Legalized marijuana is riding high – figuratively and literally. While Colorado and Washington are currently the only two states that have legalized its recreational use, more and more states are legalizing it at least for medical reasons.
Medical marijuana is now legal in two Midwestern states – Michigan and Minnesota. But that list may grow. This past year there were initiatives in several other Midwestern and Plains states to legalize marijuana. They were: Iowa, Nebraska, Indiana, Kansas, Missouri, and Ohio.
The status of property and casualty insurance for companies engaged in medical marijuana production and distribution is hazy. Recently Lloyds of London announced they were exiting the marijuana business until it became legal at the federal level. This has created opportunities for some companies like Ohio’s Cannasure, a pot insurance wholesaler, and consternation for marijuana businesses which will need to find new carriers.
“I don’t think premiums will increase because of Lloyd’s exit,” said Patrick McManamon, founder and managing director of Cannasure. “There are domestic and international companies that are moving into this space that will help to stabilize the market. There will be additional coverage options as we move forward.”
And Gerry Finley, SVP for casualty underwriting at Munich Reinsurance America, sounded this same theme. He was quoted as saying that insurers “have indicated a willingness to provide a broad array of property and casualty coverages to those in the marijuana business, albeit with robust pricing.”
