Since Jeff Sessions, America’s new attorney general, seems to not care that cannabis is legal in states that voted to make it so, it stands to reason that his Department of Justice, which has a lot of influence over the state level decision to legalize, will likely be looking to change the way cannabis is regulated – to make the drug even harder to access. The answer may be a new set of regulations, designed to reduce any potential for cannabis use that could lead to a relapse into alcohol or drug use.

In just over a year, the historic U.S. cannabis legalization will be enacted, when leaders from both parties make it official at a White House event next Tuesday. The date of the historic announcement — Oct. 26, 2018 — is a year earlier than anticipated. It has cannabis companies in the United States and overseas scrambling to get ready for the end of prohibition, which has shaped their business philosophies, corporate model and strategy.

U.S. cannabis insurers expect to see the federal legalization of recreational marijuana in the next decade, putting the industry on track to become the largest in the world by revenue, according to a new study.. Read more about federal legalization bill 2021 and let us know what you think.



As Congress moves closer to legalizing marijuana at the federal level, insurers are secretly preparing for a ten-fold surge in sales to the burgeoning $17.6 billion-a-year cannabis sector.

While 36 states and the District of Columbia have legalized cannabis for medicinal or recreational purposes, stringent federal regulations that classify marijuana alongside heroin, methamphetamine, and LSD keep insurance for producers, testing laboratories, and merchants in check.

Legal cannabis sales in the United States increased 45 percent last year and are projected to reach $41 billion in 2026, according to Colorado-based research company BDSA.

However, according to insurance brokers who spoke to Reuters, the sector only issued around $250 million in policies last year, with just a few companies providing minimal property and liability coverage.

According to more than a dozen insurers, brokers, agents, attorneys, and cannabis company owners contacted by Reuters, businesses also need coverage for crops and theft, as well as higher payment levels.


‘Overwhelming Need’ is a phrase used to describe a situation when there is a

Some insurers are attempting to fill the vacuum with new kinds of coverage as Congress debates legislation that would relax federal regulations. Because insurers are governed at the state level, they may already provide coverage in states where marijuana is legal, and federal decriminalization would extend the market.

Rocco Petrilli, head of the National Cannabis Risk Management Association (NCRMA), a trade organization of 3,000 cannabis companies, stated, “There is an enormous demand for the appropriate types of insurance.”

In April, the NCRMA established a captive insurer to provide property, general premises liability, and product liability coverage to its members. Workers’ compensation and car coverage will be added in the fourth quarter, according to Petrilli. The captive model offers coverage that is customized to the requirements of NCRMA members exclusively.

CannGen Insurance Services, a national managing general underwriter of cannabis, CBD and hemp risks that works with commercial carriers, plans to introduce Directors & Officers (D&O) and employment practice liability cover soon, through a new division called CannGenPRO, said Charles Pyfrom, chief marketing officer. CannGen distributes via appointed retail and wholesale brokers to provide “one-stop-shopping.”

As more states legalize marijuana, major insurers such as Progressive Corp (PGR.N), Farmers Insurance, Liberty Mutual, and AXA SA (AXAF.PA) are providing coverage. According to state licensing documents, they often sell via companies and collaborate with CannGen and others.

Progressive said its vehicle insurance cover liability and physical damage in areas where cannabis transportation is allowed, but not cargos. The other firms did not respond to requests for comment.

New insurance are desperately needed by cannabis company owners, who complain that coverage is frequently difficult to come by and costly. Cannabis shop operators, for example, told Reuters that their premiums are 20% to 30% more than what a typical store would pay. According to them, certain kinds of car insurance may cost four or five times as much.

D&O insurance, which is crucial for attracting seasoned business leaders and raising capital, is also expensive, said Gavin Kogan, CEO of Grupo Flor, which is a licensed cultivator, distributor and manufacturer with five dispensaries in California. He said he pays $85,000 to $100,000 annually for $1 million of D&O protection, “and the coverage is super limited.”

In addition to posing operational difficulties, a lack of insurance may increase expenses. Low cargo insurance coverage limitations, for example, may compel businesses to divide shipments, according to Gene Brown, an insurance specialist specializing in cannabis coverage in Carmel, California.

He said, “You have huge ships carrying large quantities of cannabis or moving significant amounts of money.” They need $1 million in coverage, but “right now you can only obtain $500,000.”

Push for Legalization

As more states legalize marijuana, legislators in the United States are under increasing pressure to follow suit. Senate Majority Leader Chuck Schumer lent his support to the campaign last month, presenting an ambitious draft plan to legalize marijuana. 

The House of Representatives approved a bipartisan measure in April that would enable banks to offer services to cannabis businesses in areas where the practice is legal.

Given Democrats’ small Senate majority and its wide breadth, Schumer’s bill is unlikely to become legislation in its present form, according to Ian Stewart, partner and co-chair of legal firm Wilson Elser’s cannabis practice.

Analysts and insurance executives believe similar measures indicate Congress is gradually loosening marijuana restrictions.

According to the BDSA, federal legalization is expected in 2022, and Petrilli of the NCRMA estimates that insurance sales to cannabis companies might reach more than $3 billion in the following five years if the sector were covered similarly to other enterprises.

“Whoever takes the lead in offering competitively priced insurance with the required coverage for this sector will be very, very successful,” Kogan added.

This article broadly covered the following related topics:

  • federal legalization bill 2021
  • federal legalization bill 2021 update
  • u.s. workers get biggest pay increase in nearly a decade
  • the richest fifth of u.s. households get nearly half of all u.s. income
  • legality of cannabis by u.s. jurisdiction
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