A federal bill built to open up insurance access to the cannabis industry is moving through Congress, but can this bill do what it promises?

Called the Clarifying Law Around Insurance of Marijuana (CLAIM) Act, aka H.R. 4074 and S. 2201, this bill would make it possible for insurance companies to provide coverage to cannabis-related businesses. Currently, there are very few insurers that work with cannabis-related clients–the risk of catching federal charges is too high. The CLAIM Act would change that: Insurers would be allowed to work with cannabis-related businesses that are state-licensed and compliant.

If insurers are allowed to work with state-licensed cannabis-related businesses and providers without fear of repercussion, there will be a huge need for coverage in every element of the budding cannabis industry. This would be a huge step forward for the corporations and entrepreneurs in the cannabis space to insure their employees, their property and equipment, and even their customers against the worst.

Robberies do happen and not all cannabis operations are able to obtain insurance to be able to replace stolen product or equipment, or even to make any repairs that the robber caused. This is an insurance type that most businesses are able to easily obtain, but federal prohibition of cannabis has prevented those same options from being readily available to the cannabis industry. Dispensaries are the most likely to need this insurance, but all stops along the seed-to-sale chain have the opportunity to be targeted.

Fire insurance is another major need in the cannabis industry. Fires can destroy dispensaries or even burn up greenhouses on the farm. The wildfires in California were devastating to many farmers: Some lost their hard-earned farm to the fire and those that were spared the fire’s direct path dealt with ashy air and crops. The risk seems too high for many insurance providers to get involved in providing coverage for that market.

Will the CLAIM Act be able to open up the insurance market to the cannabis industry? That depends on the changes it sees through the Congressional process. Both the House of Representatives and the Senate are reviewing companion bills, and the effort seems largely bipartisan in both houses. The House bill is sponsored by Representatives Nydia Velazquez, a New York Democrat, and Steve Strivers, a Republican from Ohio. The Senate bill is sponsored by Senators Bob Menendez, a New Jersey Democrat, and Rand Paul, a Kentucky Republican.

The last status of the Senate bill was it had been sent to the Committee on Banking, Housing, and Urban Affairs in late July, and no other official movement has been made since. In the House, it was much the same story: the bill was referred to the House Committee on Financial Services in late July. Will they recommend changes? How will they reconcile these two versions of the bill?

Many questions remain before it becomes clear how this bill will be implemented.

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What do you think? Will the CLAIM Act will make it through? Let us know in the comments below.