The same federal ban on marijuana that prevents legal cannabis businesses from opening checking accounts or taking credit cards also stops them from buying insurance.
That’s what U.S. Sen. Robert Menendez is taking aim at. He introduced legislation Monday to allow such businesses to get property, casualty and title insurance.
“With New Jersey just expanding their medical marijuana program, and other states across the country legalizing recreational and medical cannabis, we must ensure these businesses can fully operate just as any other legal small business would,” said Menendez, D-N.J.
“Current federal law prevents these small business owners from getting insurance coverage, and without it, they can’t protect their property, employees, or customers. We can solve this problem with legislation that allows insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences.”
The bill, co-sponsored by U.S. Sens. Rand Paul, R-Ky.; Jeff Merkley, D-Ore., and Kevin Cramer, R-N.D., was introduced the day before the Senate Banking Committee holds its first-ever hearing on the Secure and Fair Enforcement Act, or SAFE Act.
All four senators also are co-sponsors of the banking bill, which would allow federally-regulated banks can’t provide services such as credit cards or checking or savings accounts to dispensaries and other cannabis-related enterprises.
Menendez’s insurance legislation, known as the Clarifying Law Around Insurance of Marijuana Act, or CLAIM Act, is designed to allow insurers to provide coverage to legal cannabis businesses in states that have legalized the drug for personal or medical use.
The federal government couldn’t block insurers from offering policies to those businesses in states where they are operating legally
It also would prevent insurance companies from dropping coverage of those who do business with marijuana companies, such as a landlord renting space to a dispensary.
Gov. Phil Murphy endorsed the legislation, noting that he recently signed legislation expanding medical marijuana in New Jersey.
“It is our responsibility to make sure that businesses associated with this life-changing medical treatment are treated similarly to other medical services providers," Murphy said.