I don’t know what you were doing on 4/20. I’m not sure what I was doing on 4/20! But I know that the government was busy considering a bunch of cannabis-related bills- and they keep coming. The latest protects marijuana insurance companies from being penalized for providing insurance to legal marijuana companies.
What is the Bill to Protect Marijuana Insurance Companies?
The bill to protect marijuana insurance business companies was introduced last Thursday 4/27/23, by bipartisan congressional lawmakers. It offers safe harbor to insurance companies that work with legal marijuana businesses.
Known as the Clarifying Law Around Insurance of Marijuana (CLAIM) Act, it is being sponsored by Reps. Nydia M. Velazquez (D-NY) and Warren Davidson (R-OH) in the House and Senators Rand Paul (R-KY) and Bob Menendez (D-NJ) in the Senate. The measure has previously been introduced in the last two Congresses.
The bill would protect marijuana insurance companies agents, insurers, and brokers from being punished for providing insurance to licensed marijuana businesses. It was filed just one day after the House and Senate filed a related bill that would protect banks that work in the industry.
“Insurance companies are oftentimes reluctant to provide coverage to cannabis-based businesses due to discrepancies between federal and state laws,” Velazquez said in a press release.
“These promising new businesses have no safety net in place and are left extremely vulnerable to natural disasters or fires that may destroy all they’ve worked to build. This bill will help entrepreneurs operating in the legal cannabis sector access the insurance they need to protect their business,” she went on to say.
Davidson expressed similar sentiment stating that insurance companies “must be allowed to participate for the marketplace to function properly, they play a critical role in the development of small businesses.
“The CLAIM Act takes needed corrective action by granting the ability to insure risk without having otherwise lawful markets blocked by regulators.”
The Bill to Protect Marijuana Insurance Companies- Details
The latest bill to protect marijuana insurance companies is identical to the last two that had been filed.
Currently, insurance companies are restricted in how they can provide property, casualty, and title insurance coverage to cannabis companies. The bill would eliminate those restrictions by removing penalties for marijuana insurance companies that offer coverage without limitations.
The Act also requires the Government Accountability Office (GAO) to study and issue a report on “barriers to marketplace entry, including in the licensing process, and the access to financial services for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.”
It also protects employees of marijuana insurance companies ensuring they would not be held liable for working with a cannabis company.
Supporters of the bill say that in addition to protecting cannabis companies, it would also open doors for businesses that have previously been denied bank financing due to a lack of coverage.
The reintroduction of the Act coincides with the filing of the Secure and Fair Enforcement (SAFE) Banking Act which protects banks that provide financial services to cannabis companies.
The Outlook on the Bill to Protect Marijuana Insurance Companies
The bill to protect marijuana insurance companies promises great breakthroughs for cannabis businesses. But will it pass?
A divided Congress with Republicans in control of the House means legislators must focus on smaller measures like the banking bill instead of broader legalizations to get any type of cannabis reform this session.
Last week, Senate Majority Leader Chuck Schumer (D-NY) said he was disappointed that the SAFE Plus package he worked on last year didn’t advance. “We came close (but) we ran into opposition at the last minute,” he said. He promised to continue working on the bill will the hopes that he could get it to “work in a bipartisan way.”
“Until we reach our goal, I promise to be in your corner and work like hell to bring federal cannabis policy into the 21st century. We will need you, as we always do, to reach out to members of both parties, in both chambers- especially Republicans- so we can make progress on cannabis reform,” he went on to say.
Schumer has been meeting with Democratic and Republican Congress members to discuss cannabis reform proposals in the early months of the new session hoping to get closer to a bipartisan solution.
Senator Cory Booker (D-NJ) also showed his support acknowledging that the failure to advance the SAFE act and related bills such as the one to protect marijuana insurance companies “literally means that hundreds of businesses go out of business”. He promised to keep working to push the cannabis reform package through.
Rep. Earl Blumenauer (D-OR) recently filed a bill that would allow marijuana companies to take federal tax deductions. He spoke at a press release emphasizing the importance of the government partnering with advocates to push through proposals that would end the war on drugs. He supports an “all-or-nothing” mentality.
Other Bills to End the War on Drugs
4/20/23 saw the proposal of several other marijuana-related bills that are also being considered- although lawmakers are saying the timing had nothing to do with the unofficial holiday.
Rep. Brian Mast (R-FL) introduced a bill to protect the Second Amendment Rights of marijuana consumers. It would allow them to possess, purchase, and sell firearms. They are prohibited to do so under current legislation.
Reps. Dave Joyce (R-OH) and Alexandria Ocasio-Cortez (D-NY) filed a bill that would provide a federal grant program to support the expungement of cannabis-related crimes on a state and federal level.
Earlier in April, Joyce partnered with House Minority Leader Hakeem Jeffries (D-NY) on a measure that directed the attorney general to form a commission to study and make recommendations about regulating cannabis in a fashion similar to how alcohol is regulated. The legislation would pave the way for federal legalization.