Marijuana Business Insurance
Pardon the sophomoric pun, but the demand for insurance in the cannabis industry has been growing like a weed. The California recreational pot market is now legal statewide this year and both medicinal and recreational dispensaries are open for business. California is the most recent state in the Union to ratify the legalization of the recreational use and sale of marijuana. The list of states has grown to nine as Pandora’s Box seems to be cautiously opening throughout the country despite legislative retaliation efforts taken by the conservative Trump administration.
Nine states as well as the District of Columbia have opened their doors to recreational cannabis use. In defiance of federal drug statutes, thirty states are allowing the growth and purchase of pot for medical use only. Many state governments are choosing to believe that the financial gains generated by the cannabis industry outweigh the moral and social risks involved with the taking of the drug and the culture that surrounds it.
The fledgling industry did $9 billion in sales last year and is anticipated to grow to $21 billion by the end of 2021. In addition to tax 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 insurance and financial protection.
Personal life and disability insurances are readily available through carriers in the standard and specialty markets. Those working directly in and consulting for the cannabis industry can usually acquire personal income protection insurance and life insurance benefits from traditional sources. Although most prospects end up paying flat extras or higher “smoker” premiums considering their level of exposure to the industry and to the drug itself, individual financial protection products are available throughout the country.
However, business insurance is quite a different story. Due to opposite takes on the legality of the industry by different levels of government, American 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.
But Petersen International has engineered the solution. We have partnered with a specialty-market insurer that is willing to provide small to high-limit benefit, term insurance to marijuana companies for key person coverage, business loan coverage as well buy/sell insurance. The 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 annoyingly-short lender and investor timeline constraints on 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.