Insurance Business America 9.04

Page 32

SPECIAL REPORT BUSINESS STRATEGY

5-STAR CANNABIS INSURERS

5-STAR CANNABIS INSURERS:

High-grade providers EXPECTATIONS ARE running high in the US cannabis market. Despite the COVID-19 pandemic’s deleterious effect on many sectors of the economy, the legal cannabis industry boomed in 2020. It’s currently valued at $15 billion and is anticipated to grow to up to $37 billion by 2024, according

to Marijuana Business Daily. And all that new business will need insurance coverage. “We are quite bullish on the growth in this particular sector,” says John Donahue, president of M.J. Hall & Company, a surplus lines brokerage based in California. “This is the first emerging market to hit the insur-

WHAT’S MOST IMPORTANT TO BROKERS WHEN CHOOSING A CANNABIS INSURANCE POLICY?

Very important

Important

Neutral

Unimportant

Very unimportant

Policy coverage

Service to the broker

John Donahue, M.J. Hall & Company

Underwriting expertise

Ability to create bespoke policies

Claims payment/processing

Policy pricing

Access to risk mitigation partners

Online platform

0%

30

20%

“We are quite bullish on the growth in this particular sector. This is the first emerging market to hit the insurance space in a considerable amount of time”

40%

60%

80%

100%

ance space in a considerable amount of time. Many are and have been on the sidelines.” Of those insurers still hesitant to jump into the sector, many are concerned with legal complications and exposures due to differences in state and federal laws. But things are changing. Congress recently reintroduced the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, a bill to federally decriminalize cannabis, which was passed by the House late last year but failed in the Senate. And in March, a bipartisan group of senators introduced the Clarifying Law Around Insurance of Mari-

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