Federal Proposal Would Give Cannabis Industry Access to Insurance Services

New Jersey Sen. Robert Menendez (D) has introduced legislation to ensure cannabis businesses can access property, casualty, and title insurance. The Clarifying Law Around Insurance of Marijuana (CLAIM) Act, has bipartisan support in the Senate including Democrat Jeff Merkley (OR) and Republicans Rand Paul (KY) and Kevin Cramer (ND) as co-sponsors.

The bill would perform a similar function for the insurance industry as it relates to the cannabis industry as the SAFE Banking Act would for financial institutions – giving the sector explicit approval to serve cannabusinesses.

Menendez indicated that the measure would “ensure businesses can fully operate just as any other small business would.”

“Current federal law prevents these small business owners from getting insurance coverage, and without it, they can’t protect their property, employees, or customers. We can solve this problem with legislation that allows insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences.” – Menendez, in a statement

Along with preventing federal interference for companies who provide services to the cannabis industry, the CLAIM Act would prohibit penalizing or discouraging an insurance company from providing coverage to a state-legal cannabis business, including associated businesses such as lawyers or landlords working alongside the cannabis industry. It would also prevent the termination or limitation of policies because of cannabis-related business activities.

The Republican backers of the legislation both pointed to cannabis laws being a state’s rights issue and the bill being a free-market approach to the industry.

“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,” Paul said in a statement. “The states are making their own decisions on these issues, and it’s time for the federal government to accept that.”

Cramer called the measure “a federalist approach by opening the insurance market to compliant businesses and preventing federal law from hindering employees’ market access.”

“Federal law should not prohibit access to insurance for employees of local businesses these states voted to support, nor should it prohibit employers from acquiring insurance that protects their stores,” he said in a statement.

The CLAIM Act follows a bevy of bills introduced in Congress this session to normalize the cannabis industry or more broadly reform cannabis laws. In addition to the SAFE Banking Act – which was the subject of a committee hearing yesterday – Democratic Senators Kamala Harris (CA) and Corey Booker (NJ) have sponsored bills to remove cannabis from the federal drug schedule. Both Harris and Booker are running for the Democratic presidential nomination. Another presidential candidate, Massachusetts Sen. Elizabeth Warren (D), has also introduced legislation to strengthen the Tenth Amendment (STATES Act) as it relates to federal cannabis policy.