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California Insurance Commissioner Dave Jones is continuing to urge insurers to cover the state’s cannabis industry amid reports that President Donald Trump’s administration will not crack down on states allowing the use of marijuana.
More than 24 surplus lines insurers and the first admitted insurer are now offering insurance for various risks faced by the cannabis businesses in California, the department said in a statement Tuesday.
Mr. Jones sent a letter to the insurance industry last week after Sen. Cory Gardner, R-Colorado, released a statement saying that the Trump administration has committed to respect the rights of Colorado and other states to allow for the legal use of marijuana. Mr. Gardner sought the commitment after Attorney General Jeff Sessions rescinded the Cole Memorandum, an Obama-era policy that took a “hands-off” approach to enforcing federal laws prohibiting marijuana use.
Since California voters legalized adult recreational use of cannabis in November 2016, Mr. Jones has encouraged insurers to offer insurance products to the cannabis industry.
“We work with the insurance industry to promote a healthy insurance market that offers insurance products to meet the ever-changing needs of Californians and California businesses,” the commissioner said in the letter. “This includes making insurance available to the state licensed legal cannabis businesses in California. Even prior to the most recent decision by President Trump, there have been no reported instances of federal prosecution of a cannabis business lawfully operating in a state that legalized cannabis. The recent decision by President Trump should reduce further the risk of federal prosecution of legal cannabis businesses and the insurers that provide them insurance. The Department of Insurance will process cannabis rate filings expeditiously and will not object to proposed rates that have a rational basis.”
The cannabis industry currently has revenues of $9 billion and is projected to grow to $60 billion by 2027, according to the commissioner.
California has approved the state’s first surety bond program for the cannabis industry, according to a statement Wednesday from the office of State Insurance Commissioner Dave Jones.