Weed Insurance – Yeah, It’s Gonna Be a Very Big Deal!

Want to know how I know that weed will soon be legalized at the federal level?

The insurers are getting ready.

Correctly! Someday, you’ll be able to get weed insurance for your plants, cannabis-related businesses, and more.

There’s no denying that cannabis is BIG business. Some estimates suggest that the cannabis industry could reach $ 41 billion annually by 2026.

Despite the cannabis industry’s annual revenue, insurers have only written about 250 million in policies and, in many cases, charge far more than typical retailers with extreme limits.

This may not be of significant concern to consumers, but if insurers are given the chance to play with the cannabis industry, it could revolutionize the industry in a matter of months.

Right now it’s incredibly difficult to get coverage because of the “Schedule I” status of cannabis, which puts it in the most restrictive category of the Controlled Substance Act.

This means that an insurer currently working with a cannabis company would be technically breaking federal law. This could endanger your entire operation.

For this reason, most major insurers use proxies within the state to provide coverage – sometimes with a 20-30% increase in costs.

How does this affect the end user?

The cannabis industry is currently in a political limbo. It’s not legal, but at the same time it’s “kind of legal” in some places.

This means that doing business in the cannabis industry is VERY risky. Things cost a lot more and a lot of that expense is outsourced to the consumer.

If insurers can get into the cannabis game, they reduce the risk and could compete with each other to offer more accessible tariffs.

With more security comes more investment capital and as soon as banking transactions come into play, it’s checkmate!

When industry is legitimized, good old capitalism will do the rest to bring prices down to a fair price and establish a national “norm”.

Of course – politicians will be involved and cannabis lobbyists will influence politicians like any other industry – but that’s a “good” thing. It means that cannabis is fully legitimized at all levels.

A recent Reuter article estimates that full legalization will come sometime in 2022;

“BDSA expects some form of federal legalization in 2022, and NCRMA’s Petrilli said this could bring insurance sales to cannabis companies to more than $ 3 billion over the next five years if the industry were insured like regular companies.”

“Anyone who manages to offer this industry cheap insurance with the necessary insurance protection will be very, very successful,” said Kogan.

The signs are everywhere!

As someone who has been writing on cannabis-related topics for about 10 years, it’s interesting to see how the general climate has shifted towards the plant. I started writing a few years before Washington and Colorado legalization.

Most of the content I wrote at the time concerned anecdotal evidence about the healing potential of cannabis. It turned out – after scientists examined it – that many of the results were backed by science.

Even so, there hasn’t been much positive evidence of cannabis or marijuana in the mainstream. But fast-forward to 2021 and you’ve got Apple and Amazon on board with cannabis.

We see different factions of politicians begin to propose pro-cannabis legislation and general disdain for the anti-weed sentiment.

When you see all of the different sectors advocating for legal cannabis, the only question you can ask is how long the government can resist state legalization.

More importantly … what are you waiting for?

The North American Cannabis Coalition

There is global potential between Canada, the USA and Mexico. The only player who has not officially joined the legal weed party is the United States.

Mexico is also lagging behind, as it only overruled part of the constitution that bans adult cannabis use but not removed it from the penal code – legalization is also in a legal limbo.

Analysts hope that by the end of the year there may be some “formal” rules on the table. Until then, Mexico is a bit like the Wild West with many participants eagerly awaiting industry standards and laws.

Nonetheless, once Mexico, the United States, and Canada have cannabis legality in place, they have the potential to rule the globe in cannabis production. Mexico with its cheap labor, the US with its huge consumer market, and Canada with its already firmly entrenched strong pharmaceutical interests – we can easily imagine how that would affect the global cannabis scene.

Once these three powerhouses come into play, we can expect other countries to legalize pretty quickly thereafter. The United Nations would probably have to rewrite part of its drug policy, since the US and Mexico and Canada would have broken the agreement at that point.

Ultimately, what the United Nations say is always a recommendation, not a law. However, this would send a message to the rest of the world. The US is the most important factor influencing the War on Drugs.

If the US got out of a drug deal and legalized a drug for profit – this will reshape the conversation. Additionally, it would open a number of questions regarding other drugs like psilocybin, LSD, and other psychedelics – all of which have shown benefit in a medical context.

The sticky end result

With insurers and large retailers backing cannabis policies, we can conclude that something is going on behind the scenes. These mega-corporations pay lobbyists a lot of money to know what will happen in terms of political change.

If you prepare for it – it’s safe to say that cannabis will come mainstream and stay here!

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