California’s insurance commissioner is calling on insurance companies to provide coverage to cannabis firms in the state.
Commissioner Dave Jones’ efforts are notable given that insurance would be mandatory for cannabis businesses under proposed rules drafted by California regulators.
Jones is conducting a series of meetings with major insurance carriers in the state at which he is appealing to them to serve marijuana businesses, the Orange County Register reported.
Because insurance companies depend on federal licenses, most do not insure cannabis companies. Insurers fear that doing business with a firm that works in cannabis, which is federally illegal, could lead to penalties or even the loss of their federal licenses.
That could be a major problem for marijuana companies in California, where draft cannabis regulations include a provision requiring marijuana companies to carry insurance, including up to $1 million for vehicles used to transport cannabis between growers and retailers.
A May 22 meeting with insurance commission officials attracted 63 “insurance-related stakeholders,” according to a news release.
“My goal is to make sure all Californians, including emerging cannabis businesses, have insurance protection,” Jones said in the release.
California cannabis companies typically get their insurance from the “surplus line market,” which includes insurers that are not licensed but approved by the state to provide insurance, according to the Register.