RANCHO CORDOVA-BASED INSURER LAUNCHES MEDICAL MARIJUANA COVERAGE

A Rancho Cordova-based insurer Monday launched what it calls the first
nationally available insurance coverage designed specifically for the
medical marijuana industry.

Only 14 states allow use of medical marijuana today, but Statewide
Insurance Services is nonetheless offering coverage in all 50 states.

"Given the growth in the industry, I think it's only a matter of time"
before other states allow medical marijuana, said Mike Aberle, a
commercial insurance agent with the local firm and national director
of its Medical Marijuana Specialty Division.

He added: "Now that we can offer (services) in all 50 states, we can
start the minute they go legal, without delay."

Aberle said the nationwide program covers "all aspects of the
industry," including medical marijuana dispensaries (MMDs for short),
workers' compensation, general liability, auto insurance (motor
vehicles used to transport product), equipment breakdown/damage,
property/product loss (including pot spoilage) and operations related
to marijuana growing.

The door for dispensaries and commercial insurers opened in 1996, when
California voters approved Proposition 215, which allows physicians to
recommend cannabis for treatment of cancer, anorexia, AIDS, chronic
pain, spasticity, glaucoma, arthritis, migraines or "any other illness
for which marijuana provides relief."

The number of dispensaries started to spike dramatically last year
when the Obama administration said it would not arrest marijuana
growers and sellers who abide by state laws. Previously, federal
officials prosecuted them.

Some in the medical marijuana industry estimate there are now more
than 2,000 dispensaries statewide.

Aberle began the process of forming Statewide's MMD unit in 2007.
Since then, the Rancho Cordova company has provided insurance to
clients in California, Colorado, New Mexico and Rhode Island.

Aberle said he started ramping up the national program last
year.

He said premiums range from about $650 annually up to $25,000 a year,
with numerous variables affecting price. Typical policies have annual
premiums in the $1,000- to-$4,000 range.

Max Del Real, a lobbyist with California Capitol Solutions in
Sacramento, characterized Statewide's national program as a milestone
in an industry that needs insurance protections for everyone in the
distribution chain, from growers of medical marijuana to those who use
it.

"It's very big, especially right now with public safety. Safety
protocols need to be put into place," he said.

Del Real has represented dispensaries and other segments of the
medical marijuana industry throughout California, and he said growers
remain the most unprotected group.

"How do we move out of residential areas and into commercial and
industrial space?" he asked. "A lot of people are trying to get their
minds around the cultivation of medical marijuana."

Del Real said governments throughout California have to decide
numerous issues, such as whether they will require insurance for
dispensaries.

"There is a big thing of catching up going on," he said. "Each
community is passing its own laws, and that becomes
problematic."

The growth of MMDs came so fast that some California cities --
including Placerville and Los Angeles -- have drafted ordinances and
moratoriums to halt new openings.