New Dawn Risk has today launched its latest white paper on insurance for the US legal cannabis, CBD and hemp markets. The 2021 report is called “Opportunity knocks at last in the US cannabis insurance market”.
Download the white paper here.
Since the publication of the previous report in 2020, US sales of medical and recreational cannabis have grown exponentially, reaching $17.5 billion in 2020, a 46 percent increase from 2019. In addition, the legislative landscape in the USA has been transformed by the arrival of the pro-cannabis Biden presidency, supported by a Democratic majority in both Houses.
A new CLAIM (Clarifying Law Around Insurance of Marijuana) Act has been introduced to the Senate, alongside the parallel SAFE Banking Act, and both are expected to pass into law by the end of 2021. This will at last permit insurers to work with the cannabis industry legally; and will also reduce some of the insurance risks that previously dogged the industry. For example, D&O cover will become a legally available option, and marijuana businesses will be able to regularise their banking and cash operations.
The updated white paper examines the key drivers of growth whilst exposing both the potential premiums and the size of the insurance gap for the cannabis industry in the US. Headlines include:
- 36 US states, and Washington D.C., have now legalised cannabis for medical or recreational use.
- Americans now spend almost as much on legal marijuana products as they do on Coca Cola.
- Cannabis dispensaries were deemed “essential businesses” by many states and therefore remained open during lockdown.
Max Carter, CEO of New Dawn Risk, commented: “The legal and regulatory environment of the cannabis industry has transformed over the past year.
“The changing attitude towards the cannabis industry, and new State and Federal legislation present an exciting opportunity for insurers to work with growers and sellers. With legalisation of banking and insurance, the door seems likely to open to what could be a $1bn premium market.
“On the consumer side, cannabis was deemed an “essential business” during the Covid-19 pandemic, and the growth of the sector seems inexorable. New Dawn Risk is committed to working with carriers and clients to share knowledge and insights to help identify and deliver cover for this untapped market.”
Notes to Editors
Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.