Medical Marijuana Insurance

Maine is one of 25 states that allows medical use of marijuana and looks likely that it will pass this autumn's ballot initiative for legalized recreational use.  Nationally, sales reached $5.4 billion in 2015 and are expected to hit $6.7 billion in sales for 2016.  Maine's sales were nearly $24 million in 2015.  With adult use legalization looming, sales are expected to explode in Maine as it will usher in marijuana tourism that is sure to attract a lot of out-of-staters and bring the state's black market into the fold. 

Where full legalization has gone into effect, the outcome has been deemed successful.  There has been virtually no negative unforeseen consequences and has raised a substantial amount of state revenues.  As for the medical sector, science continues to support marijuana's use for a myriad of medical complications.  All of this is helping normalize the public's perception of marijuana and its stigma is fading.  

One of the ongoing issues nationwide has been that, despite states' legalization efforts, marijuana possession is still illegal at the federal level.  Former Attorney General Eric Holder issued federal agencies not to enforce the law in states where marijuana has been legalized, but until it becomes law the situation remains precarious because that decision could be overturned with a single decree.  This has made banks weary of lending and doing business in this sector. Hence why transactions within the industry are mostly in cash.

Although technically insurance is part of the financial sector it is not constrained like banks are. Now that some form of legalization has been in place for years a number of insurance companies have had the time to look at risk data and have tailored products for growers, dispensaries, and others in the marijuana supply chain.  They offer everything from general liability to crop insurance.  For example, one insurance carrier we broker offers different coverages depending on crop maturity.  One can insure the crop at seeds, immature seedlings, vegetative plants, flowering plants, harvested plants, and finished stock.  

Without getting into the weeds about the ins and outs of insurance for the marijuana industry, what is important to know is that there is insurance out there for your business that covers everything regardless of the grey area the industry may be in due to federal regulations. Between growing equipment and the value of the marijuana itself, taking a loss would be catastrophic to an uninsured grower.  Make sure you are adequately covered.  There are lots of good options out there for you.