NJ Sen. Menendez Presents Cannabis Insurance Bill To Enable 'Burgeoning Industry To Thrive'

New Jersey Senator Bob Menendez confirmed Thursday the introduction of a bipartisan marijuana insurance bill.

This new piece of legislature — The Clarifying Law Around Insurance of Marijuana (CLAIM) Act of 2021 — proposes enabling insurance coverage for cannabis and related businesses.

Menendez, a senior member of the Senate Banking Committee, is also chairman of the subcommittee that supervises the insurance industry. The CLAIM bill is co-sponsored by Senators Rand Paul and Jeff Merkley.

Menendez and Paul also co-sponsored the SAFE Banking Act in 2019.

Currently, most of the state-approved cannabis companies are usually prevented from obtaining insurance services like worker’s compensation, property, casualty and title insurance because of federal law. Without insurance, companies can also be denied bank financing services.

The CLAIM Act Details:

• “Prohibit penalizing or discouraging an insurer from providing coverage to a state-sanctioned and regulated cannabis business, or an associated business

• Prohibit the termination or limitation of an insurer’s policies solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business;

• Protect employees of an insurer from any liability solely for engaging in the business of insurance with a cannabis or cannabis-related business.”

“The voters in New Jersey spoke loud and clear this November when they overwhelmingly approved of recreational marijuana use, the governor and state legislature have acted, and now it’s time for the federal government to take the shackles off of state-authorized cannabis businesses, allowing this burgeoning industry to thrive,” Menendez stated.

Without the appropriate insurance coverage, small companies are unable to protect their property, workers, and also customers, he explained.

“Our legislation simply levels the playing field for legal cannabis businesses, allowing them to fully operate just as any other legal small business would by permitting insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences,” Menendez added.

Senator Paul also praised the CLAIM Act fundamentals.

“Respect the voices of the states and their people and stop shutting out legitimate businesses from obtaining basic protections," Paul said. "The states are making their own decisions on these issues, and it’s time for the federal government to accept that.”