Marijuana insurance bill introduced in Senate
The CLAIMS Act was introduced in the Senate, while the House of Representatives saw the reintroduction of the SAFE Banking Act.
Sen. Bob Menendez (D-N.J.) has reintroduced the Clarity Law Around Insurance of Marijuana (CLAIM) Act, which, if passed, would help legal marijuana and related businesses access comprehensive and affordable insurance coverages including workers’ comp, property, casualty and title insurance.
The bill is co-sponsored by Sens. Rand Paul (R-Ky.), Jeff Merkley (D-Ore.) and Kevin Cramer (R-N.D.). Congresswoman Nydia M. Velazquez (D-N.Y.-07) plans to introduce companion legislation in the House of Representatives, according to a release from Sen. Menendez’s office.
“Current federal law prevents these small-business owners from getting insurance coverage, and without it, they can’t protect their property, employees or customers,” Sen. Menendez said in a release. “Our legislation simply levels the playing field for legal cannabis businesses, allowing them to fully operate just as any other legal small business would by permitting insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences.”
If passed, the legislation would protect employees of an insurer from any liability solely for engaging in the business of insurance with a cannabis or cannabis-related business.
Other provisions of the CLAIMS Act include:
- Penalizing or discouraging an insurer from providing coverage to a state-sanctioned and regulated cannabis business or an associated business (such as a cleaning service or landlord providing services to a legal cannabis business);
- The termination or limitation of an insurer’s policies solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business;
- Recommending, incentivizing, or encouraging an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance offered to a cannabis or cannabis-related business;
- The federal government from taking any adverse or corrective supervisory action on a policy to an owner or operator of a cannabis-related business or real estate or equipment that is leased to a cannabis-related business, solely because the owner or operator is engaged with a cannabis or cannabis-related business.
“The principles behind the CLAIM Act are simple: respect the voices of the states and their people and stop shutting out legitimate businesses from obtaining basic protections,” Sen. Paul said in a release. “The states are making their own decisions on these issues, and it’s time for the federal government to accept that.”
Second time is the charm?
A similar version of the CLAIMS act was introduced in previous sessions of Congress but failed to pass both chambers. However, the 2021 edition does update the legislation with some minor clarification as well as a few notable additions, according to Morgan Fox, media relations director for the National Cannabis Industry Association.
These additions include expanded definitions of protected services dealing with the transfer, transport and deposit of funds. The updated bill also calls for a diversity and inclusion study regarding marketplace barriers for potential or existing minority-owned and woman-owned legitimate businesses.
“It is tough to tell at this point how much momentum this bill will have in the coming weeks and months, but we are cautiously optimistic that it will be approved as a stand-alone,” Fox told PropertyCasualty360.com. “It is also possible this language could be included in other cannabis policy reform legislation down the road.”
SAFE Banking Act also reintroduced
In addition to the CLAIMS act, the Secure and Fair Enforcement (SAFE) Banking Act was reintroduced by Rep. Ed Perlmutter (D-Colo.). The SAFE Banking Act aims to provide protection from money laundering for proceeds from legitimate state-level marijuana businesses as well as help CBD and hemp companies access financial services. A previous version of the banking act passed in the House with bipartisan support but lost steam in the Senate.
While conservative members of Congress have traditionally rejected comprehensive cannabis reform, such as ending federal prohibition, many have been open to more incremental changes in the past, according to Fox. However, those tides might be turning.
“There are political considerations, as well. Given the red state victories for adult use and medical cannabis ballot initiatives in November and the growing number of polls showing increasing support for legalization among conservative voters, particularly in younger demographics, Republican lawmakers would be wise to reexamine their positions on cannabis issues and be aware of the potential political consequences of obstructing sensible reform efforts,” Fox said.
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