Despite the rapidly growing popularity of the cannabis industry, business owners are finding it challenging to insure their companies against risks, such as property liability, common to any business owner. This is due in large part to the disconnect between federal and state laws. Recreational cannabis is legal in 11 states, with 5 more states addressing legalization in 2020, but still illegal at the federal level. The continued movement towards state legalization raises cannabis delivery risk management concerns for an increasing number of entrepreneurs. California, however, could be the state others look to as insurance companies and the government alike begin to tackle protections for cannabis dispensaries.
California Setting the Stage for Reducing Barriers to Cannabis Dispensary Coverages
The legalization of recreational marijuana has led to a proliferation of dispensaries in California. There has been some movement in the state towards easing the challenges dispensaries face, including a ballot measure that, if passed, will reduce the taxes and decrease regulations for the marijuana industry. Source: www.canngenins.com. In doing so, dispensaries will potentially have a greater ability to purchase insurance that tends to run at a higher price point for this industry. While finding coverage is still a challenge, California is also seeing a growing list of insurers offering products to the industry.
California is actively seeking to reduce risk management challenges for the cannabis industry, making it easier for those in the business to find adequate insurance and affordable prices. In doing so, the state will likely become an example for others to follow.