Carriers Cautious on Cannabis
According to a report in the Financial Times, Berkshire Hathaway Inc., Aon plc and other major insurers have begun offering coverage to American companies in the legal marijuana industry. Industry watchers say that many insurers are approaching the industry very cautiously and that the industry badly needs more widely available insurance coverage. An insurance broker based in Bermuda estimates that approximately $1 billion in annual premiums could be collected from the legal U.S. cannabis businesses if the industry was insured at the same level as other businesses.
Meanwhile, on December 3 federal and state regulatorsannounced that they would abandon a requirement that banks avoid involvement in the hemp business, a policy change that would allow hemp operations to be treated like any other bank customer. Marijuana has been legalized for medical use in 33 states and, as of January, 11 states will have allowed sales for recreational use. The movement has prompted federal lawmakers to set aside laws prohibiting hemp. Congress legalized hemp as a crop in 2018 and called on the Agriculture Department to begin regulating hemp production.