Every new business looking to manage risk must consider what insurance it needs to protect its assets. But state-legal cannabis businesses have been forced to manage risk without widely available and affordably-priced insurance to suit all of the operational demands. Due to federal illegality of cannabis, insurers (and brokers and reinsurers) have been reluctant to wade into an industry that remains federally illegal. But this means members of the insurance industry who see working with state-legal cannabis as a logical part of their business plans are left out of working with the industry. And it also means that cannabis businesses have to navigate their own risk management with often expensive and inadequate insurance due to lack of competition in the insurance marketplace.
Members of Congress have recognized that insurers need more certainty regarding the legality of working with state-legal cannabis businesses than can be provided by Department of Justice policies that have the potential to shift as agency leadership changes. Certainty that can only come by way of legislation is a must for many insurers. In addition to more widely reported efforts to legalize or decriminalize cannabis, two separate (and overlapping) bills have been introduced that, if passed and signed into law, would provide safe harbors for insurance industry. This article will briefly describe those bills and also highlight issues and open questions that will remain, even if those efforts succeed.