2019 has been a risky year for the cannabis industry: the vaping controversy, the uncertainty surrounding cannabis legislation at every level, and the subsequent financial pinch it puts on the industry.
Will 2020 be any different?
The top concerns for the cannabis industry might surprise you as we move closer to the end of the year. The passage of the Secure and Fair Enforcement (SAFE) Banking Act is a top concern for many, as this bill now incorporates the Clarifying Law Around Insurance of Marijuana (CLAIM) Act. Both of these bills would clarify the rules for bankers and insurance providers to work with cannabis-related businesses. And certainly the difficulty in getting proper product liability insurance has been a challenge for many cannabis businesses. The vape problems that have captured the media have also been problematic, even though the tainted vapes were sourced from illicit suppliers and not a part of the regulated industry.
There is a bigger concern, however, for the cannabis industry as it continues to grow and evolve (with or without) the full approval of the federal government. With all these new risks that this new industry has weathered so far, the biggest concern is at the root of all of them. The cannabis industry’s real top concern going into 2020: The public perception that cannabis is bad.
While the general public perception of cannabis has trended toward the positive, the decision makers at local and state governments haven’t been as willing to play nicely. Cannabis is still a Schedule I drug, a serious federal designation that ranks cannabis up there with heroin. Many states have legalized some form of cannabis, whether adult-use or medical, and this conflict of state and federal laws has created a great deal of tension on all sides.
These negative perceptions have a real world impact on cannabis-related businesses. Many insurance providers see the cannabis industry as too risky, with the complex, unclear rules that govern the systems around it. There is so much unknown, too, which is scary for an insurer: cannabis is new and calculating the risk of so many types of (much needed) cannabis insurance is full of uncertainty.
Another major risk facing the cannabis industry is filling the job vacancies. Cannabis companies need qualified people to keep moving forward, but there are more jobs than applicants that can fill them. Though there are job seekers out there, the negative perceptions of the cannabis industry keep some from applying.
Mass media, too, has not been particularly kind to cannabis and that doesn’t look to change in 2020. The vaping scare has spread misinformation about legal vaping cartridges, as the injuries have been from illegally sourced vape cartridges but legal cannabis is taking the political flack for it. Even so, many cannabis businesses are calling for tougher regulations to ensure the safety of legal cartridges as we learn more about what went wrong in the illegal ones.
For cannabis insurers and companies, it can be difficult to know what to believe with so much misinformation and pending or potential legislation that could make major changes to the industry. Will the federal government take steps to address the clear needs of the banking and insurance industries to allow them to work with cannabis companies without fear? Will legislation change the rules for the vaping industry? It remains unclear, and the bad reputation of cannabis continues to follow it, though it is being chipped away over time