On Thursday, the California Department of Insurance announced licensed marijuana businesses are now able to purchase commercial insurance policies.
Obviously, this is tremendous news for California’s recreational cannabis industry.
Historically speaking, most marijuana-related businesses seeking an insurance policy from their local Allstate, State Farm, or Aflac insurance agent have been met with stern resistance. The primary reason? California’s legal marijuana companies have been shunned by most reputable insurance providers because of legal marijuana’s Schedule I status.
Recreationally legal for adults in eight states and medically legal in 29, marijuana is considered California’s number one cash crop. Cognizant of the important ramifications of being properly insured against financial loss, California Insurance Commissioner Dave Jones has just approved the first commercial insurance provider for California’s marijuana-related businesses.
— CA Dept of Insurance (@CDInews) November 2, 2017
A long-overdue development, California first legalized medical marijuana more than two decades ago.
Commissioner Jones understands the vital role insurance will play in California’s commercial marijuana industry as it continues to grow. Commercial insurance protects individual businesses from commonly experienced losses including property damage, theft, liability, and employee injury. When adequately insured, California’s cannabis companies can more easily recover from these types of losses. Without it, many of the state’s cultivators, dispensaries, and other weed-related businesses could find their enterprises susceptible to acts of nature, unscrupulous individuals, or frivolous lawsuits.
Per the press release issued by the California Department of Insurance, Jones explained:
“Consumers who visit cannabis businesses, workers who work there, businesses who sell products to or rent property to cannabis businesses, and the investors, owners and operators of cannabis businesses all should have insurance coverage available to help them recover when something goes wrong just as any other legalized business does.”
Contacted and confirmed by the Huffington Post, Golden Bear Insurance Company has been identified as the first authorized insurance company to issue coverage for California’s legal marijuana businesses.
Focused on insurance coverage for all of California’s legal businesses, Jones concluded Thursday’s announcement by noting, “Our mission remains insurance protection for all Californians, which includes insurance for California’s legalized cannabis businesses and its customers. We encourage more insurance companies to file cannabis business insurance products with the department to meet the needs of this emerging market.”
Photo courtesy of Alan Cleaver