Cannabis Insurance laws are changing along with the marijuana industry and keeping on top of marijuana news is important for your cannabis business in order to make informed decisions on cannabis insurance. As the marijuana industry changes and sets new precedent when it comes to cannabis insurance, S2S Insurance Specialists are committed to bringing marijuana news from an insurance standpoint and how to mitigate risk for cannabis businesses, by seeing examples in the news of marijuana businesses who were not properly insured.

The Growing Concern of Theft in the Cannabis Industry Is Your Business Covered?

The coronavirus (COVID-19) pandemic is forcing businesses in the cannabis industry, like many other industries, to examine and adapt their business models to – dare we say it – the new norm.  While many cannabis businesses have thrived despite the numerous risks inherent in the industry, including a lack of traditional capital sources, uneven regulation and intense scrutiny, this crisis is bringing heightened risks from burglary and theft to data breaches to a number of other ways criminals are seeking to capitalize on the crisis for their own financial gains. To this point, risk management and the need for effective insurance coverage has been on the back burner for many business owners. However, emergency preparedness needs to be top-of-mind with every business owner and operator.

Below are three types of insurances that should be part of your policy to protect you from crippling losses. We encourage you to contact S2S Insurance Specialists with any questions. 

 

Crime Insurance

Criminals are well aware that the cannabis industry includes many lucrative, cash-intensive businesses, which means you have a target on your back. In fact, the most common cause of loss facing cannabis businesses is theft. Approximately 90% of insurance claims in the US cannabis industry so far have involved an element of theft, according to Insurance Business Magazine (Dec, 2019). This new reality was recently punctuated in a recent article in the Denver Post, titled “Denver dispensary burglaries hit 3 year high as 2019 ended with a rash of armed robberies.”

 

Losses from an office burglary to destruction of property to theft of finished product can have a devastating effect on your business. The only way to ensure you get reimbursed from losses caused by certain illegal activities is to have Crime Insurance. Below are some of the common scenarios that Crime Insurance covers:

  • Employee theft of money, securities or property inside the premises.
  • Non-Employee theft both inside and outside the premises.
  • Forgery or Alteration, including inadvertently accepting forged checks or counterfeit money or employees altering checks, bank drafts and other financial documents.
  • Computer and wire transfer fraud.
  • Robbery of valuables while in transit under the care of a messenger or armored car.

Many business owners are not aware that Cannabis Crime Insurance isn’t automatically bundled into a Cannabis Insurance Policy, and thus, when they experience a loss due to criminal activity, they are not covered. It is important to reach out to your Cannabis Insurance Specialist to discuss your needs and options.

Open Cargo Insurance

S2S insurance, Eric Rahn, cannabis cargo theft, dispensary insurance, who insures the marijuana industry

Cargo coverage is a protective cannabis insurance, and it can help you recover the loss in such an event that your product is lost, damaged, or stolen while being either loaded, transported, or unloaded. Many business owners and distributors do not have cargo coverage because they thought their property coverage covers cargo. Having this type of insurance policy is a necessity for cannabis business owners that rely on any form of shipping.

The black market is booming for cannabis related products and thieves are hard at working plotting out ways to intercept cargo before a shipment reaches it’s destination.  Everything from growing supplies, to electronics, to raw and finished products are in high demand. Marijuana-related products can quickly become untraceable, and then repackaged and sold in a short amount of time making this type of cargo a likely target for thieves and organized crime groups that use bribes and other tactics to infiltrate supply chains.

In some states, retail stores are closed and companies are relying more heavily on delivery service. If your operation transports items via in-house or hired delivery, you need cargo coverage to protect your inventory and cash from loss.

Commercial Auto Insurance does cover the contents within the vehicle, rather it covers the vehicles from damage and the drivers and third parties from physical injury. A combination of Hired Non-Owned Auto, Crime and Cargo policies should be reviewed if your company has this exposure.

Cyber Defense & Data Breach Insurance

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Cyber fraud is a very real and costly risk that is largely unaddressed within the cannabis community. Even the smallest of cannabis businesses are at risk of data breaches because they are part of a larger interconnected network of seed to sale vendors.

Particularly right now in the midst of the pandemic, more employees are working from home, which greatly increases your company’s risk of network vulnerability and data breaches. Given that many dispensaries collect patient/client personal information, a breach of even a single computer could provide hackers with valuable information on all their partnering dispensaries, product deliveries and clients’ private information.

The impact of a data breach reverberates and can have a costly impact on your operations. For example, if a company’s distributer, for example, detects the breach, your company can be held liable. To help mitigate risk, it is strongly recommended that you have Cyber Defense & Data Breach Insurance to protect you from costly legal claims.

In summary, the COVID-19 public health crisis has spurred all sorts of unexpected events and changes in the way business is conducted and how you are protected. Businesses are facing more serious threats as you try to adapt to the rapidly changing realities perpetuated by the pandemic.

We understand that insurance may not be at the top of your mind, but nonetheless, taking steps to minimize your risk now will protect you and your company down the road. Please contact S2S Insurance Specialists so we may examine your current policies, help you understand what is and is not covered, and adjust your policy, as needed.

How the COVID-19 Pandemic May Impact Your Cannabis Business & Ways to Minimize Risk

Cannabis companies may have gotten a boost when numerous states declared it an essential business that could remain open during the coronavirus (COVID-19) pandemic. However, businesses operating in the medical and recreational marijuana industry face numerous risks during these unprecedented times. Please take a moment to learn about some of the more common risks currently facing your company and please reach out to S2S Insurance Specialists with any questions.

 

Consumer Claims

It goes without saying that cannabis companies need to be extra careful about sanitation, safety, compliance and risk management – including having adequate insurance – during this public health crisis, and going forward. There will be lawsuits by consumers given the nature of how COVID-19 spreads and if your business allegedly fails to sanitize the premise, abide by social distancing rules or otherwise prevent the spread of COVID-19, your company may be at risk.

 

Also, consumption habits are changing how cannabis products are consumed.  The highly publicized dangers associated with vaping, coupled with the current pandemic – both in terms of the damage COVID-19 causes to the lungs and the need for social distancing – are shifting demand from smokable products to more edibles and tinctures. Edibles are particularly vulnerable to product liability claims for various reasons. Product Liability Insurance must be a top priority for any cannabis related business. Furthermore, to minimize risk, your business should demand certificates of insurance (and, ideally the full policy) from vendors to confirm protection in the event of a claim arising from another company’s product that you may sell to consumers.

 

Directors and Officers (D&O) Insurance may offer protection if executive-level business personnel are targeted in a civil lawsuit over claims they made or actions they took. For example, if a dispensary were to stay open against the state mandate or if it violates the state mandate on the number of people allowed in an establishment, and then is accused by a consumer to be the source of contracting the highly contagious disease, D&O insurance may protect the directors or officers of the company if the company is sued because of its actions. You should reach out to your insurance provider to better understand this type of coverage, how it can protect your company’s executives, and if it can apply to the current crisis.

 

Cyber Threats & Data Breaches

 

As the pandemic continues, more employees are working from home, even in the cannabis industry and particularly among administrative staff. This leads to a heightened risk for network vulnerability and data breaches. If your company stores private information about your employees or customers on a computer or server, you are legally liable for protection of this personal information. To help mitigate risk, it is strongly recommended that you have Cyber Defense & Data Breach Insurance to protect you from costly legal claims.

 

Business Interruption

 

Multiple states, including New JerseyNew YorkMassachusetts, and Ohio, have proposed legislation that would mandate business interruption coverage for alleged COVID-19-related losses even where policies have explicit bacteria/virus exclusions.

 

Business interruption coverage is commonly sold as a component of commercial property insurance policies to provide relief to an insured for lost profit and extra expenses when its business operations are disrupted by “direct physical loss or damage” to insured property. However, closing a business due to a threat of exposure or spread of COVID-19 is not “direct physical loss or damage” to insured property. It will be important to discuss your particular coverage with your insurance provider to understand your level of protection and if you meet your state’s requirements, should the legislation pass. If your cannabis business is disrupted, keep meticulous records of lost business income and other expenses in case of the need to file an insurance claim—and contact your insurance specialist for guidance.

 

In summary, the COVID-19 public health crisis has spurred all sorts of unexpected events and changes in the way business is conducted and how you are protected. We understand that insurance may not be at the top of your mind, but nonetheless, taking steps to minimize your risk now will protect you and your company down the road. It is important to note that the insurance landscape for the cannabis industry is ever-changing, especially during these unprecedented times. Please contact us so we may examine your current policies, help you understand what is and is not covered, and adjust your policy, as needed.

 

IF you have questions about your current policy, need help securing coverage for your business, or have any questions, please contact us by visiting us at our website,or schedule a call with an experienced broker.
 

Marijuana Delivery Robberies Becoming Commonplace

Since banks remain reluctant to work with marijuana dispensaries, the industry remains burdened with cash for the most part. Needless to say, the liability to cannabis companies that are holding large amounts of cash are obvious. Marijuana delivery robberies are becoming very commonplace in places like California.

In one town close to San Francisco called Concord, police are reporting marijuana delivery robberies are as frequent as four times a month. It only makes sense for these cannabis dispensaries to find the right sort of marijuana coverage to protect against these robberies. Lt. Mike Kindorf with the Concord Police Department recently spoke to reporters concerning these marijuana delivery robberies.

marijuana delivery robberies are on the rise and cannabis product liability is very important

“There’s a significant increase and talking with other law-enforcement agencies,” Kindorf said. “I know that Concord is not alone in that crime trend that it’s occurring in other parts of Contra Costa County as well.”

Because cannabis is still illegal in the eyes of the federal government, California pot sellers are stuck dealing in cash for the most part, which is luring in the criminal element, even more than the drugs.

“In a few robberies that we have they’ve targeted cash and not even touched the marijuana,” said Kindorf.

In December, a driver showed up for a drop off in the parking lot of the Bank of America near the Sun Valley Mall and was robbed by a handgun wielding suspect.

The thief grabbed both the pot and the cash but police later found a duffle bag stuffed with pot products abandoned by the side of I-680.

Concord Police believe that it’s a crime that’s underreported and even in the cases where police are called in, the victims often don’t want to cooperate.

“Even though it’s legal it seems to be a little bit of an off the grid business,” Kindorf said. “It’s kind a virgin territory that we’re in for sure.”

For instance in that armed robbery that happened near the Sun Valley Mall, police have a suspect but they’re having a hard time getting the victim to call them back so we can make a positive ID.

The financial risks associated with owning a marijuana company are made particularly obvious by so much cash being present. Cannabis product liability and insuring against theft is essential considering how often these marijuana delivery robberies are occurring. Reach out to S2S Insurance Specialists, Eric Rahn and David Rahn with any questions.

Read more at Kron4.com

International Forces Pressuring United States to Reschedule Marijuana

The EU Parliament decided rescheduling marijuana was the right thing to do after the World Health Organization recommendation
The EU Parliament Building

After Canada legalized marijuana in 2018 and Canadian cannabis companies completed exporting contracts for medical marijuana with European countries and other nations around the world, they immediately began violating international drug treaties. Either marijuana needs to be rescheduled by the U.N. so that those violations stop or they need to take some sort of action. The World Health Organization is recommending that they reschedule marijuana.

The mostly likely scenario seems to be that the U.N. will reschedule marijuana. The European Union Parliament recently rescheduled marijuana, so the trend seems to be heading in that direction in general. If marijuana were removed from its Schedule I status here in the United States, more cannabis insurance carriers would become available and we would see the cannabis industry begin to resemble more traditional industries and will face the same sort of liabilities.   

The World Health Organization (WHO) is calling for whole-plant marijuana, as well as cannabis resin, to be removed from Schedule IV—the most restrictive category of a 1961 drug convention signed by countries from around the world.

The body also wants delta-9-tetrahydrocannabinol (THC) and its isomers to be completely removed from a separate 1971 drug treaty and instead added to Schedule I of the 1961 convention, according to a WHO document that has not yet been formally released but was circulated by cannabis reform advocates.

Marijuana and cannabis resin would also remain in Schedule I of the 1961 treaty—they are currently dual-designated in Schedules I and IV, with IV being reserved for those substances that are seen as particularly harmful with limited medical benefits. (That’s different from the U.S. federal system, under which Schedule I is where the supposedly most dangerous and restricted drugs—like marijuana, heroin and LSD—are classified.)

Once marijuana is viewed like any other normal industry here in the United States, cannabis liability insurance, marijuana D&O insurance, cannabis workers compensation coverage and more will be commonplace. In the meantime the liabilities to insurance businesses are still very real and it behooves cannabis entrepreneurs to understand their marijuana coverage alternatives. Reach out David Rahn or Eric Rahn, your cannabis insurance specialists, to find out more.

Read more at Forbes.com

Understanding Why Cannabis Insurance Is Hard To Come By

Finding dispensary insurance, cannabis product liability coverage, marijuana crop insurance and other forms of coverage for cannabis is challenging due to the Schedule I status of marijuana on the federal level. Finding cannabis insurance specialists is also challenging because the industry is so new and insurance professionals are all still learning. That does not mean though that some insurance agents have not spent more time understanding the unique financial risks associated with being a part of the cannabis industry than others.

Insurance for marijuana dispensaries and processors can be difficult to find.

The banking restrictions may be one of the largest hurdles preventing larger insurance carriers from offering marijuana related insurance policies. The banking system is essential for most insurance companies and the fear of being accused of infractions such as money laundering by working with companies that touch the cannabis plant stops the large players from taking the risk.

“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. “There’s not every insurance company in the world anxious to write this stuff, at least not yet.”

“Just a few handful of carriers” will write policies for cannabis-related firms, said James Nelson, a retail insurance broker and owner of New Growth Insurance in Alameda, California.

Hartford, based in the Connecticut city of the same name, said it’s abstaining from the industry, and “that is unlikely to change” while the federal ban is in place.

“We do not underwrite any business that sells, grows, transports or distributes marijuana or products derived from marijuana cannabinoids,” the company said in an emailed statement.

There are all sorts for cannabis coverage alternatives for dispensaries, medical marijuana doctors, cannabis product liability insurance and much more. It has not been very easy for companies working with marijuana to find answers on how to cover their financial risks.

While other insurance companies may be too nervous to offer coverage to marijuana companies, S2S Insurance Specialists has embraced the burgeoning cannabis industry. Get in touch with Eric Rahn or David Rahn to discover the best marijuana insurance alternatives available to your company.

Read more at Bloomberg.com

California Marijuana Insurance Big Topic at Wholesaler Association Conference

If California marijuana insurance is a major topic at a wholesaler conference then you know that it is important. California saw over $9 billion in general insured losses last year over the two November wildfires alone. Also, a massive court decision known to as the Dynamex decision is shaking the industry.

The California Wholesaler Association conference is a major conference for insurance agents in the 5th largest economy in the world. California is lacking in cannabis insurance specialists but the industry is ramping up quickly after recreational marijuana became a legal regulated market in 2018. A little over a year later, California is still working out many details and has a long way to go, but the California marijuana insurance business is likely to become much larger.

cannabis insurance specialists are more important since so few people involved in the business of marijuana understand their alternatives

A number of marijuana insurance agents were present to speak and learn at the conference and spoke with an Insurance Journal reporter. The CEO of one particular insurance company had this to say:

He said most cannabis operators seek the same kind of insurance many businesses want, such as general liability, workers’ compensation, slip and fall.

He said growing facilities with their expensive equipment and sophisticated operations need a lot of insurance.

“We’re seeing high property limits,” he said.

Brown said some businesses have been in operation long enough to have a good loss history, but many operated in grey areas before California legalized adult use, so that history isn’t always a dependable one for underwriting purposes.

Underwriting as a whole for the cannabis industry can be tough, he said, because there are also numerous companies with no loss history at all.

“The business interruption exposure, for example, is a vague and nebulous thing for a lot of startup operators,” he said.

Tatum said that because banks are regulated by the federal government, which still considers cannabis a controlled substance, that many operations have an abundance of cash on hand.

“Finding coverage for the actual cash on the premises has been a problem,” he said.

Quilici said that educating her clients on the ins and outs of cannabis coverage has become a big part of the job, as has educating herself.

“I’ve got retailers that know this business than I ever could, and I’ve got retailers that know nothing,” she said.

California marijuana farms have been around illegally since the 1960's but now that cannabis is legal marijuana crop insurance is important

Cannabis coverage is essential and it is not surprising that marijuana business owners are looking for the same sort of Directors and Officers insurance, slip and fall insurance and other logical forms of coverage as mainstream industries. California has been the home of illegal marijuana grows since the 1960’s and the idea of getting any sort of marijuana insurance coverage probably never really occurred to growers.

The marijuana industry is growing rapidly and so proper cannabis insurance coverage will be as normal for cannabis companies as any other industry. Cannabis crop insurance is certainly important with the wildfires in that region of the country. Beyond that, normal dispensary insurance, marijuana lab testing insurance and other forms of coverage become that much more important the bigger the California marijuana industry grows.

Read more at InsuranceJournal.com

SAFE Banking Act of 2019 Would Protect Banks Working with Cannabis Companies

The amount of liability in the marijuana industry is staggering. Possibly the greatest financial risk of owning a cannabis dispensary, or any business that handles the marijuana plant on a regular basis, is that most cannabis based companies are left with no choice but to work on a cash-only basis leaving them vulnerable to robbery. The House Financial Services subcommittee met recently to discuss the challenges banks are facing by working with cannabis companies and potential solutions. The meeting included discussing the newly introduced SAFE Banking Act of 2019, also known as the Secure And Fair Enforcement Banking Act of 2019.

safe banking act of 2019 and cannabis insurance specialists

While some robberies at cannabis companies involve violence, including one incident in Colorado that left a security guard dead, the greatest threat of robbery may be internal from trusted employees. The temptation when cash money is laying around is often too much to overcome. Dispensary insurance is of the utmost importance with the current banking challenges that cannabis companies must contend with. Cannabis insurance specialists are difficult to come by since most insurance companies steer clear of any business that is associated with a Schedule I controlled substances.

While the House of Representatives may vote on and pass the SAFE Banking Act of 2019 during the current legislative session, the bill will face a much greater challenge passing in the Senate. Senate Majority Leader Mitch McConnell does not support the legalization of marijuana, or anything that furthers marijuana reform, even though he does support the legalization of hemp. Regardless of what happens, S2S Insurance Specialists are here for any cannabis company’s insurance needs as we have attained a clear understanding of the financial risks associated with the cannabis space.

“The conditions are as good as they’ve ever been for legislation to proceed,” said Ryan Donovan, chief advocacy officer for the Credit Union National Association, a trade group that lobbies for credit unions. “75% may be a little high, but [the odds] are better than they were in the last Congress.”

“This hearing is part of an effort to try to generate some momentum in the House of Representatives,” Donovan said. Prospects for cannabis-banking legislation “might be easier to see once we get past the shutdown threat and get into more of a normal legislative environment,” he added.

“The safety of thousands of employees, business owners, security personnel, police officers and community members is in your hands,” Neill Franklin, the Law Enforcement Action Partnership’s executive director, told the subcommittee on consumer protection and financial institutions. LEAP is a nonprofit known for opposing the “war on drugs.”

The ranking member of the House Financial Services subcommittee, Missouri Rep. Blaine Luetkemeyer, argued against the SAFE Banking Act of 2019 and his thoughts were echoed by the chairman of Smart Approaches to Marijuana, Jonathan Talcott.

missouri rep. blaine luetkemeyer discusses safe banking act of 2019
Missouri Rep. Blaine Luetkemeyer

“You really need to address the Controlled Substances Act and its prohibition on marijuana … before any of the proposed changes and safe harbors would be effective,” Talcott said in his testimony. Luetkemeyer made a similar point, saying lawmakers were “dealing with an illegal industry at the federal level” and “putting the cart before the horse” by focusing on the industry’s banking needs.

Until marijuana is rescheduled on the Controlled Substance Act, or completely descheduled, cannabis companies must make sure that their financial risks are covered and marijuana insurance policies are the smartest alternative. We offer CBD product liability insurance, cannabis crop insurance, D&O insurance and cannabis dispensary insurance. Contact Eric Rahn or David Rahn, your cannabis insurance specialists.

read more at marketwatch.com

The Evolution of the Emerging Cannabis Industry

Opinions on the emerging cannabis industry are so numerous that they are beyond my ability to track them. Everyone is either claiming to be an authority on the business of legal marijuana, or are striving to become the authority. The truth is that nobody is a complete authority on legal cannabis. It is still too new of an industry, and the proof is how inconsistent the rules and regulations pertaining to marijuana/hemp/CBD vary from state-to-state, and within each state!  One moment Michigan has a restricted medical marijuana program, the next moment they have legalized adult-use marijuana. How can anyone be an authority, when fragmented state and federal regulations continue to evolve?

You should all know by now the largest barrier to entry into this industry is the Schedule 1 status of cannabis. This particular legal barrier unavoidably looms in our background everyday. Attending B2B cannabis conferences, from smaller more intimate ones such as C-LAB events to massive conferences like MJBiz, I consistently listen to speakers, vendors and attendees bring up the same topics. All of these cannabis conferences serve to educate and communicate, but no matter where I go people still talk about banking restrictions, merchant service problems, taxes being too steep to turn a profit due to IRS Tax Code 280E, inability to engage in interstate commerce and all sorts of marketing challenges. For us of course, it is the barriers to suitable marijuana insurance policies that we focus on the most.

How long does it take for a state regulated body to be funded, staffed, implemented, grow and stabilize? Depending how fast current laws are adopted or changed, it will take a long time and a lot of discussions as to how the cannabis Industry, the federal government and the cannabis approved states will come together to implement best in class licensing and regulations, product quality standards, taxation and enforcement. Through this evolution of an industry, we will witness successes and failures along the way.

Look at Massachusetts, voters legalized adult-use marijuana in 2016, and it took over two years for sales to begin with only two dispensaries allowed to open by December of 2018. Florida has multiple lawsuits filed over unconstitutional medical marijuana laws that do not match what voters approved in 2016. State laws are changing on a regular basis and have not even stabilized in states like Colorado and Washington which began selling adult-use cannabis in 2014 and medical marijuana well before that.

The evolving marijuana industry is full of so many financial and regulatory uncertainties that insurance policies for cannabis companies are not consistent from one carrier to another. Marijuana insurance companies like S2S Insurance Specialists have to stay current with many state and federal regulations. Federal prohibition continues to plague the cannabis insurance industry by preventing it from operating in a free market environment. These restrictions have made most big insurance companies reluctant to enter the cannabis market place, therefore we are restricted to a couple of surplus lines carriers.

Best practices in business are still evolving in the cannabis space. The time for cannabis entrepreneurs to build, scale and stabilize their businesses is now! We have all read and heard about the growth projections of the cannabis industry. Projections that cannabis will represent the next $20 billion industry are probably conservative. We will eventually rival the multi-billion dollar snack, alcohol and pharmaceutical industries. As companies scale up, management teams become the forefront of any successful operation.

Most professionals I have met have pivoted into the cannabis Industry from other specialized professions. Like myself, they see an opportunity to do something new and exciting. We need to bring the best of our skill sets to this very young and emerging industry. Come into this industry with your eyes wide open. The opportunities in cannabis are great, but the competition is fierce. It takes more than just a love of marijuana or the passion of wanting to see the social injustice of marijuana prohibition come to an end. It takes a strong understanding of the fundamentals of business. It takes organization and constant research to understand the next big trend or new state mandated rules.

As cannabis insurance specialists, David and I stay current on industry trends, data points,  cannabis research and the full spectrum of the supply/distribution chain. The biggest problem we all face in this young emerging industry is the lack of credible and actionable data. Like most institutional markets, insurance relies heavily on the data acquired across the industry in order to rate, compare and assess risk. We also follow current industry news and insurance trends in cannabis.

The most recent industry change was the passing of the2018 Farm Bill. It allows for broad cultivation of hemp, not simply pilot programs for studying market interest in hemp-derived products. Its language clearly allows for the transfer of hemp-derived products across state lines for commercial use and other purposes. It also puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law.* Now that hemp will be descheduled, along with hemp derived CBD, hopefully insurance for these products will be more widely available and competitive. There is hope that states will offer state sponsored crop insurance for hemp growers.

Another big trend we are seeing is the need for companies to raise capital for future growth. Many cannabis companies are looking towards the Canadian stock exchanges such as the TSX, VSE and CSE to raise funding. When companies engage in selling shares of stock to the public, there is a greater need for Directors and Officers Liability insurance (D&O). A Directors and Officers Insurance policy protects you as a director or officer of the company if your actions negatively affect the company’s profitability or if the company is sued because of your actions. The policy will pay for legal damages and fees. D&O helps preserve the company’s cash flow against expensive legal bills. These sorts of risks will become even more apparent as the number of cannabis stocks continue to grow and the amount of active investors and traders diligently following these companies hope to capitalize on the market by challenging management and business development goals.

We continue to follow various insurance claims affecting the cannabis Industry. We are seeing claims in the product sector, D&O claims from shareholders, employment dismissal issues and crop/property claims due to the fires on the west coast. California’s gray market persisted for 20 years, but over the summer it became mandatory that any cannabis product intended for commercial sale undergo product safety testing by state certified labs. A Sacramento testing facility that had serviced the industry for years was just suspended for failing to test for 22 pesticides. The cannabis was distributed to California consumers and the recall will cost many companies in legal fees, fines and potentially their licenses while the state courts figure out who is at fault for the lost revenues. Stories like this will hopefully start to weed out the bad actors in the industry.

We highly recommend that management review their insurance policies, policy limits and deductibles every six month to make sure that as your business grows, you are maintaining adequate coverages. Many things change in the course of a year, it is important to constantly manage your risk assessments. S2S Insurance Specialists are dedicated to helping you insure, from seed to sale, all your cannabis, CBD and hemp insurance needs.

Reach out Eric Rahn and David Rahn to find the cannabis insurance policies that are most suitable for your company.

*https://www.brookings.edu/blog/fixgov/2018/12/14/the-farm-bill-hemp-and-cbd-explainer/

Weed | A Guide On Legal Marijuana Products | S2S Insurance

Cannabis advocates, for the most part, are very well versed in the socio-economics of legalizing cannabis. They can tell you historical criminal data, they can talk to you about the health benefits and impacts of the plant along with many other data points. While all that is fantastic, if you’re new to the world of recreational and medical cannabis, you may have some basic questions about what type of marijuana products are out there.

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Let’s be honest, many people are interested in cannabis for its psychoactive effects, but what if you’ve steered clear of marijuana up until this point and know nothing. What do you do? We at S2S Insurance Specialists are not only experienced insurance specialists, but we take all aspects of the cannabis industry seriously as well.  Check out these tips below on how to shop for cannabis based on the experience you believe suits you the best.

The basic marijuana product, the dried and cured buds of the cannabis plant, is now called flower. Dispensaries often display it in glass jars for customers to stick their noses in.

Flower comes in three main categories. Indica, sativa and hybrid. According to stoner tradition, indicas induce a nighttime sedentary effect, while sativas offer a peppier daytime buzz.

While virtually everything available in dispensaries today is a hybrid of some kind, indica became associated with certain observable characteristics like broader leaves, and most importantly, its earthy smell. Sativas, meanwhile, are generally associated with bright smells like citrus and pine.

Each of the three main categories are divided into thousands of “strains” just as there are many varietals of grape. The difference is there is a formal recognized difference between, say, malbec and merlot grapes. But even with the best known marijuana strains – such as sour diesel, OG kush or durban poison – it is largely up to the beholder to determine what a plant is.

Savvy buyers understand that what one shop calls sour diesel, won’t necessarily resemble what another shop calls sour diesel. The defining trait of a sour diesel – a diesel-y smell – is up to the beholder to look for or not, as she wishes. Similarly if the sour diesel isn’t selling, there is nothing to stop a dispensary from renaming it something that will sell better.

Labels are not especially helpful, but that doesn’t mean customers can’t tell the difference between good pot and bad pot. Or, given the abundance of product available in legal places, good pot and even better pot.

Marijuana and many other plants get their smell from chemicals called terpenes. And many connoisseurs look for rich terpene bouquets. Other aromas, Kornberg said, can clue buyers into lower-quality product. The smell of hay can indicate the plant was improperly cured or dried, she said, and is “kind of the worst”.

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As interest in cannabis grows, the demand and market for cannabis related businesses will grow as well. No matter what aspect of the cannabis industry you are interested in, do not neglect risk management while you’re putting together your business plan. Insurance is a necessary component of any business plan and it is no different when starting and running a cannabis related business. Contact Eric Rahn of S2S Insurance Specialists to discuss your risk management strategy.

read more at theguardian.com

CBD And What You Need To Know About it | S2S Insurance Specialists

CBD, there are a lot of questions about what it is, what it can do, and whether it is legal. We’ll help clarify some of this for you to help you make a decision as to whether it is right for you. What is CBD? CBD is officially known as cannabidiol, it is typically extracted from the cannabis or hemp plant. One of the main keys to the extract is that it is not psychoactive because it does not contain tetrahydrocannabinol or THC. Without THC, there is no high. The ability to use cannabidiol without getting high makes it an attractive option for many that seek the medical benefits of cannabis and hemp, but want to avoid the high for various reasons.

CBD, cannabidiol, David Rahn, cannabis insurance specialists, marijuana insuranceCannabidiol oil is steadily gaining momentum in the health and wellness world, because there is evidence that suggests it may help treat a variety of ailments from chronic pain to anxiety. There is some controversy around CBD oil because of the stigma attributed to recreational marijuana use. There is growing awareness about the possible health benefits of this natural elixir.

Until now, CBD has existed in a kind of legal gray area: In many places it is not necessarily legal, but it’s also not illegal. But this month, the passage of the 2018 Farm Bill will remove hemp and CBD from the Drug Enforcement Administration’s list of “Schedule 1” controlled substances, making it an ordinary agricultural commodity and allowing it to be legally sold in all 50 states.

With laws around it relaxing, CBD is going mainstream. Beverage giants like Coca- Cola KO, +2.52% and Pepsi PEP, +0.78% are eying CBD-infused beverages as consumption of traditional soda declines. The market for CBD products is anticipated to grow to more than $2 billion in total sales by 2020. People are using CBD for anxiety, sports injuries, and face serums, and even giving it to their pets.

Cannabis plants contain hundreds of chemical components called cannabinoids, but the two main ones are delta-9-tetrahydrocannabinol (THC) and cannabidiol. THC is an intoxicating substance that interacts with endocannabinoid receptors in a user’s brain, activating reward mechanisms that produce dopamine and get a user high.

CBD does not affect these receptors the same way and, therefore, does not have a psychoactive effect. Like THC, the extract can be consumed in liquid and other edible forms or through a vape pen.

cannabidiol, CBD, dispensary insurance, Eric Rahn, lab testing insurance, who insures the marijuana industryWhile CBD is advertised to treat insomnia, chronic pain, depression, and anxiety, there is little scientific evidence to prove it is effective for these ailments. Cannabidiol may be effective for depression and anxiety treatment, studies on rats have shown, but there’s little research on the effects of the extract on humans.

If you are looking into starting a cannabis related business around cannabis and hemp extracts, your need for a risk management strategy does not change just because the product does not have THC in it. Business owners should reach out to a cannabis insurance specialist like Eric Rahn of S2S Insurance Specialists to help with your insurance needs.

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