The legalization of medical and recreational marijuana continues to expand across the United States, creating incredible new opportunities for not only cannabis retailers, growers, and manufacturers, but also for existing businesses looking to expand from medical into the recreational space.
As we look toward 2020, the marijuana industry is poised to have its biggest year yet, with Midwest states like Illinois, Michigan, and Missouri being an integral part of overall growth.
Michigan Scrambles to Approve Recreational Marijuana Business Licenses
Since Michigan legalized recreational marijuana in 2018 by ballot measure, the state has been scrambling to adopt regulations and licensing requirements for cannabis-related businesses. The initial licensing process that was developed was confusing, and was eventually scrapped by the governor who tasked the Michigan Regulatory Agency with adopting emergency rules.
The process has since been streamlined, and license applications for cannabis provisioning centers, consumption establishments, growers, and events will be available starting November 1. Applicants must provide proof of insurance with their application, whether they are applying for a medicinal or adult use license. Michigan is also exploring clemency provisions for those negatively impacted by the criminalization of marijuana.
Recreational Marijuana Becomes Legal in Illinois on January 1, 2020
With the Cannabis Regulation and Tax Act of 2019 voted into law this past June, Illinois becomes the 11th state to legalize recreational marijuana, effective January 1, 2020. Currently, there are 55 active medical marijuana dispensaries in business throughout the state, which will be given first priority for recreational marijuana retail licenses.
For wave one, the state expects to issue up to 75 recreational dispensary licenses by May of 2020, followed by 40 cultivation/craft grow, 40 processing and transportation licenses by July of 2020. Wave two will see an additional 110 dispensary, 60 cultivation/craft grow and 60 processing licenses by the end of 2021. It is expected this will create 23,000 new jobs and eventually bring in $2 billion in annual revenue. With that many new licenses and operators, procuring liability insurance with a knowledgeable carrier partner able to help navigate local, state and federal regulations will be critical.
Similar to Michigan, Illinois municipalities must opt-in to allow licensing of recreational marijuana-related businesses. This could complicate the licensing process and obtaining liability insurance. If a license is awarded in a municipality that fails to opt-in to the recreational law, currently the license cannot be transferred to a more cannabis-friendly jurisdiction in the state. We’re anticipating the Governor’s office will respond with a solution if this becomes a broader issue as licenses are awarded.
Medical Marijuana is Coming to Missouri
While Missouri is not as progressive as its northern neighbors, medical marijuana was legalized in the state through a ballot measure in 2018. Since then, the state has been encouraging businesses to apply for medical marijuana operator licenses, and Missouri saw a rush of applications prior to its extended August deadline.
Over 300 licenses for various operations were part of the first wave, which included 192 licenses for dispensaries. That number is expected to grow over the next several years.
As part of the application, businesses needed to show that insurance was available and that they were insurable. Admiral Insurance, of course, has stepped up, providing hundreds of general liability indications and quotes to our wholesale brokers for medical marijuana dispensaries, growers and other cannabis-related businesses.
The Marijuana Industry: 2020 and Beyond
Looking past the Midwest, Vermont is anticipated to be the next state where recreational marijuana is available for sale, starting in 2021. Although the state legalized marijuana in 2016, it has been slow to allow commercial distribution. Washington and Oregon are also looking at changing some of their marijuana laws and regulations, which could have some impact on licensing and insurance liability, but could mostly affect residential cultivation operations.
Medical and recreational marijuana initiatives may also appear on the ballot in many states in 2020. Ballot measures have either been approved or are being circulated to legalize medical marijuana in Idaho, Mississippi, Nebraska and South Dakota, and to legalize recreational marijuana in Arizona, Arkansas, Florida, New Jersey, and North Dakota.
Assessing Cannabis Product Liability Risk
Having quality liability insurance coverage is essential for businesses in the cannabis industry. As experts in this space, Admiral Insurance Group routinely assesses the risk of dispensaries, growers and other marijuana-related businesses to create customized insurance policies based on the individual needs of business owners. Admiral operates in all legal states, providing high limits, broad coverage enhancements, and unparalleled service as a true partner in marijuana liability insurance.
Learn More about Cannabis Insurance
Admiral Insurance Group is a leading underwriter of product liability insurance for businesses in the cannabis industry. Learn more about Admiral's cannabis insurance solutions.
If you are a wholesale broker in need of an insurance partner with deep expertise in the cannabis industry, contact us about becoming an appointed broker. If you are a retail insurance broker with clients such as marijuana dispensaries, cannabis product manufacturers or marijuana growers, we encourage you to connect with one of our wholesale partners.
Products and services described above are provided through various surplus lines insurance company subsidiaries of W. R. Berkley Corporation and offered through licensed surplus lines brokers. Not all products and services may be available in all jurisdictions, and the coverage provided by any insurer is subject to the actual terms and conditions of the policies issued. Surplus lines insurance carriers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.