420 with CNW – Bipartisan Senate Bill Seeks to Ease Marijuana Business Access to Insurance Services

July 29, 2019 03:20:20

A bipartisan bill introduced in the U.S. Senate on Monday seeks to ensure greater access to insurance policies for marijuana businesses in states where the drug is legal. The bill titled “Clarifying Law Around Insurance of Marijuana (CLAIM) Act” was sponsored by Sen. Bob Menendez (D-NJ). The cosponsors of the legislation are Sens. Jeff Merkley (D-OR), Rand Paul (R-KY) and Kevin Cramer (R-ND).

Currently, federal law makes it very difficult for cannabis businesses to get casualty, property and title insurance cover regardless of the state laws on the matter.

If the CLAIM Act is passed, insurance companies wouldn’t have to fear that they would be penalized or discouraged from selling insurance policies to companies that directly or indirectly serve the marijuana industry. For example, federal punitive action wouldn’t be taken against an insurer who covers the property managers hired by marijuana businesses.

Additionally, the law would bar federal agencies from incentivizing, encouraging or recommending that insurance companies refrain from working normally with a business in the marijuana industry or one indirectly serving the industry.

The draft law also includes protections for people who are employed by insurance companies. Its provisions free these people from being held liable for the work that they do when serving marijuana businesses.

While introducing the bill, Menendez said that marijuana businesses are unable to protect their customers, employees, premises and other property. The bill would therefore correct this situation and put cannabis businesses at par with businesses in other industries.

Sen. Rand Paul added to what Menendez said by saying that the basic principles behind the CLAIM Act are that the federal government should respect what the people in many states have decided and put an end to the barriers legitimate businesses are facing regarding access to basic protections.

The supporters of this bill assert that giving cannabis companies access to insurance cover would also remove some barriers to financing since many lending institutions automatically disqualify businesses that cannot get insurance cover.

While supporting this legislation, the media relations director of NCIA (national cannabis industry association) said that the wildfires in California and other cannabis growing regions had shown that the long-term survival of the marijuana industry depends on their ability to get insurance cover against all the foreseeable risks, just like other businesses do.

Gov. Phil Murphy (D) of New Jersey, who recently signed a law expanding the medical marijuana program of the state, also supported the bill introduced by Menendez. Murphy said it was important that medical marijuana providers are given the same protections that are the norm for the providers of other medical services.

Analysts are waiting to hear what the different marijuana businesses, such as Grapefruit Boulevard Investments Inc. (OTCQB: IGNG) and Golden Developing Solutions Inc. (OTC: DVLP), have to say about the flurry of activity regarding marijuana policy reform in both legislative chambers of the U.S.

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