“Current federal law prevents these small business owners from getting insurance coverage, and without it, they can’t protect their property, employees, or customers,” Menendez said in a statement released Tuesday. “We can solve this problem with legislation that allows insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences.”
New Jersey Sen. Robert Menendez (D) has introduced legislation to ensure cannabis businesses can access property, casualty, and title insurance. The Clarifying Law Around Insurance of Marijuana (CLAIM) Act, has bipartisan support in the Senate including Democrat Jeff Merkley (OR) and Republicans Rand Paul (KY) and Kevin Cramer (ND) as co-sponsors.
The bill would perform a similar function for the insurance industry as it relates to the cannabis industry as the SAFE Banking Act would for financial institutions – giving the sector explicit approval to serve cannabusinesses.
Cannabis businesses operating under state laws that have legalized recreational or medical marijuana are often denied access to the insurance market because insurance providers could be prosecuted or face penalties under federal law. Without access to insurance products such as property, casualty and title insurance, businesses remain vulnerable, and employees, customers, and the community face safety risks. Businesses can also be denied bank financing if they do not have the proper insurance.
The CLAIM Act would:
U.S. Senator Bob Menendez has introduced legislation that will allow legal cannabis businesses to access banking services.
Menendez’s proposal will help medicinal or recreational marijuana businesses legal under state laws to gain access to banking services. Under Menendez’s plan, cannabis-related companies can have bank accounts, accept credit cards and write checks – avoiding the need to operative with large amounts of cash.
The bill will also help local and state governments collect taxes.
- Asked about the Fed's thoughts on the cannabis space, Chair Jerome Powell says further regulatory guidance would be helpful.
- "I think it would be great to have clarity," Powell says. "It puts financial institutions in a very difficult place and puts the supervisors in a difficult place, too."
- Marijuana remains illegal on a federal level in the United States, but 10 states and the District of Columbia have allowed its use for recreational purposes.
Among the Democrats, the frontrunner is Tom Malinowski, a former assistant secretary of state under former President Barack Obama, who has received county Democratic party endorsements and has raised $1.2 million. Peter Jacob, a social worker who was the Democratic nominee in 2016 and lost to Lance, and attorney Goutam Jois are the other two candidates. Jacob and Jois are progressives who have criticized Malinowski for being too conservative. Malinowski, a Polish immigrant, has said he is the only candidate who can win in November.