Last week, United States Senator Bob Menendez introduced a bipartisan bill that would help the cannabis industry gain much-needed access to insurance.
Menendez is a senior member of the Senate Banking Committee and chairman of a subcommittee underneath the Banking Committee that oversees insurance, so he knows specifically how important insurance can be. The Clarifying Law Around Insurance of Marijuana, or CLAIM Act of 2021, is also being backed by Senator Rand Paul, a Republican, and Senator Jeff Merkley, a Democrat.
“The voters in New Jersey spoke loud and clear this November when they overwhelmingly approved of recreational marijuana use, the governor and state legislature have acted and now, it’s time for the federal government to take the shackles off of state-authorized cannabis businesses, allowing this burgeoning industry to thrive,” said Senator Menendez. “Current, federal law prevents these small business owners from getting insurance coverage, and without it, they can’t protect their property, employees or customers. Our legislation simply levels the playing field for legal cannabis businesses, allowing them to fully operate just as any other legal, small business would by permitting insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences.”
“The principles behind the CLAIM Act are simple: respect the voices of the states and their people and stop shutting out legitimate businesses from obtaining basic protections,” said Senator Paul. “The states are making their own decisions on these issues, and it’s time for the federal government to accept that.”
“State, legal cannabis businesses should not be shut out from the kind of tools and financial services all businesses need to thrive—including insurance to protect stores, customers and workers from an unexpected emergency,” said Senator Merkley. “It’s time to pass the CLAIM Act so we can deliver on that principle and continue working together to support our local businesses.”
What the CLAIM Act Would Do
The CLAIM Act would insure that businesses in legal states would have access to things such as worker’s compensation, property, casualty, and title insurance. Currently, even businesses in legal states are often denied access to insurance because insurance companies could face penalties under federal law, leaving companies vulnerable to being uninsured and unprotected.
The CLAIM Act would also prohibit penalizing or discouraging insurers from working with the legal industry, as well as prohibit the termination of policies simply because a business deals with legal cannabis, as long as that business is following all the rules and regulations.
Additionally, the CLAIM Act would address another long-standing issue that has plagued the cannabis industry, access to spaces and equipment. Under this ruling. Owners and operators of property or equipment rented to the cannabis industry would also have access to insurance. No longer would businesses have to be shady about what their operations are really going to be doing.
In addition to this Senate bill, Congresswoman Nydia M. Velazquez, a Democrat, plans to do the same thing in the House, in order to get two pieces of legislation going. The industry will have to wait and see what comes from these pieces of legislation, but if this and the SAFE Banking Act pass, the industry will be miles ahead in terms of having access to the needed tool to conduct business safely.