Insurance Advisory Group Finds Niche Supporting Cannabis Industry
The American Association of Insurance Services launched a state-backed program for cannabis businesses in California last year. Now the group is expanding to other states. First up? Colorado.
An industry group that focuses on insurance advisory concerns has proven something of a godsend to cannabis businesses that have faced trouble accessing traditional tools for supporting their businesses.
Since last year, the American Association of Insurance Services (AAIS), a member-governed group, has been running an insurance program called Cannabis Businessowners Policy (CannaBOP). It offers property and liability coverage for cannabis-centric businesses operating in California, which legalized possession and sale of marijuana relatively recently.
“The cannabis industry is expanding rapidly despite numerous obstacles and strict state-level regulations,” AAIS says in a fact sheet for the program. “One such obstacle is insurance.”
The group worked on the initiative with the support of state officials.
“This first-of-its-kind Cannabis Business Owners Policy or CannaBOP program will make it easier for more insurers to enter the market and fill coverage gaps for cannabis businesses,” stated then-California Insurance Commissioner Dave Jones in a news release when the program launched last year.
The program was specifically built with the needs of cannabis programs in mind, including the risks and conditions unique to California’s regulations. The program also focuses on being useful through digital means, with online form delivery and integration through existing administration systems. AAIS is continuing to improve the program and is offering flexibility to member companies, if they choose to take part, to further customize and develop CannaBOP’s programs.
Now, the insurance group is expanding its efforts to Colorado—another state that has seen success with legalization but where business has proven difficult to stick with because of regulatory challenges. That’s especially true with the banking industry, which initially did not know how to handle the dichotomy between state and federal law.
Daily Marijuana Observer notes that Colorado’s status “as the most experienced recreational market in the U.S.” makes it a “logical next step” for the program. According to the outlet, AAIS is looking to offer the service to every state and territory that has legalized cannabis in some form.
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