Marijuana Laws: Life Insurance Lost For Legal Weed Business Activity

Have marijuana laws lost their battle because the legal weed business does not allow for those associated individuals to get various types of insurance such as life, health, business, or car insurance?

These days, it seems like most of states in America have legalized marijuana, allow for medical cannabis, or have relaxed their penalties for recreational possession.

In addition to the inevitability that the DEA will relax their rules on listing marijuana as a Schedule 1 drug on the same level as heroin and methamphetamine, according to Yahoo, celebrities like Zayn Malik and Wiz Khalifa talk openly about it as a “harmless” substance for adult recreational consumption.

Science is also backing up the beliefs of 58 percent of Americans that think marijuana is fairly harmless, especially when compared to alcohol, according to NBC.

In other words, it will not be very long before America legalizes marijuana, and the war on drugs can instead focus on substances like harder drugs.

Regardless, anyone associated with legalized marijuana might not be able to get business, life, car, or health insurance.

According to a July 8 report from the Chicago Tribune, a man lost his life insurance policy with the Mutual of Omaha because he is associated with the legal marijuana industry. Derek Peterson is the CEO of a legal marijuana business, Terra Tech, based in Irvine, California.

This can come as a surprise to many fans of the marijuana industry because it was big news with Forbes last year when they headlined with how “insurance companies are starting to notice” legal marijuana businesses and have offered them policies or coverage.

Adding to this, CBS reported in 2014 that legal marijuana businesses were looking for someone to cover them, and insurance companies responded.

Regardless, around June 2015, there were signs that perhaps the marijuana business, legal or not, was incompatible with Lloyd’s of London, and that is surprising since they are known to give insurance coverage with unique policies for hard-to-insure businesses.

What could make Lloyd’s of London cut ties with the legal marijuana business? According to Canna Law Blog, the following might be a reason that Lloyd’s of London might have stopped insuring legal marijuana businesses.

“Handling funds for marijuana businesses still doesn’t jibe with U.S. federal law, specifically anti-money laundering law. With nothing more than federal memoranda saying that cannabis businesses are of low enforcement priority, Lloyd’s has decided that it just can’t properly price the risk of its potential liability.”

Outside of business insurance, there are also other types of insurance that will not cover marijuana such as health insurance. Cheat Sheet writes on February 5 that the reason medical marijuana is not covered under prescription medicine plans is due to the following.

“Since marijuana is still illegal at the federal level, large companies who operate in multiple states don’t want to risk prosecution.”

Finally, car insurance can also be tricky when marijuana is a part of a person’s life. For example, on June 17 Quote Wizard writes that car insurance companies will cover people that get marijuana DUIs for medical cannabis or recreational use, but the premiums will increase for up to seven years.

Furthermore, it is easy to get a marijuana DUI because “the legal limit is 5 ng/ml, [and] there still isn’t a predictable level to prove that drivers are impaired… While they may be sober, their THC level could get them a DUI.”

However, there are also a lot of contradictions. For example, the National Underwriter Property and Casualty website stated in 2012 that marijuana does not result in bad drivers.

Unfortunately, the marijuana laws in America might need to catch up with a few things besides insurance because other aspects of the legal weed business are largely unfair. For example, Business Insider points out that legal marijuana businesses can be taxed up to 70 percent by the federal government.

As if being unable to get insurance is bad enough, legal marijuana facilities are also prohibited by law from opening bank accounts.

[Photo by Ben Margot/AP Images]