Underwriting Marijuana

The marijuana industry is growing in record numbers while becoming legalized in many states at the same time. Entrepreneurs are hitting the jack pot in sales instantly within one year of opening. This is big business. As a matter of fact, this industry is a cash business. Entrepreneurs of the marijuana industry are still fighting regulated banks for a fair chance of business accounts and possible retirement accounts for their families. The word “Cannabis” is heart piercing to insurers on the health side and especially life side of insurance carriers to provide insurance needs for their marijuana businesses. This makes it a fight to even be taken on as suitable clients.

Yes, we do live in a world where the American dream is attainable, but it will take some time to bend and reverse engineer laws from the top levels of government to the municipal levels of government. Now, the hard part about underwriting marijuana users is that marijuana is still considered a drug. Underwriters lack data on the effects it has to the user. So it is also categorized as “High Risk” which increases the premiums for the client.

Underwriters play a vital role for the potential client. Still insuring the client but on smoker rates. This is a significant jump from preferred rates ($500 annually) to smokers rates ($1500 annually). Possibly making it hard for the client to leave generational wealth and to protect their income up to the IRS approved amount…

Moving forward, entrepreneurs should work with a broker with access to many companies with good underwriting relationships. Often time, brokers can position your situation in a way that will help you get the best rates!



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