A pair of bipartisan U.S. senators reintroduced legislation on July 21 that would provide a safe harbor for insurance companies seeking to serve state-sanctioned cannabis businesses.
Sens. Kevin Cramer, R-N.D., and Ruben Gallego, D-Ariz., introduced the Clarifying Law Around Insurance of Marijuana (CLAIM) Act to ensure insurance companies no longer face legal liability for providing coverage to the cannabis industry. The bill comes as cannabis remains a Schedule I (adult use) and Schedule III (medical) controlled substance under federal law.
Cramer and Gallego serve on the Senate Banking, Housing, and Urban Affairs Committee, where the legislation was referred.
“Much like marijuana businesses are barred from using bank accounts, they are also locked out of insurance markets,” Cramer said. “Businesses, as we know, obviously assume risk [because] that’s part of being in business. But the risk for cannabis companies that operate in states where it’s actually legal is especially high. The CLAIM Act makes sure insurers can offer their commercial products to regulated marijuana-related businesses without fear of federal prosecution.”
The senators pointed out that 42 states have legalized medical cannabis programs, 24 of which have also legalized adult-use programs, creating a “haphazard regulatory environment” for cannabis-related businesses and services under federal prohibition.
“In states that have legalized marijuana, including Arizona, legitimate cannabis businesses should have the same access to insurance coverage as any other business,” Gallego said. “I’m proud to partner with Senator Cramer to introduce this commonsense, bipartisan fix.”
The nine-page legislation would prevent federal agencies from prohibiting, penalizing or otherwise discouraging an “insurer from engaging in the business of insurance in connection with” a cannabis-related “legitimate” business or a state, political subdivision of a state or Indian tribe that exercises jurisdiction over cannabis-related legitimate businesses.
Federal agencies would also be barred from:
- terminating, canceling or otherwise limiting the policies of an insurer solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business;
- recommending, incentivizing or encouraging an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance and insurance services offered to a policyholder, solely because the policyholder is a cannabis business or is connected to a cannabis business; and
- taking any adverse or corrective supervisory action on a policy to a cannabis-related business or those connected to a cannabis-related business.
Nothing in the CLAIM Act requires an insurer to engage in the business of insurance in connection with a cannabis-related business.
The act also requires the U.S. Comptroller General – through the Government Accountability Office – to carry out a study on the barriers to marketplace entry, including the licensing process, and the access to financial services for potential and existing minority-owned and women-owned cannabis-related businesses, and to report findings, determinations and recommendations to Congress.
