Insurance for cannabis-related businesses was recently brought to people’s attention after wildfires in northern California destroyed dozens of cannabis farms which had no insurance and millions of dollars was lost. One cannabis grower told the HuffPo that they had lost more than a million. Insurance providers don’t usually provide coverage to an enterprise if cannabis is involved due to the plant’s continued illegality at the federal level, with its Schedule 1 naughtiness.
In 1996, California became the first of these United States to legalise cannabis for medical purposes. 28 states and the District of Columbia now permit this, while eight and the DoC also allow it for recreational use. A vast amount of the stuff is produced in California; it’s the state’s leading cash crop.
How to get insurance for a cannabis business
Coverage for cannabis businesses is available from the surplus line market, where it is provided by carriers that are approved but not licenced by the state but will be licenced in the state where they are based. This insurance tends to be costlier and have stricter requirements and the state insurance commissioner will usually not settle disputes. There will be no payout if the insurer goes bust. California has 25 such carriers.
In the last week, it was announced that Golden Bear Insurance Company will be California’s first commercial insurance provider for cannabis businesses. Dave Jones, the state insurance commissioner, hopes it is the first of many, so consumers, employees, other businesses that deal with the dope purveyor and investors have access to insurance to enable them to recover from disaster, just like any regular business. “Our mission,” he declared, “remains insurance protection for all Californians …” Earlier in the year, Jones suggested that commercial insurance companies cover the cannabis industry, staging meetings between insurance executives and cannabis business owners, organising tours of cannabis businesses and holding a public hearing to identify the insurance gaps faced by the industry. He is unworried about the prospect of federal intervention by the Trump administration, which takes a dimmer view of cannabis legalisation than did its predecessor, citing the existence of those 25 carriers.
Tom Angell, chairman of the pressure group Marijuana Majority, called this “another sign that marijuana is becoming more mainstream.” Others are the growing involvement of major corporations with the industry and increased voter support for legalisation. This support amounts to 64 percent of Usonians, per a poll by Gallup released in the last week, the highest level of support since the pollster first asked the question almost half a century ago. A majority of Democrats, Republicans and independents were all in favour. We are, declared Angell, moving “away from the prohibition era – and fast.”
All about Golden Bear’s CEO
The CEO of Golden Bear Insurance Company is Rupert Hall, the son of another insurer who was president of MJ Hall and Company. This insured aviation magnate Howard Hughes, then the world’s richest man. Hall well remembers the day Pater came home and told him he was having to force Circus Circus, which Hughes then owned, to install nets beneath trapeze acts, or there would be no insurance. Hall Senior also gave coverage to daredevil motorcyclist Evel Knievel when he tried to fly over the water fountains of Caesar’s Palace in Las Vegas and broke every bone in his body.
Header Image via – Green Rush Daily