A Green Rush
Nov 8, 2017


California Insurance Commissioner Dave Jones approved the filing of the first admitted commercial insurance company to provide cannabis business insurance in the Golden State. The admitted carrier can begin writing policies and offering coverage for cannabis business owners. The move comes just weeks after California's cannabis growers sustained sizeable uninsured losses during historic wild fires. The state of California is poised to generate significant tax revenue from the regular sale of the drug in an established marketplace. Despite this emerging marketplace, existing federal law has historically prevented states from establishing parallel markets for credit, banking, or insurance coverage related to the drug.



Marijuana entrepreneurs and a growing number of city and state officials are contemplating the formation of public banks to serve the cannabis industry. There is currently one public bank in the United States; the Bank of North Dakota. Taking a page from the Peace Garden State, the cities of Los Angeles, Oakland, and Santa Rosa, California; Philadelphia, Pennsylvania; Santa Fe, New Mexico; and the states of Arizona and Maryland are entertaining the idea of establishing new public banks for the first time in more than 100 years.



Rachel Levine, MD, Pennsylvania's physician general and acting secretary of health, announced the Keystone State's first list of approved doctors who are registered and certified to recommend medical cannabis. Over 100 physicians are now registered for the medical marijuana program and have taken the required continuing education about medical marijuana to be named official practitioners under the program. Officials expect that Pennsylvania's medical marijuana program should be up and running by May 2018. 



On the other hand, Maine Governor Paul LePage vetoed the state's marijuana bill this week, reversing a 2014 campaign pledge. The move puts at risk an emerging industry supporters claim could exceed $325 million a year. In his veto letter, the GOP governor said the legislative rewrite of last year's referendum puts Maine in conflict with federal law, sets unrealistic time lines for launching the market, and might not generate enough tax revenue to cover the cost of market implementation or regulation. On Monday, the Maine House upheld the Governor's veto. Across Maine's 611 mile border to the north, the nation of Canada is targeting its June 2018 date for national legalization, which has set off a "green rush" at the start of an anticipated $23 billion industry. Canada will become the largest industrialized country to legalize cannabis nationally, a move even beer makers are toasting.

Cars and Construction


Michigan citizens submitted a state petition carrying more than 380,000 signatures to repeal Michigan's 52-year-old law requiring higher "prevailing" or union scale wages be paid on state-financed construction work. Supporters say the law is arcane, inflates costs, and makes it harder for nonunion contractors to compete for state business. If state election officials certify 252,000 signatures, the bill will go to the GOP-controlled Legislature, where the bill has support. Legislators would have 40 days to vote or else the measure would receive a public vote in November 2018.



Lawmakers in the Michigan House soundly defeated legislation this week that would have changed the Wolverine State's no-fault auto insurance statute. The measure would have saved Michigan drivers money by allowing them to opt out of a requirement to carry unlimited medical benefits through their auto insurance. Supporters say the bill would have helped Michiganders who face some of the highest auto premiums in the country.

Making Our Way Around The Country


Thirteen federal agencies, jointly working under the congressionally mandated National Climate Assessment initiative, released a comprehensive report on climate change this week. Congress requires this consortium to report on climate change every four years. The U.S. government agencies conclude that human activities have "pushed global temperature to the highest level in modern civilization" and that global temperature is trending upward, adversely affecting sea levels and threatening coastal and environmental disasters. We will follow this story as the 115th Congress and the Trump administration address the report's conclusions.



The Department of Labor (DOL) is appealing a Texas judge's decision to strike the overtime rule established during the Obama administration. The DOL will ask the court to stay the appeal to give officials time to rewrite the rule. The overtime rule would have forced employers to pay overtime to most salaried workers earning less than $47,476 annually. The salary cutoff for overtime pay now stands at $23,660. In striking the overtime rule this August, the federal district court held that the DOL improperly looked at salaries instead of job descriptions when determining whether a worker should be eligible for overtime pay. The department put out a request in May for public comments on how the rule should be changed and is now reviewing more than 140,000 submissions.



The National Association of Insurance Commissioners (NAIC) adopted the Insurance Data Security Model Law this week, which would create rules for insurers, agents, and other licensed entities covering data security, investigation, and breach notification. The NAIC working group solicited input from regulators as well as industry and consumer representatives throughout the drafting process. The model law is available to state lawmakers seeking to introduce data security legislation in the state legislatures next session.



The Massachusetts Supreme Court announced it will hear a wrongful death case involving a 25-year-old Massachusetts Institute of Technology (MIT) student who committed suicide on campus. The estate argues that the school was responsible for the student's death, which occurred moments after a contentious argument with a professor. Colleges and universities around the country are watching this case, and caution that a decision against MIT could place an unreasonable burden on untrained employees to stop suicides.



Next week is Kids' Chance Awareness Week. Kids' Chance is a 501(c)(3) organization that helps provide educational opportunities and scholarships for children of workers seriously injured or killed on the job. We've see the emotional impact this organization has on families of injured workers. Way to go, Kids' Chance! You are making a positive difference in our industry. Please know that you have our support for next week's campaign and beyond.


About The Way

The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly. 


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