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September 24, 2018
It is a long time concern of cannabis advocates that the Marijuana industry is not given a level playing field even after legalization. The stringent federal laws make it nearly impossible for cannabis business to flourish like any other commercial operation. From not able to use banking channels to failing in covering their operations by insurance, cannabis business operators face obstacles and setbacks at every turn.
Nevertheless, amid a slow pace, things are changing for the better. For instance, cannabis businesses in some legal states are now able to get insurance coverage. In California, the blanket legalization of cannabis has swayed several insurers to write coverage for the sector. In recent times, Golden Bear Insurance Co. has adopted lower insurance rates. They have also expanded their coverage options for several new sectors including legal cannabis operations. The state’s state insurance commissioner Dave Jones applauds Golden Bear Insurance for the initiative. Jones thinks it is a clear manifestation of the fact that insurance providers are willing to serve the nascent cannabis market.
Besides covering them as per regular insurance provisions, Golden Bear will also provide equipment-breakdown coverage to cannabis businesses. This means cannabis businesses can have the reimbursement for income or inventory losses caused by the failure of the machines used for the processing and preservation of cannabis. For instance, a cannabis venture will not have to bear total losses for a rotten product batch after a refrigeration failure if they are covered by equipment-breakdown coverage. This particular insurance coverage is expensive. However, it can potentially help businesses saving hundreds and thousands of dollars depending on their operational size.
Besides covering equipment breakdown, Golden Bear also offer plans for general liability, property coverage, and product insurance. It is worth mentioning that all the offered plans covered every facet of legal cannabis operations. Cannabis growers, processors, and retailers, all are eligible for insurance coverage by offered by Golden Bear.
According to Jones, the insurance commission has approved five other insurers for offering various kinds of coverage to cannabis businesses after Golden Bear forayed into the market. It is important to mention that state laws require cannabis businesses to get commercial general liability of minimum $2 million and a $5,000 surety bond addressed to the state.
Cannabis insurance and Canada
Canada is going to have blanket legalization of cannabis from the next month. Canadian cannabis businesses opening in that all-legal environment will require an insurance cover, which means there is a huge opportunity in the country for insurance companies from all over the world.
A renowned global insurance broker, Lloyd’s of London, has already announced to offer its services to Canadian-based cannabis businesses. Lloyd’s doesn’t provide direct coverage. Instead, they closely work with different syndicates that underwrite coverage and put them through with cannabis businesses.
As it is getting easier for cannabis businesses to acquire insurance cover, more businesses will be inclined to enter the sector. It is an economic 101 that affable and accommodating commercial conditions are essential for any sector to flourish.
Marijuana stays in the news, and Alice is always ready to keep us updated. A world traveler and lover of freedom, Alice knows what is going on, no matter where she roams. She specializes in marijuana legalization stories across the globe, with up to date... [read more]