More states across the country are implementing legislation allowing for the legal use of cannabis. Currently 23 States and the District of Columbia allow for medical use with four of the states and D.C. also allowing recreational use. The conflicts between state and federal law have left businesses uninsured and often without access to bank accounts.
In November of last year, California approved the first commercial insurer to offer a cannabis business insurance policy, and as of June 5, 2018, the California Department of Insurance has approved the policy itself.
The CannaBOP, developed by the American Association of Insurance Services (“AAIS”) covers dispensaries, storage facilities, processors, manufacturers, distributors, and other cannabis-related businesses operating in the State of California. The CannaBOP makes it easier for insurers to enter the marketplace and fill coverage gaps for cannabis businesses. The California specific Business Owners Policy has forms, rules, and rating information that is California specific. The CannaBOP program provides package insurance policies that contain both property and liability coverage for qualifying businesses.