Cannabis Business Insurance Solutions


2020 proved to be another year of growth and evolution of the cannabis industry in the United States.  Arizona and Mississippi were added to the growing list of states in which the use of marijuana became legal.  Also several states such as New Jersey, Montana and South Dakota broke new ground with legislation passing in 2020 to eventually approve recreational cannabis use in addition to the already legal use of medicinal marijuana.  The use of marijuana and marijuana products in one form or another is now legal in 44 states in the Union as well as Washington, D.C.  Additionally, most states now allow for the sale and use of low-THC CBD oil extracts which have proliferated commercial markets, alleging exceptional health benefits to consumers.  Liberal ideologies toward the plant continue to cautiously spread despite legislative retaliation efforts taken by the previous administration.  State-level governments are becoming more accepting of the idea that the financial gains generated by the cannabis industry outweigh the moral and social risks involved with the intoxicant and the culture commonly associated with it.

Startup cannabis businesses continue to hit the market and now fast-paced mergers and acquisitions of established companies are rampant.

The flourishing industry is expected to reach $30 billion in market value by 2025.  In addition to sales and taxation revenue, the American cannabis industry is creating jobs.  Over 120,000 people are employed as growers, manufacturers, distributors, researchers, testers and retailers.  There are more than 20,000 legal pot-associated businesses in this country.  The industry still has growing pains and will face roadblocks into the future, but as its growth continues, it is in desperate need of the backing of insurance and other forms of financial protection that most other U.S. commercial sectors are readily afforded.

American life insurance companies still have yet to substantially embrace the cannabis industry in general, and will not offer any kind of financial indemnification insurance on marijuana businesses themselves.  Even more liberal markets like Lloyd’s have refrained from offering business coverage to cannabis companies.

Petersen International, in partnership with a specialty-market carrier, has engineered some appropriate solutions for those seeking insurance despite their exposure to the cannabis industry.  We are able to offer small to high-limit term death benefits to marijuana companies for business insurances including key person coverage, business loan coverage as well buy/sell insurance.  These business insurance plans are simplified-issue, requiring no intrusive medical exams, blood draws or urinalyses.  And they can be underwritten and approved relatively quickly which helps address the often short contract timeline constraints required by lenders and investors on startup and expanding businesses.

Another issue that sees no end in sight is the cannabis industry’s frequent clashes with the banking industry.  Marijuana companies are still often unable to acquire bank certification and checking accounts due to the looming question of legality of the industry on a national level.  However, the Petersen International program allows for policy premiums to be paid by credit card which is extremely fortunate for and helpful to these legal corporations.

With the recent change in political ideologies of the President’s office and the new liberal lean to Congress, we may see more business solutions opening up to the industry in the domestic marketplaces.  But until then, Petersen International remains your main resource for business insurance solutions for marijuana companies.  To learn more about these products, give us a call at (800)345-8816.

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