As with all things, when laws change the insurance industry is often slow to jump on board and recognize that legality. With business life insurance policies like key man and buy/sell life insurance this has rendered a huge growing industry, in the now legal marijuana business, unable to obtain life insurance that is often critical to the business growth.
With the huge expansion in pot growing and retail operations there are banks that are requiring life insurance for loan collateral, investors that want life insurance collateral, and partnerships that could be hung out to dry for lack of life insurance funded buy/sell agreements. Cannabis use for medicinal purposes is now legal in 28 states as well as Washington, D.C. Recreational use of marijuana is now legal in seven states as well as Washington, D.C., and after recent elections, several more states will soon be added to both of those lists. This lack of access to business life insurance is not a small isolated event, but a huge road block to business growth in the marijuana business.
Finding appropriate business insurance for the marijuana industry itself remains a substantial challenge. Millions of dollars are being raised all over the country by investors looking for big returns on start-up growing and distribution businesses, and those investors are wanting to hedge these opportunities in this brand new industry with life and disability insurance. Unfortunately, the traditional markets won’t yet entertain business insurance for pot businesses or personal insurance for those working in those businesses. However, the international markets seem to be more open to the prospect.
We have international life insurance and disability income underwriters who are willing to offer personal insurances on those working in or running cannabis companies, but they too have shied away from pure business coverage. There are a few underwriters in the greater London market that recognize a bigger picture and a legal, regulated and flourishing future for the marijuana industry in America. They are willing to write key person, loan and buy/sell insurance on the lives of the owners and operators of the multi-million dollar distribution companies and grow operations popping-up throughout the U.S.
Bottom line. This business hurdle can now be cleared and done so in a timely manner through the use of international resources for business life insurance here in the US. Just to put this in a context of what no traditional companies will do, I have several large business owners and CEO’s who are HIV+ and have been able to put the business insurance they needed in place to work with banks, investors and the SBA. If you have questions or would like to get quotes for your marijuana business life insurance needs, call or email me directly. My name is Ed Hinerman. Let’s talk.