| The Jencap Insurance Industry Outlook |
Preparing for the Future of Cannabis Insurance
The cannabis industry in the United States is (pun intended) blossoming. California paved the way for state-level legalization of medical cannabis in 1996, and a handful of other states followed several years behind. Sixteen years later, Washington and Colorado took things a step further by legalizing cannabis for recreational use. Now, as of spring 2023, 40 states and D.C. have some sort of legalized framework for cannabis products—either medical, recreational, or both.
Over the past few decades, public opinion and perception toward cannabis has shifted dramatically.
According to Pew Research Center, as of 2022, an overwhelming 88% of U.S. adults are in favor of legalization, with 30% in support of medical-only use and 59% in support of medical and recreational use.
Current cannabis sales reflect that positive sentiment: as a whole, the industry is on track to reach sales of $33.6 Billion by the end of 2023, and up to $56.9 Billion in 5 years’ time.
U.S. Public Opinion on Legalizing
Do you think the use of marijuana
should be made legal, or not?
Note: No answer responses not shown. 2019 data from Pew Research Center’s online American Trends Panel; prior data from telephone surveys. Data from 1969–1972 from Gallup; data from 1973–2008 from General Social Surveys.
Source: Survey of U.S. adults conducted
Sept. 3–15, 2019. PEW RESEARCH CENTER
Cannabis Remains Federally Illegal
Despite national approval and state-level support, cannabis remains federally illegal for production and sale. While this is the case, cannabis operations have limited access and options for banking, investor funding, credit card processing, tax relief, and insurance.
In a sense, the federal government has chosen to “look the other way” and allow individual states to manage and regulate their local cannabis industries on their own. As a result, each state has its own brand of cannabis regulation. Different states have different rules for businesses when it comes to how much cannabis they can sell, where and how they can dispense products, how they have to track and trace their products, and how much insurance they must carry to maintain their operating license.
It’s only a matter of time, however, until all this will change.
Federal Cannabis Reform is Inevitable
At some point in the future—whether that’s in three years, five years, or ten years, the federal government will make a move to change cannabis legislation. It’s anyone’s best guess for what that will look like. As insurance professionals, it’s imperative that we think through all possible scenarios and diligently prepare ourselves and our clients for what the future of cannabis may bring.
Journey with Us Down the Paths
of Three Possible Cannabis Futures
In each scenario, we’ll jump five years into the future and take a peek into what the world could look like and how that might impact cannabis operations and the cannabis insurance landscape.
Cannabis is Rescheduled to a Schedule II Drug
Get the Preparing for the Future of Cannabis Insurance White Paper.
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Jencap, Your Go-To Cannabis Insurance Partner
Whatever the future looks like for cannabis, the insurance industry will need to adapt and evolve alongside it. Partnering with a longstanding, specialized wholesaler like Jencap keeps you one step ahead and able to proactively meet your cannabis clients’ needs, even in a complex and ever-changing environment.
Managing a cannabis business is complex enough, but finding adequate insurance coverage shouldn’t be. With Jencap’s unmatched reputation and market clout, you’ll have access to a national network of non-admitted and A-rated cannabis carriers. You can rest easy knowing you’re working alongside experts who adeptly cut through the messy tangle of regulations and policy forms to find the coverage your clients need. Contact Jencap today to learn more.
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