Marijuana Is Creating ‘Headaches’ for People in Legal US Businesses
The legalization of marijuana in the US is creating headaches not just for new marijuana businesses.
Such businesses have trouble paying taxes and getting bank accounts, and there are also problems for people who work in the growing industry, as well as for those who do not.
In states like Colorado that have legalized recreational marijuana, employees can be fired for using the drug on their own time. Landlords are not sure how to handle cannabis-smoking tenants.
US insurers and other financial services companies are mostly improvising.
Insurers may view any association with marijuana as an indication of a “risky lifestyle,” not unlike skydiving or race car driving, said a spokeswoman for the Insurance Information Institute, which is funded by insurance companies to provide information about the industry.
“The problem from a life insurance underwriter’s point of view is that, unlike tobacco, there is not a lot of data available to assess the risks of coverage for marijuana users,” she said.
While some insurers will automatically deny coverage to cannabis users, others will simply charge them a higher premium, as they would a smoker, while still others “tolerate an occasional user” without imposing any premium penalty.
Beyond the health concerns, there remains the question of marijuana’s legality.
The federal government, together with states, regulates banks, insurance companies, and other financial companies, and still classifies marijuana as a dangerous drug.
As a result, “almost anything that has to do with financial services can be an issue,” said Taylor West of the National Cannabis Industry Association, NCIA, a nonprofit group that advocates for marijuana businesses. Marijuana dispensaries and other businesses have the hardest time getting bank accounts.
Individuals can run into trouble, too.
Banks have closed the accounts of cannabis entrepreneurs and employees, who can also have problems getting mortgages.
Retirement plan providers and payroll companies can be cautious of customers associated with marijuana. Ms. West’s group went through a number of 401(k) providers before finding one that was willing to take its employees’ retirement savings. Firms were scared off by the word “Cannabis” in the group’s name, even though the organization does public advocacy, not cultivation or sales.
While health insurance companies operate very differently from life insurers, they can also be reluctant to deal with marijuana businesses. Many in the industry cannot find an insurer willing to take them as clients.
Cannabis users might find it easier than employees or entrepreneurs to hide their use from insurers.
The Insurance Information Institute, warns of the risks. Lying on an insurance application, or in an insurance medical exam, is fraud. And, so if one dies and the insurance company later discovers that person has been dishonest, it could reduce or cancel the death benefit.
For extensive information about this debate, presented in a neutral format, visit MedicalMarijuana.ProCon.org.
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