How running a marijuana business cost this man life insurance
Derek Peterson, the CEO of Terra Tech—a company that grows and sells cannabis products in California and Nevada and is one of the biggest players in the burgeoning pot business—has been denied life insurance simply because of the industry in which he works.
“We cannot accept premium from individuals or entities who are associated with the marijuana industry,” reads a letter from Mutual of Omaha, a Fortune 500 insurance company. The Influence has obtained a copy of the letter, which you can read in full below.
Strangely enough, Mutual of Omaha does insure people who use marijuana, and is known for offering them relatively good rates. Most insurance companies classify cannabis consumers in the same category as cigarette smokers, despite scientific evidence that marijuana smoke is much less harmful that tobacco smoke.
According to various life-insurance sites, Mutual of Omaha is one of several insurance companies that will offer non-tobacco-smoker rates to cannabis users, as long as they consume about once per week. A company spokesman would not confirm this, but did say that “consuming [cannabis] is not a automatic exclusion.”
“If they’re willing to insure people who utilize cannabis, what’s the concern with someone operating under state laws?” says Peterson. “It’s extremely frustrating. Entrepreneurs who are creating jobs and paying taxes are still suffering [from the lack of] very basic services that we need, whether it’s banking or insurance or benefits.”
Mutual of Omaha attempted to justify the rejection in the letter, but didn’t even offer a complete sentence: “We are regulated by agencies of the.” it reads. It seems that the company intended to reference federal prohibition as the reason for rejecting the application.
“Terra Tech is also regulated by federal agencies, pays federal taxes, and is a publicly traded company that must follow SEC rules,” says Peterson. “That’s why I have a difficult time understanding [this decision].”
He chalks it up to “older, rooted archaic beliefs” about cannabis. “The negative connotation associated with cannabis is still lingering out there, even though it’s gotten a lot better in the last few years.”
“I can’t imagine [Mutual of Omaha] has been subject to a federal crackdown,” he notes. “It was probably an internal decision.”
Federal law gives states the authority to regulate the insurance industry. “However, there are overarching federal regulations that apply to lots of things,” says Jim Nolan, a spokesman for Mutual of Omaha. “There are multiple levels of regulations involved in our business.”
Mutual of Omaha does not comment on individual applications due to privacy concerns, says Nolan. He also declines to discuss whether there is a company-wide policy regarding people who work in the cannabis industry.