Rancho Cordova-based insurer launches medical marijuana coverage

A Rancho Cordova-based insurer Monday launched what it calls the first nationally available insurance coverage designed specifically for the medical marijuana industry.

Only 14 states allow use of medical marijuana today, but Statewide Insurance Services is nonetheless offering coverage in all 50 states.

"Given the growth in the industry, I think it's only a matter of time" before other states allow medical marijuana, said Mike Aberle, a commercial insurance agent with the local firm and national director of its Medical Marijuana Specialty Division.

He added: "Now that we can offer (services) in all 50 states, we can start the minute they go legal, without delay."

Aberle said the nationwide program covers "all aspects of the industry," including medical marijuana dispensaries (MMDs for short), workers' compensation, general liability, auto insurance (motor vehicles used to transport product), equipment breakdown/damage, property/product loss (including pot spoilage) and operations related to marijuana growing.

The door for dispensaries and commercial insurers opened in 1996, when California voters approved Proposition 215, which allows physicians to recommend cannabis for treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraines or "any other illness for which marijuana provides relief."

The number of dispensaries started to spike dramatically last year when the Obama administration said it would not arrest marijuana growers and sellers who abide by state laws. Previously, federal officials prosecuted them.

Some in the medical marijuana industry estimate there are now more than 2,000 dispensaries statewide.

Aberle began the process of forming Statewide's MMD unit in 2007. Since then, the Rancho Cordova company has provided insurance to clients in California, Colorado, New Mexico and Rhode Island.

Aberle said he started ramping up the national program last year.

He said premiums range from about $650 annually up to $25,000 a year, with numerous variables affecting price. Typical policies have annual premiums in the $1,000- to-$4,000 range.

Max Del Real, a lobbyist with California Capitol Solutions in Sacramento, characterized Statewide's national program as a milestone in an industry that needs insurance protections for everyone in the distribution chain, from growers of medical marijuana to those who use it.

"It's very big, especially right now with public safety. Safety protocols need to be put into place," he said.

Del Real has represented dispensaries and other segments of the medical marijuana industry throughout California, and he said growers remain the most unprotected group.

"How do we move out of residential areas and into commercial and industrial space?" he asked. "A lot of people are trying to get their minds around the cultivation of medical marijuana."

Del Real said governments throughout California have to decide numerous issues, such as whether they will require insurance for dispensaries.

"There is a big thing of catching up going on," he said. "Each community is passing its own laws, and that becomes problematic."

The growth of MMDs came so fast that some California cities – including Placerville and Los Angeles – have drafted ordinances and moratoriums to halt new openings.

http://www.sacbee.com/2010/03/02/2574961/rancho-cordova-based-insurer-launches.html