Bipartisan congressional lawmakers have filed a bill to provide a safe harbor to insurance companies that work with state-legal marijuana businesses.
The Clarifying Law Around Insurance of Marijuana (CLAIM) Act was filed by Reps. Nydia M. Velázquez (D-NY) and Warren Davidson (R-OH) on Wednesday.
The legislation would protect insurers, brokers and agents from being penalized by federal regulators for providing insurance services to state-licensed marijuana companies.
“Because of the conflict between federal and state law, insurers are still hesitant to write policies for cannabis businesses,” Velázquez said in a press release. “That means thousands of legal small businesses are operating without a safety net. One fire or one storm could wipe out everything an owner has built, with no way to recover. The CLAIM Act fixes this by giving these entrepreneurs access to the same basic insurance protections every other legal business takes for granted.”
Davidson said that “businesses operating legally under state law should be free to purchase insurance, and insurers should be free to serve them.”
“The federal government should not use regulation to interfere with lawful commerce or override decisions made by the states,” he said. “The CLAIM Act removes that federal interference and protects the freedom of insurers and their customers to do business.”
Earlier this year, Sens. Kevin Cramer (R-ND) and Ruben Gallego (D-AZ) filed similar legislation in the Senate.
This is the fourth Congress in a row that the cannabis business insurance measure has been introduced, and the text of the current bill, H.R.10471, remains largely the same as prior versions.
Earlier this year, bipartisan House and Senate lawmakers filed related legislation to provide safeguards for banks that work with the cannabis industry.
As it stands, cannabis firms are limited in their ability to gain property, casualty and title insurance coverage. The CLAIM Act would prohibit federal agencies from penalizing insurance providers for simply covering those businesses, and it would bar insurers from terminating or limiting policies for marijuana companies or ancillary businesses due to the nature of their enterprise.
The legislation also includes a requirement that the Government Accountability Office (GAO) 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 additionally provides protections for employees of insurers, affirming that they could not be held liable just because they work with a cannabis company.
Supporters of the legislation have argued that providing insurance access to these businesses would mitigate safety risks and prevent the companies from being denied bank financing, which can occur when the businesses lack insurance coverage.
—
Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
—
Meanwhile, the Trump administration is moving forward with the process of rescheduling marijuana under federal law.
Attorney General Todd Blanche in April issued an order that immediately reclassified state-licensed medical cannabis, as well as marijuana products approved by the Food and Drug Administration (FDA) from Schedule I of the Controlled Substances Act (CSA) to Schedule III.
Under a separate order the attorney general signed, a hearing is considering more comprehensively moving marijuana to Schedule III.
Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.
