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Insurance To Cover Medical Marijuana Use Nationwide

March 3, 2010

On Monday, a Rancho Cordova-based insurer launched the first nationally available insurance coverage designed specifically for the medical marijuana industry, according to the Sacramento Bee.

Only 14 states currently allow the use of cannabis for medical purposes, but Statewide Insurance Services is offering coverage in all 50 states.

“Given the growth in the industry, I think it’s only a matter of time” before other states allow medical marijuana,  Mike Aberle, a commercial insurance agent with the local firm and national director of its Medical Marijuana Specialty Division, told the Bee.

He added: “Now that we can offer (services) in all 50 states, we can start the minute they go legal, without delay.”

Arberle said the program covers “all aspects of the industry,” including medical marijuana dispensaries (MDDs for short), workers’ compensation, general liability, auto insurance (motor vehicles that transport the product), equipment breakdown/damage, property/product loss (including pot spoilage) and operations related to marijuana growing.

California voters first opened the door for dispensaries and commercial insurers in 1996 when they approved Proposition 215, which allows physicians to recommend cannabis for treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraines or “any other illness for which marijuana provides relief.”

The Obama administration said last year that it would not arrest marijuana growers and sellers that abide by state laws.  Federal officials prosecuted them previously.

Some in the medical marijuana industry estimate that there are over 2,000 dispensaries statewide.

Aberle started the process of forming Statewide’s MMD unite in 2007.  It has provided insurance to clients in California, Colorado, New Mexico and Rhode Island since then.

Aberle said he started ramping up the national program last year.

He said premiums range from $650 annually up to $25,000 a year, with different variables affecting the price.  He said that a typical policy has annual premiums in the $1,000 to $4,000 range.

Max Del Real, a lobbyist with California Capitol Solutions in Sacramento, told teh Bee that Statewide’s national program is a milestone in an industry that needs insurance protections for everyone in the distribution chain, from growers of the product to those that use it.

“It’s very big, especially right now with public safety. Safety protocols need to be put into place,” he said.

Del Real said he represents dispensaries and other segments of the medical marijuana industry throughout California.  He said that growers remain the most unprotected group.

“How do we move out of residential areas and into commercial and industrial space?” he asked. “A lot of people are trying to get their minds around the cultivation of medical marijuana.”

Del Real said governments throughout California have decided numerous issues, like whether they will require insurance for dispensaries.
 
“There is a big thing of catching up going on,” he said. “Each community is passing its own laws, and that becomes problematic.”

The growth of MMDs has come so fast that some cities in California have drafted ordinances and moratoriums to halt new openings.

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