Although the use of marijuana is still an offense under federal law, the capital of the U.S. and 23 U.S. states have passed laws that allow residents to use cannabis and its derived products for medicinal purposes. 17 additional states have enacted legislation allowing only the use of limited CBD oil. If these businesses are operating in the marijuana industry legally, why would insurance companies choose not to provide them with proper insurance policies?

Marijuana InsuranceWhile insurance companies might be discouraged from dealing with marijuana businesses due to federal laws, they cannot deny coverage to marijuana-related businesses in states where cannabis use is legal at the state level. Unlike the banking sector, the insurance industry is regulated under state law, just like the businesses it is attending to. Furthermore, federal laws against marijuana use are not actively enforced in states where medical marijuana possession and use is legal. On the other hand, there are certain limits on the quantity of marijuana in the possession of users, which vary by state.

Evolving landscape of marijuana law

Unfortunately, state laws are not identical in every state that has legalized the cultivation, distribution and use of marijuana. Cannabis use — both for medical and recreational purposes — is fully legal only in the states of Alaska, Colorado, Oregon, Washington State, and the District of Columbia. States such as California, Nevada and New York have only decriminalized the use of marijuana.

Individual states can also add their own terms to the legislation they adopt: in New York, patients are allowed to use medical marijuana edibles, oils, and pills, but they are not allowed to smoke cannabis. However, these dissimilarities in legislation only affect consumers and businesses, as insurance companies are free to work with any companies that legally manufacture or sell cannabis-related products.

Marijuana insurance industry must adjust

The insurance industry must adjust over time to create the right policies for marijuana-related businesses that need their products and properties insured. Homeowners who wish to grow marijuana on their property also need insurance policies. Because the legalization process of cannabis possession and use is still in progress, some issues might be new to insurers, but these issues cannot stand in the way of thorough and well-thought-out marijuana insurance policies. Instead of stepping aside, the insurance industry must strive to recognize its own faults and find solutions for all those involved in the marijuana industry, which has already gained legal status in numerous parts of the United States.