High on Marijuana Insurance
By: Amy O’Connor (Insurance Journal) September 2014
Specialty brokers looking to get insurers hooked on emerging industry. The legal marijuana industry in the United States is experiencing tremendous growth.
Legal cannabis markets in the United States are expected to grow 700 percent over the next five years, according to an industry report titled, “The State of Legal Marijuana Markets 2nd Edition,” published by The ArcView Group.
The report values the U.S. legal marijuana market, which comprises all states that have active and open sales of cannabis to people legally allowed to possess it under state law, at $1.53 billion. The national market is projected to grow 68 percent to $2.57 billion by the end of 2014.
The five-year national market potential is $10.2 billion, according to ArcView. Gains will stem from increased demand in existing state markets, as well as from new state markets coming online within a five-year horizon.
As individual states try to determine where they stand on the legalization of medical and recreational marijuana use, insurers are also evaluating this segment and what coverages – if any – they are prepared to offer to the businesses selling and growing medical or recreational cannabis products.
Those who specialize in this class say agents and brokers shouldn’t be deterred by the stigma that goes along with it; instead they should learn about the segment’s needs so they can take advantage of growing business opportunities.
The legalization of marijuana for recreational use in both Colorado and Washington has led to a slew of new business ventures in both states. The Associated Press reported in December 2013 that the state of Washington received nearly 1,700 business applications between when the license application window opened on Nov. 13, 2013, and mid-December for those looking to grow, process or sell cannabis under the new recreational marijuana law.
ability? And what are the liabilities that other businesses have like theft, fire, business interruption, etc. They have unique issues and those need to be seen and be addressed,” he says. “They have a lot of investment dollars going into this industry and they are concerned about what happens to their investment dollars if they are shut down or don’t obey state regulations.”
Insurance coverage requirements can include and are not limited to: workers’ compensation, business interruption, theft, products liability, cargo insurance, BOP coverage, equipment breakdown, and cyber liability – particularly for those medical marijuana dispensaries that store patients’ personal information.
There is also opportunity for agents beyond the marijuana-related businesses themselves because they work with vendors that welcome the expertise an agent that specializes in the marijuana industry can offer, says Mike Aberle, vice president of sales and marketing for Next Wave Insurance Services, the program administrator for the marijuana-focused entity MMD Insurance.
“It is a brilliant marketing campaign. Most of these people also have businesses outside cannabis and they made money before this,” says Aberle. “The agent, by promoting that they do this segment, can also get other policies from those working with the [marijuana entity] but have nothing to do with cannabis except for how they work with the operations.”
Aberle says MMD’s core program started with indoor/outdoor cultivators and retailers and has since grown to cover the businesses that work with them like construction, security and supply companies.
Aberle is encouraged by the movement he’s seen from other carriers that haven’t written this class in the past, but for now they are mostly “window shopping.”
“They want to know about it because it sounds cool and the industry loves to talk about it and know more and that’s a great thing,” he says. “For us, it is has gone from ‘can we even mention we are writing it?’ to ‘we love telling everyone about it.’ The carriers still won’t write the business, but they love hearing about it.”
Categories
- Benefits Resources
- Bonding
- BOP
- Business Insurance
- Commercial Auto
- Commercial Property
- Company News
- Construction
- Crime Insurance
- Cyber Insurance
- Directors & Officers
- Employee Benefits
- Employment Practice Liability Insurance
- Entertainment
- General Liability
- Health Insurance
- Healthcare
- Healthcare Reform
- Homeowners Insurance
- Hospitality
- Manufacturing
- Medical Malpractice
- Mining & Energy
- Nightclubs
- Personal Auto
- Personal Insurance
- Professional
- Restaurants
- Retail & Wholesale
- Risk Management Resources
- Safety Topics
- SBA Bonds
- Security
- Seminars
- Technology
- Tourism
- Transportation
- Uncategorized
- Workers Compensation
Archives
- May 2021
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- November 2018
- September 2018
- August 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- February 2013
- November 2011
- October 2011
- September 2011
- July 2011
- June 2011
- March 2011
- November 2010
- October 2010
- September 2010
- April 2010
- February 2010
- November 2009
- October 2009
- November 2008
- August 2008