As a growing number of areas start to legalize medical and even recreational use of cannabis, a new market is growing.
Many areas across the United States – as well as in various other parts of the world – there has been a growing momentum on a political and cultural front to legalize both the medicinal and recreational use of marijuana, and insurance brokers are among those who have spotted a considerable change in business that is now on its way.
There are a number of opportunities that could rapidly open with the widespread legalization of pot.
It has become quite clear to insurance brokers who are keeping up with the latest developments, that there will be both opportunities and challenges opening up for insurers. Many companies are already offering policies that would cover the growers of marijuana, the manufacturers and dispensaries, and others involved in the process of bringing cannabis from the plant to the consumer in states where it is legal.
While federal law still calls marijuana illegal, insurance brokers are seeing changes in the state laws.
The Justice Department announced in August 2013 that it would not be challenging the marijuana laws of individual states. In January 2014, Attorney General Eric Holder announced that the banking system would be accessible by legal marijuana businesses in the hopes of improving public safety within this market.
As these announcements are made, insurance companies are starting to see the marijuana industry in an entirely new light with a number of different factors and areas which can benefit from protection. Growers, dispensaries, stores, and even ancillary companies are all starting to find that they have coverage through policies available to them and that the competition is slowly starting to grow so that they have a bit of choice and the ability to compare.
At the moment, the largest insurers such as Travelers, Farmers, and State Farm aren’t reaching out very far toward this industry – as is their habit of focusing on broader products – but insurance brokers are watching those companies as they seek to profit indirectly from this new “green rush” by providing coverage in areas such as policies to protect the owners of the buildings that are being rented to marijuana businesses.