The cannabis industry is growing at a rapid rate. With the legalization of marijuana in many states, and with Canada’s recent decision to legalize cannabis for recreational use, the demand for weed insurance has grown exponentially.
Do you want to know how? I’m aware that marijuana will be legalized on a federal level shortly. Insurers are preparing. That’s correct! You’ll be able to obtain marijuana insurance for your crops, cannabis-related business endeavors, and much more one of these days.
There’s no disputing that cannabis is a multibillion-dollar industry. According to some estimations, the cannabis business may be worth $41 billion per year by 2026. Despite the cannabis industry’s annual profits, insurers only paid out around $250 million in coverage, and in many instances, they are charging much more than traditional merchants with strict restrictions.
Consumers may not care about this, but if insurers are given the opportunity to toy with the cannabis business, it may transform the industry in a matter of months.
Cannabis’ Schedule I classification, which places it in the most restricted category of the Controlled Substance Act, makes it very difficult to get coverage at the moment. This implies that any insurer that presently deals with a cannabis business is technically violating the law. This may put their whole business in jeopardy. This is why most large insurers offer coverage via proxies inside the state, but at a cost increase of 20 percent to 30 percent in certain cases.
What effect will this have on the end user?
The cannabis business is presently in political uncertainty. It isn’t legal in certain areas, but it is “relatively lawful” in others. This implies that operating a company in the cannabis market is very dangerous. Things are considerably more expensive, and many of those costs are passed on to the customer.
If insurers are allowed to enter the cannabis market, they will decrease risk and be able to compete for more affordable rates.
More security means more investment money, and if banking is factored in, it’s game over! After the business has been legitimized, capitalism will take care of the rest, driving costs down to a reasonable level and establishing a national “norm.”
Naturally, politicians will be engaged, and cannabis lobbyists will influence lawmakers in the same way that any other business does, but this is a positive thing. It indicates that cannabis has received complete legalization on all fronts.
According to a recent Reuter’s report, complete legalization will occur in 2022:
According to the BDSA, federal legalization is expected in 2022, and Petrilli of the NCRMA estimates that insurance sales to cannabis companies might reach more than $3 billion in the following five years if the sector were covered similarly to other enterprises.
[Gavin] Kogan [CEO of Grupo Flor, a licensed grower, distributor, and producer with five dispensaries in California] stated, “Whoever leads on offering competitively priced insurance for this business with the required coverage will be very, very successful.”
There are signs all over the place!
As someone who has covered cannabis-related topics for the last ten years, it’s fascinating to observe how attitudes about the plant have shifted. I began writing many years before Washington and Colorado made it legal.
The majority of the material I published at the time was based on anecdotal evidence of cannabis’ therapeutic ability. After experts looked into it, they discovered that many of the results were scientifically sound.
Despite this, there were few favorable allusions to cannabis or marijuana in the popular media. But fast forward to 2021, and Apple and Amazon are both on board with marijuana.
Various political groups are starting to propose pro-cannabis legislation, as well as a widespread contempt for anti-weed attitudes.
When you see how many diverse industries are rallying for legal cannabis, you have to question how much longer the government will be able to fight federal legalization.
What’s more, what are they waiting for?
The North American Cannabis Coalition is a non-profit organization dedicated to the legalization
There is a worldwide potential between Canada, the United States, and Mexico. The United States is the lone country that hasn’t joined the legal marijuana party.
Mexico is also trailing behind since it has merely invalidated a section of the constitution that bans adult cannabis use but has not eliminated the prohibition from the criminal code. This implies that legalization is likewise in question.
Analysts believe that by the end of the year, some “formal” regulations will be in place. Until then, Mexico is like the Wild West, with many players anxiously anticipating industry norms and regulations.
Nonetheless, if Mexico, the United States, and Canada all legalize cannabis, they have the potential to dominate global cannabis production. With Mexico’s inexpensive labor force, the United States’ massive consumer market, and Canada’s well-established pharmaceutical interests, we can easily see how this might affect the global cannabis scene.
We should anticipate other nations to legalize marijuana very soon once these three powerhouses enter the picture. Because the US, Mexico, and Canada would have violated the agreement at that time, the UN would most likely have to rethink parts of its drug policies.
At the end of the day, what the UN says is always a suggestion rather than a law. This, on the other hand, would send a signal to the rest of the globe. The United States is the most powerful player in the War on Drugs.
The debate will be reframed if the United States withdraws from a drug pact and legalizes a substance for profit. It would also raise questions about other substances like psilocybin, LSD, and other psychedelics, which have all been proven to be beneficial in medical settings.
We may conclude that there is something going on behind the scenes when insurers and big merchants support cannabis legislation. These multibillion-dollar companies spend a lot of money to lobbyists in order to predict what will happen in terms of legislative changes.