Offering Cannabis Insurance may not be Worth the Risk
Managing General Agent Risk Placement Services, Inc (“RPS”) has announced their departure from offering insurance to the cannabis industry as a result of Attorney General Jeff Sessions recent roll back of the Cole Memorandum paving the opportunity to enforce federal cannabis laws. RPS’ program was a sleeping giant launched recently in Colorado and established in Nevada that offered a comprehensive program with reasonable policy forms. They partnered with United Specialty Insurance to offer general liability, product liability, and a variety of property coverages. The local Colorado office was enthusiastic to be offering such a competitive program to the industry.
RPS’ decision is not unique as Evanston Insurance Company took similar action to exit out of the medical cannabis industry shortly after the Jeff Sessions announcement. Their timing may have been either positively or negatively influenced by the amount of potential business they could have reaped in California. If they had stayed committed to their program, the amount of business from California would have been significant.
While no specific examples of federal enforcement are evident by the change in position with the current administration, the impact is leaving many insurance executives asking if the risk of insuring pot is worth it. This news come on the heels of Cannasure aligning themselves with Topa Insurance Company to begin offering their own cannabis insurance program.
— Greenpoint Insurance (@GreenpointInsur) February 11, 2018