code regulation on just about every level. This is a sentiment that Peterson echoed as he finished his interview with KNPR.
“Now that we’re in the thick of it and operating there are a lot of things we want to see changed in terms of regulation both at the state level but also at the city. We’re doing our best to be good stewards and good economic providers in these local municipalities but we want some semblance of protection so we can continue to operate in that manner.”
Is there is a golden opportunity for open-minded local banks and smaller insurance providers to make a fortune off of this glaring need cannabis professionals have for their services? Why yes, that could be the understatement of the year.