The Vermont regulator does not feel it can license a captive insurance company writing cannabis business while the substance remains listed as a Schedule 1 drug under the US federal Controlled Substances Act, although its biggest concern is the willingness of banks to be involved in this sector.
Those were some of the findings of a panel called, “Hot Topics with Dave Provost’, at the VCIA annual conference held in Burlington, Vermont. Speakers included Sandy Bigglestone, director of captive insurance for Vermont; Dave Provost, deputy commissioner of Vermont's captive insurance division; Stephanie Lampi, senior risk manager at Microsoft; and Brenda Stewart, senior account manager at AIG.
“The biggest issue we have is where you put the money,” said Provost. “You can’t put it in anything other than a credit union to state bank.” He added that there are further concerns surrounding federal deposit insurance.
“There are a not a lot of captives writing cannabis right now,” said Provost. “A common thread is that they are staying in their state.”
The medical usage of cannabis became legal in Vermont in May 2004, and recreational marijuana usage became legal on July 1, 2018. The state has a number of medical marijuana dispensaries.
Sales of legal cannabis were worth $9.7 billion in 2017, growing 33 percent from $7.3 billion in 2016, according to report from Arcview Market Research and BDS Analytics. The Mid-Year Update to the State of Legal Marijuana Markets 5th Edition projects that by 2021, the legal market will reach $24.5 billion.
“Apparently the feds are leaving them [captives writing cannabis] alone for now,” added Provost. He added that once the situation changes at the federal level, the commercial market will step right in.
A bipartisan group of legislators introduced a bill in Congress that would reconcile the conflict between federal and states laws governing cannabis.
The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act of 2018—introduced by Senators Cory Gardner and Elizabeth Warren on June 7—would exempt individuals in compliance with state marijuana laws, and a set of new federal guidelines, from certain provisions of the federal Controlled Substances Act.
VCIA 2018, Vermont regulator, Cannabis, Captive insurance, Dave Provost, North America