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Panel advances bill to create pathway for cannabis employers to access workers’ compensation
Summary
AB 1209 would authorize the Division of Workers’ Compensation to contract with third parties to coordinate networks of insurers, banks and vendors so cannabis employers can secure workers’ compensation and related services; supporters said current constraints have left many cannabis employers un- or under‑insured.
Assemblymember Michelle Rodriguez’s AB 1209 passed out of the committee after detailed testimony describing gaps in workers’ compensation coverage in the cannabis industry and the regulatory and banking constraints that contribute to those gaps.
The bill would authorize the administrative director of the Division of Workers’ Compensation (DIR) to contract with third‑party agents to serve as benefit coordinators. Those agents would help cannabis employers establish and maintain a network of licensed insurers willing to underwrite workers’ compensation for the industry and a network of providers offering banking, payroll and related services.
Supporters told the committee that existing law requires employers with one or more employees to provide workers’ compensation coverage, but many licensed cannabis businesses struggle to obtain coverage because the product remains federally illegal, which deters insurers and banks. Witnesses presented WCIRB data and consultant analysis indicating only a small proportion of employers in the sector appear on the public insurance records; one consultant testified that roughly 11.5 percent of cannabis‑related employers had verifiable workers’ compensation coverage in the available data.
Testimony emphasized the bill is designed to provide administrative transparency and facilitate migration to full compliance rather than blanket amnesty. Proponents said the approach would lower unit costs of coverage, increase marketplace participation by insurers and reduce worker risk by expanding actual coverage. Opponents were not recorded in the hearing; the committee passed AB 1209 to the Committee on Business and Professions with a recorded vote of 15 ayes and 2 noes.
