New Rules: This bill could help cannabis companies finally get insurance coverage

Under the Clarifying Law Around Insurance of Marijuana (CLAIM) Act, insurance companies would no longer face federal criminal prosecution for providing insurance to qualifying cannabis businesses. The bipartisan House bill was introduced by Reps. Nydia M. Velázquez (D-N.Y.) and Warren Davidson (R-Ohio).

As cannabis remains federally illegal, cannabis businesses can struggle to find insurance providers, and even payroll systems, that are willing to work with companies involved in the cannabis industry. This has created substantial tension within the marijuana industry, particularly surrounding concerns about the survival of new businesses.

"Because of the conflict between federal and state law, insurers are still hesitant to write policies for cannabis businesses," Velázquez said in a press release. "That means thousands of legal small businesses are operating without a safety net. One fire or one storm could wipe out everything an owner has built, with no way to recover. The CLAIM Act fixes this by giving these entrepreneurs access to the same basic insurance protections every other legal business takes for granted."

The CLAIM Act would prevent federal agencies from canceling or restricting insurance policies if the insurer has worked with a cannabis business and would prohibit federal agencies from suggesting or encouraging insurers not to work with cannabis companies. The CLAIM Act also would require the Government Accountability Office (GAO) to provide data on "the barriers facing women and minority entrepreneurs seeking to enter the cannabis industry and identify ways to expand access to this growing market."

Sens. Ruben Gallego (D-Ariz.) and Kevin Cramer (R-N.D.) have also introduced the Senate version of the bill. "Much like marijuana businesses are barred from using bank accounts, they are also locked out of insurance markets," Cramer said in a recent press release. "In states that have legalized marijuana, including Arizona, legitimate cannabis businesses should have the same access to insurance coverage as any other business," Gallego added. "I'm proud to partner with Sen. Cramer to introduce this commonsense, bipartisan fix."

Insurance industry groups such as the American Land Title Association, American Council of Life Insurers and Council of Insurance Agents & Brokers have endorsed the CLAIM Act.

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