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Marijuana status change seen as evolution, not revolution - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Marijuana status change seen as evolution, not revolution by Matthew Lerner Cannabis , P/C Insurers , Regulation Hub International Jun 2, 2026 Recent federal moves affecting medical cannabis could improve prospects for some operators but are more of an incremental step in the evolution of the industry rather than a wholesale recasting of the sector, insurance and cannabis industry sources say. The changes may improve the profitability of some cannabis providers, but they are not yet sufficient on their own to materially change the insurance market for the sector, they say. On April 23, the U.S. Department of Justice placed marijuana products approved by the U.S. Federal Drug Administration and products containing marijuana subject to a qualifying state-issued license into Schedule III of the Controlled Substances Act. It further announced that there would be “the initiation of an expedited administrative hearing process to consider the broader rescheduling of marijuana from Schedule I to Schedule III,” beginning June 29. The rescheduling would remove cannabis from a category that includes heroin and place it in one for drugs with accepted medical uses. The announced changes affect only a portion of the medical cannabis market and leave unchanged the status of state-licensed recreational cannabis, which remains federally illegal. “Overall, we view this less as a sudden market shift and more as another step in the continued normalization of the cannabis industry,” said Tony McIntosh, San Clemente, California-based program president for Starwind Specialty. The move appears to boost the medical side of the business but leaves many issues unresolved, said Ian Stewart, chair of the national cannabis and hemp law practice at Wilson Elser Moskowitz Edelman & Dicker in Los Angeles. “There are more questions than answers right now,” he said. One will be how other government agencies, such as the FDA, the Drug Enforcement Administration, and possibly even the Department of Health and Human Services, will participate in the new regulatory regime. “I want to see how it works with all the details,” he said. Insurance needs do not appear to have shifted but questions remain, said Josh Smart, Spokane, Washington-based North American practice leader and chief sales officer for agribusiness, food and cannabis for Hub International. The move is historic but narrowly scoped and begins to remove structural barriers that had driven restrictive coverage limitations and exclusions, Mr. Smart said. “The rescheduling does not automatically change insurance coverage terms, policy language, or admitted market access overnight,” he said. “It’s too early to tell exactly how it’s going to work, because the order is incomplete.” The rescheduling could lead to better overall economics for operators in the sector, Mr. McIntosh said. “From a managing general agent and carrier perspective, it does not fundamentally eliminate underwriting discipline or regulatory complexity overnight,” he said. Companies with stronger balance sheets, though, are often more stable accounts with better risk management, Mr. McIntosh said. Medical cannabis operators appear positioned to benefit most from the April rescheduling, which will allow some business owners expanded tax benefits. “If medical cannabis operators ultimately gain relief from 280E tax restrictions, it could materially improve profitability, cash flow, reinvestment into operations, and overall financial resilience,” Mr. McIntosh said. Hub’s Mr. Smart also sees potential for medical operators. “Improved margins from 280E relief are a genuine opportunity for operators to strengthen their balance sheets and invest in their operations,” he said. “Without a doubt, stronger balance sheets tend to correlate with stronger risk management procedures and safety execution, which make for better underwriting conversations.” Dr. Craig Antell, New York-based CEO of State of Mind Cannabis Holdings, the parent of individual units State of Mind Flower, State of Mind Realty and State of Mind IP, said the move benefits his business “tremendously.” “It allows us now to have federal tax deductions on our business that we weren’t able to have before, when it was viewed as Schedule One,” Dr. Antell said. It may become more necessary to separate the medical and recreational operations of his business, and it remains to be seen if the rescheduling will lead to any insurance changes, he said. “We’re waiting for a lot of answers,” Dr. Antell said. Related News King Risk buys construction agency June 2, 2026 Hub names national chief cross-sell officer June 2, 2026 FIFA mural flap is a whale of a lawsuit June 2, 2026 Texas court revives comp insurer’s subrogation dispute June 2, 2026 Medical severity, care access top comp trends: report June 2, 2026 Washington opens safety probe into deadly incident June 2, 2026 ANV acquires comp MGA from Hub June 2, 2026 EPIC names Pierce natural resources practice chairman June 2, 2026 Ryan Specialty promotes Giuffre within USQRisk June 2, 2026 Facebook-f X-twitter Linkedin-in Business Insurance is a singular, authoritative news and information source for executives focused upon risk management, risk transfer and risk financing. 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