Cannabis is a billion dollar industry and grows every year as more U.S. states legalize adult use and medical use, but many of the businesses that hold together the industry’s infrastructure are operating without the safety net of complete insurance coverage.

Insurance services are hard to come by for cannabis businesses. Due to the ongoing federal prohibition, many insurance providers remain hesitant to get involved. The risks levels are untested, though more information is available every day the regulated industry continues putting down roots. Cannabis business insurance is available from the right providers, however, and it’s important to find a policy that doesn’t leave vulnerable gaps in your coverage. And with fewer providers, the premiums tend to be higher.

Regulators are hoping to ease the difficulty of cannabis-related businesses obtaining insurance. It’s enlightened self-interest on their part, as states want to require cannabis licensees to obtain proper coverage before finalizing an applicant’s paperwork. States like California and Colorado are encouraging insurers by holding webinars to inform the industry of what is possible, and they’re partnering with groups like the Cannabis Business Insurance Forum to make these events happen.

The first webinar in the series was presented by the Marijuana Enforcement Division of Colorado and also covered discussion of the regulatory structure. But education is only half the battle, as these events also bring together insurance providers and cannabis businesses. These webinars have been vital to increasing the number of insurers beginning to pursue the cannabis market as they begin to understand how it operates and the diverse coverage needs.

What may make big waves in the insurance industry is if Congress takes action, but there’s no clear indication if that will occur in 2021. There is a bipartisan bill being considered called the Clarifying Law Around Insurance of Marijuana (CLAIM) Act; it made some headway in 2020 but didn’t make it to debate on the Senate floor. So far in 2021, that hasn’t happened yet either. With an intact filibuster and a flustered Congress, it’s unclear what kind of progress will be made, though analysts have been optimistic about cannabis under the Biden administration.

The good news for insurers is that the statistics coming from those states that have chosen to regulate cannabis-related businesses are looking good. There are fewer workers’ compensation claims in states that have legalized as compared to states that have not, according to a study from the University of Cincinnati, Temple University, RAND Corporation and Wayne University.

And there is definitely a growing need for insurance coverage of all types. Especially in newly legalized states such as New York, where directors and operators insurance is going to become a huge market for the state that houses the financial capital of the world.

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What do you think insurance providers should know about working with cannabis-related businesses? What’s the biggest misconception? We want to hear your thoughts in the comments below.