“Federal law should not prohibit access to insurance for employees of local businesses these states voted to support, nor should it prohibit employers from acquiring insurance that protects their stores,” said Senator Cramer. “This legislation takes a federalist approach by opening the insurance market to compliant businesses and preventing federal law from hindering employees' market access.”

The senators explained that cannabis businesses operating under state laws that have legalized recreational or medical marijuana are often denied access to the insurance market because insurance providers could be prosecuted or face penalties under federal law. Without access to insurance products such as property, casualty, and title insurance, businesses remain vulnerable, and employees, customers, and the community face safety risks. Businesses can also be denied bank financing if they do not have the proper insurance, according to the senators.

The CLAIM Act would:

• Prohibit penalizing or discouraging an insurer from providing coverage to a state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);

• Prohibit the termination or limitation of an insurer's policies solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business;

• Prohibit recommending, incentivizing, or encouraging an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance offered to a cannabis or cannabis-related business;

• Prohibit the federal government from taking any adverse or corrective supervisory action on a policy to an owner or operator of a cannabis-related business or real estate or equipment that is leased to a cannabis-related business, solely because the owner or operator is engaged with a cannabis or cannabis-related business; and

• Protect employees of an insurer from any liability solely for engaging in the business of insurance with a cannabis or cannabis-related business.

The National Cannabis Industry Association and the National Organization for the Reform of Marijuana Laws are supportive of the CLAIM Act.

At a Senate banking panel hearing in February, Senator Menendez, a senior member of the Senate Banking Committee, asked Federal Reserve Chair Jerome Powell about the fact that most banks cannot service legal marijuana businesses because the drug remains illegal on the federal level. Mr. Powell agreed with Senator Menendez that Congress should consider providing both financial institutions and insurance providers new clarity so that businesses can operate not only legally, but safely, and that local economies could benefit.