Insurance for the Cannabis Industry

The American cannabis industry continues to boom.  The use of marijuana and marijuana products in one form or another is now legal in 47 states in the Union as well as Washington, D.C.  And the number of states allowing for complete recreational use by adults has risen to 11.  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 herbal intoxicant continue to cautiously spread despite legislative retaliation efforts taken by the current administration.  State governments are accepting to believe that the financial gains generated by the cannabis industry outweigh the moral and social risks involved with taking the drug and the culture that surrounds it.

The fledgling cannabis industry did over $10 billion in sales in 2019 and is anticipated to grow to $21 billion in annual sales by the end of 2021.  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 is becoming a giant, and 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.

Due to varying takes on the legality of the industry by different levels of government, American life and health insurance companies have yet to fully 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.

Those working directly in and consulting for the cannabis industry can usually acquire personal income protection insurance and some forms of death benefits from specialty-market sources.  However, solutions in the domestic markets are much more elusive, and most prospects end-up paying hefty flat extras or higher “smoker” premiums considering their individual level of exposure to the industry and to the drug itself.

Petersen International has engineered some appropriate solutions for those seeking insurance despite their exposure to the cannabis industry.  Through Lloyd’s of London, we provide excellent personal disability and accidental death insurance options for those working in marijuana businesses.  But even more importantly, we have partnered with a specialty-market insurer that writes small to high-limit benefit, term insurance to marijuana companies for business insurances including key person coverage, business loan coverage as well buy/sell insurance.  The business insurance plans are simplified-issue, requiring no intrusive medical exams, blood draws or urinalyses.  And they can be underwritten and approved quickly which helps address the often short contract timeline constraints required by lenders and investors on start-up and expanding businesses.

Another attribute of our program is that the policy premiums can be paid by credit card which is extremely fortunate for these clients since most marijuana businesses are unable to acquire bank certification and checking accounts due to the looming question of legality of the industry on a national level.

To find out more about our cannabis industry insurance products, give us a call at (800)345-8816.