WASHINGTON, D.C. – U.S. Senator Bob Menendez, a senior member of the Senate Banking Committee and Chairman of the Subcommittee that oversees the insurance industry, today announced the reintroduction of the bipartisan Clarifying Law Around Insurance of Marijuana (CLAIM) Act, which would ensure legal marijuana and related businesses have access to comprehensive and affordable insurance coverage. Joining the Senator in supporting this bill are Sens. Rand Paul (R-Ky.), Jon Tester (D-Mont.), Steve Daines (R-Mont.), and Jeff Merkley (D-Ore.).
In 2020, voters in New Jersey, Arizona, Montana, Mississippi and South Dakota approved of creating or expanding the legal use of marijuana. In 2021, New Jersey, which had legalized cannabis for medicinal purposes, enacted historic reform legislation legalizing and regulating adult recreational use. Currently, 38 states across the nation have marijuana legalization or decriminalization laws on the books.

“In 2020, the people of New Jersey made it clear they overwhelmingly approved of recreational marijuana use, the governor and state legislature have acted, and now it’s time for the federal government to eliminate barriers that currently keep state-authorized cannabis businesses from accessing affordable and comprehensive insurance coverage,” said Sen. Menendez. “Current federal law bars small business owners from accessing the tools available to them to thrive and protect their property, employees, and customers. Our legislation is simple and would finally level the playing field for legal cannabis businesses by allowing them to fully operate just as any other legal small business would: by permitting insurance companies to provide coverage to these enterprises without risking federal prosecution.”

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

“I’ll always fight to make it easier for Montana small businesses to flourish,” said Sen. Tester. “That’s why I’m teaming up with Republicans and Democrats on common-sense legislation that will ensure legally operated local businesses have access to comprehensive and affordable insurance coverage.”

“It’s important we provide guidance to insurers in states like Montana who are navigating the regulation of legalized cannabis,” said Sen. Daines. “Montanans have spoken; cannabis is legal in our state, and so are cannabis businesses. All legal businesses must have the access and ability to operate safely in our state and Montana service providers should have the clarity they need to serve our communities.”

“State legal cannabis businesses should not be shut out from the kind of tools and financial services all businesses require to thrive—including insurance to protect stores, customers, and workers from an unexpected emergency,” said Sen. Merkley. “Our SAFE Banking Act of 2023 includes provisions like the CLAIM Act, and I look forward to working to advance the CLAIM Act as we work to move cannabis banking legislation through committee and onto the floor.”

The CLAIM Act ensures businesses operating under state laws that have legalized recreational or medical marijuana have access to insurance products such as worker’s compensation, property, casualty, and title insurance. Under current federal law, these state-authorized cannabis businesses are often denied access to the insurance market leaving them vulnerable and risking the safety of employees, customers, and the community, while also putting their financial security and success at risk. These businesses can also face challenges in accessing bank financing if they do not have the proper insurance.
The CLAIM Act is supported by the American Land Title Association (ALTA), American Council of Life Insurers (ACLI), American Property Casualty Insurance Association (APCIA), Council of Insurance Agents & Brokers (CIAB), Independent Insurance Agents & Brokers of America (IIABA), National Association of Mutual Insurance Companies (NAMIC), National Association of Professional Insurance Agents (PIA), Reinsurance Association of America (RAA), and Wholesale & Specialty Insurance Association (WSIA).

“Cannabis and marijuana continue to be legalized in states across the country, but our federal drug laws haven’t caught up yet, and this causes significant challenges for the insurance industry,” said the National Association of Mutual Insurance Companies. “The CLAIM Act helps resolve these challenges and will allow these legal businesses to protect themselves financially and operate safely in communities across the country.”

“It is essential that state-legalized cannabis-related businesses and individuals have basic protections that insurance provides so they can safeguard their property, employees, and customers,” said Frank Nutter, President of the Reinsurance Association of America. “We thank Senators Menendez, Paul, Tester, Daines, and Merkley and Representatives Velázquez and Davidson, for their leadership on the CLAIM Act, and we look forward to working with them to achieve enactment of this important legislation.”

The CLAIM Act would:
  1. Prohibit penalizing or discouraging an insurer from providing coverage to a state-sanctioned and regulated cannabis business, or an associated business (such as a cleaning service or landlord providing services to a legal cannabis business);
  2. 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;
  3. Prohibit recommending, incentivizing, or encouraging an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance offered to a cannabis or cannabis-related business;
  4. Prohibit the federal government from taking any adverse or corrective supervisory action on a policy to an owner or operator of a cannabis-related business or real estate or equipment that is leased to a cannabis-related business, solely because the owner or operator is engaged with a cannabis or cannabis-related business; and
  5. Protect employees of an insurer from any liability solely for engaging in the business of insurance with a cannabis or cannabis-related business.
Sens. Menendez, Paul, and Tester support the Secure and Fair Enforcement (SAFE) Banking Act of 2023, introduced by Sens. Merkley and Daines last month, to ensure that legal marijuana businesses can access banking services, such as lines of credit, savings and checking accounts, processing customers’ credit cards and employee payrolls.
U.S. Representatives Nydia Velázquez (D-N.Y.-07) and Warren Davidson (R-Ohio-08) introduced the House version of the CLAIM Act.
Find a copy of the bill text HERE.