Cannabis Safe Harbor

Create Cannabis Safe Harbor for Agents

PIA supports legislation to protect independent agents, brokers, and carriers from federal criminal liability for engaging in the business of insurance with cannabis-related enterprises in states that have legalized cannabis. 

Nearly every state has legalized the use of marijuana to some degree. Unfortunately, the insurance industry remains potentially exposed to civil and criminal liability arising from the disparate legal status of cannabis at the federal and state levels. To do their jobs effectively, independent insurance agents should be protected from prosecution by a comprehensive federal safe harbor for agents, brokers, and insurers that engage in the business of insurance with cannabis-related enterprises in states where cannabis is legal.

PIA respects state insurance laws and seeks to protect independent agents from federal criminal prosecution for engaging in legitimate business activities.

In 2019, PIA helped develop the Clarifying Law Around Insurance of Marijuana (CLAIM) Act to address the needs of independent agents selling insurance to cannabis-related entities. The CLAIM Act, which was reintroduced in the 117th Congress by Rep. Nydia Velazquez (D-NY) and Senator Bob Menendez (D-NJ), provides protections for agents, brokers, and carriers to conduct business with cannabis-related entities in states in which those entities are legal.

In September 2019, key parts of the CLAIM Act were merged with the Secure And Fair Enforcement (SAFE) Banking Act, which was meant to similarly shield bankers from legal jeopardy for their role in providing banking and financial services to cannabis-related businesses. The essential agent protections of the CLAIM Act were folded into the SAFE Banking Act, which enjoyed broad bipartisan support.

In 2021, the SAFE Banking Act (H.R. 1996/S. 910) was reintroduced by Rep. Ed Perlmutter (D- CO) and sponsored by Reps. Nydia M. Velázquez (D-NY), Steve Stivers (R-OH), and Warren Davidson (R-OH), and Senators Jeff Merkley (D-OR) and Steve Daines (R-MT). As introduced, the SAFE Banking Act includes several key insurance protections from the CLAIM Act. The SAFE Banking Act would prevent federal criminal liability for agents, brokers, and insurers engaged in the business of insurance with cannabis-related businesses in states that have legalized cannabis in some form.

The SAFE Banking Act would also make it easier for banks to offer financial services to businesses in the cannabis industry.

The House has passed the SAFE Banking Act four times this Congress alone: as a standalone measure; as an amendment to the 2021 National Defense Authorization Act (NDAA); as part of the America COMPETES Act; and most recently as part of the 2022 NDAA. Unfortunately, key Senate opposition to SAFE Banking has prevented it from passing in the upper chamber.

PIA is making the passage of the SAFE Banking Act one of its top priorities this Congress.

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