Velazquez Bill Would Help Cannabis Firms Secure Insurance
Washington, DC – Rep. Nydia M. Velázquez (D-NY) and Rep. Steve Stivers (R-OH) have introduced H.R. 4074, the Clarifying Law Around Insurance Marijuana (CLAIM) Act, which would help businesses operating in the rapidly growing cannabis sector to obtain insurance products.
"Due to discrepancies in federal and state law, insurers are understandably reluctant to provide coverage to legitimate, cannabis-based businesses," said Velázquez. "Without casualty, property and title insurance coverage, the growth of this industry will be impeded if not blocked entirely."
The CLAIM Act establishes a federal “safe harbor”, preventing federal criminal prosecution of insurers that transact with consumers and would prevent civil liability for agents, brokers and insurers that do business with the cannabis sector.
“Without this legislation, insurers will understandably be reticent to insure businesses operating in the cannabis sector,” Velázquez added. “This means a legal cannabis distributor whose product is ruined from a flood or fire could lose all their capital and their livelihood. This bipartisan bill corrects these problems and I’m proud to introduce it.”
In addition to the insurance provisions, the Velázquez measure would require a Government Accountability Office (GAO) study of hurdles facing women and minority entrepreneurs interested in entering the cannabis sector.
“For far too long, minority communities bore the brunt of our country’s backward marijuana policies,” Velázquez added. “As we normalize these products and this becomes a business, we must ensure minorities, women and other disadvantaged groups are able to enter this market and profit from this burgeoning industry.”
The CLAIM Act has been referred to the House Financial Services Committee, of which Velázquez is the third most senior member. Similar legislation has been introduced in the Senate.