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Understanding Why Cannabis Insurance Is Hard To Come By

Finding dispensary insurance, cannabis product liability coverage, marijuana crop insurance and other forms of coverage for cannabis is challenging due to the Schedule I status of marijuana on the federal level. Finding cannabis insurance specialists is also challenging because the industry is so new and insurance professionals are all still learning. That does not mean though that some insurance agents have not spent more time understanding the unique financial risks associated with being a part of the cannabis industry than others.

Insurance for marijuana dispensaries and processors can be difficult to find.

The banking restrictions may be one of the largest hurdles preventing larger insurance carriers from offering marijuana related insurance policies. The banking system is essential for most insurance companies and the fear of being accused of infractions such as money laundering by working with companies that touch the cannabis plant stops the large players from taking the risk.

“The whole conversation of cannabis crosses the desks of the most senior leaders of the insurance community as they determine whether or not they want to play in this game,” said Tom Fitzgerald, global broking officer at insurance broker Aon Plc. “There’s not every insurance company in the world anxious to write this stuff, at least not yet.”

“Just a few handful of carriers” will write policies for cannabis-related firms, said James Nelson, a retail insurance broker and owner of New Growth Insurance in Alameda, California.

Hartford, based in the Connecticut city of the same name, said it’s abstaining from the industry, and “that is unlikely to change” while the federal ban is in place.

“We do not underwrite any business that sells, grows, transports or distributes marijuana or products derived from marijuana cannabinoids,” the company said in an emailed statement.

There are all sorts for cannabis coverage alternatives for dispensaries, medical marijuana doctors, cannabis product liability insurance and much more. It has not been very easy for companies working with marijuana to find answers on how to cover their financial risks.

While other insurance companies may be too nervous to offer coverage to marijuana companies, S2S Insurance Specialists has embraced the burgeoning cannabis industry. Get in touch with Eric Rahn or David Rahn to discover the best marijuana insurance alternatives available to your company.

Read more at Bloomberg.com

American Banks Missing Out On Legal Cannabis In Canada

S2S Insurance, cannabis insurance, contact Eric Rahn today, marijuana liability insurance, cannabis bankingThere are articles and news reports across the internet that recognize the money making potential in the legal cannabis industry. In the US, in states that have legalized marijuana in some form, people have invested heavily in the industry banking on big returns. People working in the trenches of the industry are starting to see early returns on their investments and they have the cash to prove it. While it is good to be rolling in dough, it is not ideal, and leads to some serious problems.

Most banks, large and small are not willing to extend their services to cannabis related businesses because of the plants status with the US government. Cannabis is listed as a Schedule 1 controlled substance in the Controlled Substance Act. As long as this federal law lists the drug as a Schedule 1 controlled substance, the financial industry will face significant challenges all the way from banking to merchant services by risking running afoul of federal law if they work with weed related businesses. The problem is not limited to the United States, it is impacting Canada as the entire country has legalized the use and sale of the drug.

Even though Canada legalized recreational marijuana and opened the door to a flurry of business activity, big banks in the United States and Canada are keeping the industry at arm’s length because of pot’s muddy legal picture in the United States.

Cannabis, while legal for recreational use in nine US states, and Washington D.C., remains illegal under US federal law. American banks have largely stayed away from providing services to the industry because federal regulations prohibit lenders from working with any business that deals in illegal drugs. Lenders could face money laundering charges in the United States if they do.

But banks could be missing out on a bonanza. The marijuana industry is expected to grow substantially in the next five years, with sales in the United States expected to hit $23.4 billion by 2022, according to cannabis market research group Arcview. Canadian sales are expected to hit $5.5 billion.

cannabis insurance specialists, s2s insurance specialists, legal cannabis, dispensary insurance, marijuana insuranceStill, most of the largest banks remain on the sidelines for now — even in Canada, where banks have to worry about potential compliance issues abroad. The American Bankers Association, the US industry’s powerful lobby, has said it wants Congress to resolve the conflict between federal and state laws so banks aren’t stuck in the middle, though it doesn’t have a position on legalization itself. Right now, banks that do decide to take a chance and quietly work with marijuana businesses are expected to file suspicious activity reports for every transaction related to those accounts — a huge and potentially expensive logistical headache. TD Bank (TD), the Royal Bank of Canada and Bank of Montreal (BMO), all of which have an international presence, declined to comment for this story.

As long as cannabis is considered a Schedule 1 controlled substance there will be an inherent risk to working in the cannabis industry. Not only are there legal risks, but because normal financial services are not available, you’ll  be dealing in cash which posses it’s own set of problems. Your business could be targeted for theft and robbery, which may come with property damage and more. If you are considering or already involved in a cannabis related business, you need a risk management strategy. Reach out to S2S Insurance Specialists and talk with Eric Rahn about your business and risk management strategies.

read more at cnn.com