Because cannabis is still classified as an illegal drug in many places, there are a lot of misunderstandings about the legality of the industry. But across North America and beyond, cannabis is a growing industry where loosening of regulations is continually opening up new markets. Here, GreenWrap Insurance Solutions highlights some of the common myths about cannabis.
Myth: All cannabis is illegal
This is false. First, let’s clarify what cannabis is, and the distinction between cannabis, marijuana, and hemp. The cannabis plant contains more than 100 chemical compounds, two of which are delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD). Cannabis plants that contain a THC concentration of more than 0.3% are classified as marijuana, and plants with less than 0.3% THC are classified as hemp. Unlike THC, CBD isn’t psychoactive and doesn’t have the same effects on a person, such as increased appetite or feeling high.
While marijuana possession and sale is still illegal at the federal level in the United States, hemp is not. Hemp products can be sold throughout the U.S. where states have allowed entry, and have become increasingly popular in recent years. You may have seen CBD oils, balms, and ingestibles for sale as the market for CBD products continues to grow.
Myth: Cannabis must be prescribed by a doctor
Not necessarily. In some states and countries, medical marijuana can be legally prescribed by a doctor to treat qualifying conditions such as HIV/AIDS, Alzheimer’s Disease, and PTSD. While more research is needed, studies have shown that cannabis can be used to reduce nausea, treat chronic pain, and help with anxiety and other mood disorders.
Some states allow recreational cannabis usage that does not require prior approval by a medical professional. CBD products – which do not contain more than 0.3% THC – can be purchased throughout the U.S. and beyond. It’s important to note that research into CBD benefits is in the very preliminary stages, so sellers of CBD products shouldn’t make medical claims about the health benefits of these products. Insurance carriers will always require COA, product lists, and examples of warning labels.
Myth: Cannabis businesses are not regulated
While CBD products are an emerging market, cannabis businesses are regulated similar to other businesses. In all states, businesses must have a license to grow or distribute cannabis plants. However, it is true that regulations about cannabis production and usage are in flux.
Hemp was only recently legalized in the U.S. through legislation included in the 2018 Farm Bill. Many states are still developing regulations around cannabis production and sales. Marijuana is still illegal at the federal level, but many states allow medical and/or recreational usage of cannabis. Regulatory guidelines and licensing requirements vary from state to state. As the industry grows, new legislation may change how these businesses are regulated.
Myth: No insurance is available for cannabis businesses
One final misconception is that cannabis businesses don’t qualify for insurance. But that’s not the case! At GreenWrap Insurance Solutions, our experienced team of insurance providers can help you debunk common myths about cannabis and understand which types of coverage can benefit your business. We offer customized insurance policies for businesses at each point of the value chain, from seed to sale. We work with clients throughout North America, Europe, the Caribbean, and parts of Latin America. For more information about insurance coverage for cannabis enterprises, contact us today.