Is Cannabis Insurance Legal?


Wow! Who would have believed we would even be discussing this topic?

There is a huge and booming market for legal Cannabis not only in California, but also across the U.S. The states which have decriminalized the use and growing of cannabis have also seen the insurance market respond to the demands of what is now considered legitimate business. Among the businesses involved are the growers, distributors and retail outlets.

Legally, there have been many issues raised about 'insuring' the business end of cannabis. How can it be legal to insure a business in which the Federal Government still considers illegal? What about facing the insurance challenge facing cannabis companies is securing insurance that insures cannabis operations. Carriers frequently challenge coverage for claims arising out of cannabis-related losses, and courts often side with carriers. "A large and growing body of case law supports the position that because the object of the insurance contract is illegal, a carrier may deny coverage for a cannabis business." as stated in Insurance Journal.

Cannabis insurance raises several legal considerations. Chief among them is whether cannabis insurance is legal. The answer is yes. The McCarran-Ferguson Act, passed in 1945, enshrined the precept that insurance is the business of the states. The licensing, regulation and execution of insurance laws is a plenary power of the states. With the notable exception of healthcare, this doctrine has been undisturbed for decades.

As such, Califorinans need not worry about the 'legality' of properly insuring their cannabis business. (You should check with the laws of the state in which you reside before you make important decisions on this matter.)

With the prospect of the cannabis business rising very closely to the $2,500,000,000 mark...I am sure the insurance portion of the equation will be handled well.

Let me know your thoughts on it all....... Read the article HERE.

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DELANEY Insurance Agency, Inc.

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Address:   Delaney Insurance Agency, Inc.

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               Rancho Cucamonga, CA 91730
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