Cannabis usage is one of those things that you no longer need to hide as it’s getting increasingly prominent. According to the NAIC, 38 states, have legalized Cannabis for either medical or recreational use. But conflicts still remain between state and federal regulations. Hence, the reason why business owners still need help securing insurance of any kind for their business.
When the state and federal cannot see eye to eye on things of this nature, it causes a bit of an issue in legalities. For example, cannabis business owners usually don’t have access to business banking. Since banks are federally operated and Cannabis is not federally legal, if banks do business with the Cannabis industry, they increase their risk of federal prosecution. Banking limitations are the reason why most businesses of this nature are cash-only. However, cash-only companies are never good in the eyes of an insurance carrier. It leads to a higher risk of theft and claims, which makes the carrier pay out more than what is currently paid into the policy premium. In addition, you also have the edibles, an infused Cannabis product. Yes, other companies sell food and have this same risk, but there is a little difference here. Not only do they have to worry about recalls, but they also run more risk of mislabeling and potentially misrepresenting the product and/or its effects. All of this leads to potential product liability claims. Lastly, you have the fact that the FDA has not approved Cannabis drugs, only CBD medication. So, what happens if you are a cannabis user?
Cannabis users have few more obstacles than non-cannabis users. They are not only more prone to legal issues, but they also have health insurance coverage limitations. When a worker’s compensation claim arises, and the employee is a cannabis user, they can potentially be subject to employment-disqualifying drug screening. If a cannabis user gets pulled over, the officer does not have a true way of knowing if someone is under the influence. Therefore, the person may need to take additional steps to protect themselves legally. Then there is the medical insurance side of it. Some health insurance carriers are known to restrict the use of Cannabis to none when treating patients. Any cannabis purchase is not covered by insurance, so you will typically pay for this out of pocket. However, certain facilities may be able to offer a small discount if you have a qualifying medical plan. So, what exactly does the future hold for us?
Unfortunately, there is never a way of knowing how the Cannabis industry will continue to change, but we can go by what we do know. On October 6, 2022, President Biden mentioned they would re-evaluate the Cannabis drug classification. As it stands, Cannabis is currently classified as a Schedule 1, which means “to have no currently accepted medical use in treatment in the United States.” Our Secretary of Health, Human Services and the Attorney General would be the ones to review this matter. We can only hope this is just the start for the Cannabis industry.
