Cannabis Legalization and the Insurance Industry

By: Christy Thiems, American Property Casualty Insurance Association

This article discusses the impact of cannabis legalization on the insurance industry. Disparate state laws on both medical and recreational use, federal issues such as classification/scheduling of cannabis and the evolving nature of federal enforcement of drug laws, and the conflicting interplay between state and federal cannabis laws are discussed, as well as the coverage requirements for the cannabis industry’s legitimate and complex business needs and insurance-specific concerns raised by developments such as increased accident frequency and coverage mandates.

WORKERS’ COMPENSATION INSURANCE ISSUES, SUCH as coverage for medical cannabis in work-related injury and illness claims, treatment concerns, and cannabis in the workplace are included with a review of drug-testing and impairment issues in the workplace and elsewhere and the wide-ranging impact that barriers to research continue to have on the cannabis industry’s nascent insurance protections.

In 2018, nearly 1,000 cannabis-related bills were introduced into state legislatures across the country. By 2019, 23 states had considered recreational cannabis legislation and 15 states had considered medical cannabis bills. As of Q1 2021, 36 states and the District of Columbia had approved the broad medical use of cannabis and 15 states and the District of Columbia had legalized recreational cannabis use. The federal government continues to classify cannabis as an illicit drug. CLICK HERE TO READ THE FULL ARTICLE IF YOU ARE A PRACTICAL GUIDANCE SUBSCRIBER