Welcome to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento, where the California Legislature is in its final, frenzied 48 hours of session. As I write this, a handful of cannabis-related bills await final votes. Check out future reports to learn their fates.

This week we look at the insurance industry and why it continues to be a wallflower at the big state-legal marijuana dance. Also, California regulators want you to know they're cracking down on unlicensed operators. And scroll down to see Who Got the Work.

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Thanks as always for reading. Got a story idea or tip? Drop me a line at [email protected] or call 916-448-2935. Follow me on Twitter at @capitalaccounts.

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Insuring Weed

Bloomberg's Brian Louis had an interesting piece recently on major insurance carriers' continuing wariness of offering coverage to the cannabis industry, despite estimates of $11 billion in legal sales this year. The description reminded me of a recent summer trip to a high-mountain lake; the water sure looked inviting but a fear of the snow-melt temperatures that lurked below the surface kept me at knee-depth.

“The whole conversation of cannabis crosses the desks of the most senior leaders of the insurance community as they determine whether or not they want to play in this game,” said Tom Fitzgerald, global broking officer at insurance broker Aon Plc, told Bloomberg. “There's not every insurance company in the world anxious to write this stuff, at least not yet.”'

The insurance industry relies on predictability and historical statistics, two things still in short supply in the nation's emerging state-regulated marijuana markets.

Here in California, Insurance Commissioner Dave Jones has been encouraging, wheedling and cajoling carriers to offer cannabis coverage. He's had some success. The state has approved six insurance companies to write policies for marijuana operators.

Those policies can have their limits, though. Cannabis risk management specialist Jason Horst of Horst Legal Counsel in San Francisco preaches caveat emptor: buyer beware.

“While there are a number of carriers in the market, they are spread across many different “lines” of coverage ….” Horst wrote last week for the CANN Media Group. “Each of these policies is offered on forms with language different from the next, and that language ultimately defines what is and is not covered. Far too often, significant risks remain uncovered by most policies; for some major exposures, no coverage is available at all.”

Horst's advice? Scour those policies—the few that are offered—with a fine-tooth comb to avoid any surprises at claims time.

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California's Regulatory Crackdown

Over the last week, California regulators have made a big show of taking “enforcement actions” against two cannabis businesses allegedly operating without the required licenses.

On Monday, the Department of Consumer Affairs' Division of Investigation-Cannabis Enforcement Unit announced that, working with local police, it had seized cannabis, edibles and tobacco products from an unlicensed marijuana retailer, the Church of Peace and Glory in Costa Mesa. (A tip of the hat to whoever wrote the OC Weekly headline for the related story.)

The next day, the department touted its takedown of an allegedly unlicensed cannabis delivery service in Sacramento, The Cannaisseur Club.

“Selling cannabis goods without a state license is a violation of state law,” the associated press releases said. “Enforcement of unlicensed commercial cannabis activity may occur at the state and/or the local level.”

The legal actions were praised by advocates who say California's legal market can't flourish while the black market still operates.

“Nothing motivates licensure and compliance more than the stick,” Harris Bricken attorney Hilary Bricken wrote on Twitter. “The carrot is great and all, but this is what it takes from the state and the locals to get people to FINALLY follow the rules. Now, only about ~1,000 more illegal operators to go.”

Now, will the state go after bigger players? Remember, California issued a cease-and-desist letter to Weedmaps in March, accusing the site of displaying unlicensed retailers. A spokesman for the Bureau of Cannabis Control said earlier this month that there is “nothing new to report” on the conflict.

Who Got the Work

• Jennifer Tschetter has joined Carlton Fields' Tallahassee office, where she will serve as co-chair of the firm's national medical marijuana task force, comprising 18 lawyers throughout the country. The firm says Tschetter's practice will focus on cannabis law, assisting treatment centers with applications, administrative litigation, license sales and regulatory compliance. Tschetter previously served as general counsel and chief of staff at the Florida Department of Health.

• San Francisco firm Hedin Hall has filed another purported class action against marijuana delivery app Eaze Solutions for alleged violations of the Telephone Consumer Protection Act. This time, the named plaintiff said she was “inundated” with text solicitations from Eaze despite never having used the app. Hedin Hall filed a similar proposed class action against Eaze in May in California's Northern District. Attorneys representing Eaze, which include lawyers from Boies Schiller Flexner, have asked the court to send that case to arbitration.

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In the Weeds

>> Is the Trump administration plotting a war on weed? BuzzFeed reported Wednesday that the multi-agency Marijuana Policy Coordination Committee is working to counteract what its leaders say is a positive “partial, one-sided and inaccurate” prevailing view of marijuana. Agencies are collecting anecdotes and data designed to show the negatives of cannabis use, including “issues created by state marijuana initiatives.” Didn't Colorado Sen. Cory Gardner just recently secure the president's support for legislation aiding marijuana-regulating states? [BuzzFeed]

>> Have a Heart became the first dispensary in Washington to unionize when the company last week signed a collective bargaining agreement with workers, who will be represented by UFCW 21. Could this become a growing trend in an emerging industry still dealing with an array of employment and workplace issues? [SeattlePI]

>> Banking officials from 12 states have called for a federal solution to marijuana banking troubles. “We urge Congress to consider legislation that creates a safe harbor for financial institutions to serve a state-compliant business, or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity,” said letter sent to congressional leaders last week. Signatories include officials from Alaska, Connecticut, Hawaii, Louisiana , Michigan, Montana, Nevada, New York, Oklahoma, Oregon Pennsylvania and Washington state. [Philly.com]

>> Speaking of banking, here's how banks look for signs their customers are running a pot shop. One tell that a customer didn't fess up to his or her real job during on an application — the customer regularly deposits $9,500 in cash (to avoid the $10,000 cash transaction report.) Another tip-off: Customers who regularly go to different branches to make deposits. [American Banker]

>> Neighbors frustrated with a stinky pot grow in California are suing under RICO statutes. Nine residents of unincorporated Sonoma County say the greenhouses operated by Green Earth Coffee lack the proper permits and emit a “skunk-like stench.” They're not happy with the constant drone of a generator, either. The racketeering complaint mirrors similar lawsuits brought by marijuana neighbors in Oregon, Colorado and Massachusetts. [The Recorder]

All the Stuff for Your Calendars

Sept. 6: The Massachusetts Cannabis Control Commission meets.

Sept. 7-8: The National Cannabis Bar Association holds its annual Cannabis Law Institute in Washington, D.C. Keynote speakers include congressional members Earl Blumenauer, David Joyce and Ed Perlmutter as well as Sundie Seefried, president and CEO of Partner Colorado Credit Union and Safe Harbor Private Banking.

Sept 8: The statutory—but not expected—start date for Ohio's medical marijuana program. For months, state regulators have made clear that, while they hope to have an operational framework in place on Sept. 8, it is unlikely there will be any regulated marijuana for sale that day due to delays in licensing growers.