CLAIM Act Returns: Senate Bill Would Shield Insurers Covering Cannabis Firms

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A cannabis retailer in Colorado can sell flower legally under state law, pay its taxes, employ a full staff, and still get turned down by half the insurance carriers it calls looking for basic property coverage. That gap between state legality and practical business operations is exactly what a group of bipartisan senators is trying to close again with the Clarifying Law Around Insurance of Marijuana Act, better known as the CLAIM Act. This isn't a new idea -- the bill has been refiled in some form since 2019 and has yet to make it across the finish line.

What keeps bringing it back is that the underlying problem hasn't gone away. Dispensaries, cultivators and processors operating entirely within their state's medical or recreational marijuana laws routinely struggle to secure worker's compensation, property, casualty and title insurance, because insurers worry that underwriting a federally illegal substance could expose them to liability. The CLAIM Act's reintroduction lands in the middle of an unusually busy stretch for cannabis policy in Washington -- the Cannabis Administration and Opportunity Act just got reintroduced in the Senate, the CLIMB Act is circulating as a broader fix, and the fallout from Trump's December 2025 executive order pushing marijuana toward Schedule III is still working its way through federal agencies. None of that resolves the insurance question on its own, which is why CLAIM keeps coming back.

What the CLAIM Act Actually Does

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Strip away the legislative language and the CLAIM Act is a fairly narrow, targeted fix. It would bar federal regulators from penalizing an insurance company simply for writing policies for a state-legal marijuana business. Right now, insurers operate in a gray zone where underwriting a cannabis company could theoretically be construed as facilitating activity that's still a federal crime under the Controlled Substances Act, even if that activity is fully legal where it's happening. The bill removes that federal penalty risk entirely.

It also stops insurers from dropping or scaling back existing policies for cannabis companies -- or businesses that serve them -- purely because of the nature of the business. That matters because even carriers willing to write a policy in year one sometimes get cold feet at renewal, leaving operators scrambling for replacement coverage on short notice. The bill's scope covers the products cannabis businesses actually need and struggle to find: worker's comp for their employees, property insurance for buildings and equipment, casualty coverage for liability exposure, and title insurance for real estate transactions.

The protections extend to businesses operating under a state's medical or recreational marijuana program, not just recreational retailers. It's worth being clear about what this bill doesn't do: it doesn't legalize marijuana federally, doesn't reschedule it, and doesn't create some parallel legal framework. It's conceptually similar to the SAFE Banking and SAFER Banking efforts that have circulated in Congress for years -- narrow, technical, aimed at a specific financial-access problem rather than the broader legalization question. That narrower framing is part of why it's drawn bipartisan cosponsors in the past, even from lawmakers who aren't ready to back full federal legalization.

A Bill With a Long History and a Reshuffled Roster

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The CLAIM Act isn't a fresh idea getting its first hearing -- it's more like a familiar guest who keeps showing up at the same dinner party. Versions of this bill were introduced in 2019, 2021, 2023 and again in 2025, and none of them made it to a floor vote, let alone passage. That pattern alone tells you something about how cannabis financial-services legislation moves in the Senate: there's rarely outright opposition, but there's also rarely enough institutional momentum to force a vote.

For most of that run, the lead sponsor was Sen. Bob Menendez of New Jersey, working alongside a genuinely cross-ideological group that included Rand Paul of Kentucky, Jon Tester of Montana, Steve Daines of Montana and Jeff Merkley of Oregon. That's a lineup spanning libertarian-leaning Republicans and cannabis-friendly Democrats from both coasts and the Mountain West -- not the kind of coalition you'd expect to stall repeatedly.

Menendez is no longer in the Senate as of 2026, which means the sponsor lineup on this latest refiling has shifted. Anyone tracking this bill closely should check congress.gov for the current bill text and cosponsor list rather than assume the old roster carried over intact -- these things shift year to year, and it's easy to cite outdated sponsor names in a story like this.

On the House side, companion legislation has typically come from Reps. Nydia Velazquez of New York and Warren Davidson of Ohio, another Democrat-Republican pairing that underscores the bill's cross-aisle appeal. That bipartisan pattern, repeated across multiple congressional sessions without a single floor vote, is really the story here: broad agreement that the problem is real, paired with a Senate calendar that never quite makes room for it.

Why Cannabis Businesses Still Can't Get Basic Coverage

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The root of the problem is federal scheduling. Marijuana remains classified as a Schedule I substance under the Controlled Substances Act, which puts it in the same legal category as heroin, at least on paper. Insurance companies underwriting a marijuana business worry that doing so could be read as materially assisting drug trafficking, even when that business is operating in full compliance with state law. That fear alone is enough to push many carriers out of the market entirely.

The practical result is a thin, expensive marketplace. Fewer carriers means less competition, which means higher premiums for the businesses that can find coverage at all. Property, casualty and title insurance for dispensaries, cultivators and processors are especially hard to come by -- title insurers in particular have been cautious about cannabis real estate transactions given the federal illegality question.

That thin coverage market leaves cannabis businesses exposed in ways most other industries simply aren't. A cultivation facility fire, a break-in at a dispensary, a crop loss from equipment failure, or a workplace injury on a processing line can turn into a business-ending event when there's no adequate insurance backstop. This is a real operational risk, not an abstract policy complaint.

It's the same dynamic that's kept the SAFE and SAFER Banking Acts stalled for years -- banks worried about federal exposure for serving cannabis clients, insurers worried about the same thing, both waiting on Congress to remove that risk explicitly rather than relying on informal guidance that can change with each administration. The friction doesn't stop at plant-touching businesses either -- law firms, marketing agencies and equipment vendors serving cannabis clients report similar trouble getting coverage, simply because of who their clients are.

The Bigger Legislative Picture in 2026

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The CLAIM Act's refiling isn't happening in isolation -- it's landing in what's shaping up to be one of the more active stretches for cannabis policy on Capitol Hill in years. On July 16, a group of seventeen senators led by Cory Booker, Chuck Schumer and Ron Wyden reintroduced the Cannabis Administration and Opportunity Act with 14 cosponsors, aiming at a much bigger target: full federal legalization and a regulatory framework to go with it.

Alongside that sits the CLIMB Act, which takes a broader swing at the same problem CLAIM addresses but widens the net considerably. Rather than focusing narrowly on insurers, CLIMB would block federal agencies from penalizing banks, insurers, investors, accountants, attorneys, marketers and technology companies for doing business with state-legal marijuana operators -- essentially extending safe-harbor protection across the entire ecosystem of ancillary service providers.

Then there's the rescheduling question. In December 2025, Trump signed an executive order directing federal agencies to move marijuana from Schedule I to Schedule III under the Controlled Substances Act, a process expected to play out over the course of 2026. That shift would meaningfully ease the tax burden cannabis businesses currently carry under IRC Section 280E, which bars standard business deductions for companies trafficking in Schedule I or II substances, and it would open doors for federally sanctioned research that's been nearly impossible under Schedule I.

What rescheduling won't do is legalize cannabis federally or permit interstate commerce, and it won't touch the insurance or banking access problems at all. Those require their own legislation. That's the real takeaway from this moment: CLAIM, CLIMB, SAFER Banking and CAOA are all moving pieces on the same board, each addressing a different slice of the same underlying federal-state conflict, and none of them has yet cleared the Senate on its own.

Four or five rounds of reintroduction over six years is a strange kind of consensus. Lawmakers from both parties keep agreeing the insurance gap is real and keep signing on to fix it, yet the bill never quite gathers enough institutional weight to reach the Senate floor. That's not a knock on the idea -- it's a pretty accurate picture of how cannabis-adjacent financial reform tends to move in Congress: broad informal agreement, no forcing mechanism.

Rescheduling to Schedule III, whenever it's finalized, will change the tax and research picture for cannabis businesses in meaningful ways. It won't touch insurance access, and it won't touch banking access either. Those are separate legal problems that require separate bills -- CLAIM, CLIMB or SAFER Banking actually passing, not just being introduced -- to resolve. A cannabis business that can't get standard property coverage today will still be searching for it after rescheduling takes effect.

For operators and industry watchers, the practical move is to keep an eye on congress.gov for the actual refiled text, the current sponsor list, and any sign of committee action, rather than assuming this particular filing is the one that finally breaks the pattern. State laws on marijuana business licensing and insurance requirements vary considerably, so anyone making coverage decisions should confirm the current rules in their own state and talk to a licensed insurance professional rather than relying on the federal picture alone.