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.


Marijuana Law Professional Discusses the Growing Need For Cannabis Coverage

marijuana law professional discusses the growing need for cannabis insurance coverage

The demand for cannabis insurance specialists is increasing as general awareness spreads about medical marijuana and the legalization wave continues across the country. One marijuana law professional, Ian Stewart from Wilson Elser Moskowitz Edelman & Dicker LLP, has been speaking at conferences frequently discussing the growing need for cannabis coverage.

Stewart has talked about the need for cybersecurity insurance in the cannabis space considering the vast amounts of data that is being collected from seed-to-sale programs and medical marijuana programs. He has also touched upon the potential of cannabis product liability claims from untested or improperly packaged marijuana products. In an interview by the Insurance Journal, Ian Stewart expounded on some more cannabis business related risks he is foreseeing.

cyber security is a significant risk for cannabis companies and marijuana insurance is becoming even more important

Insurance Journal: What sort of unique or interesting claims do you think that we’re seeing, expect to see, or are we seeing from these cannabis coverages?

Stewart: However, I think that the sort of unspoken danger that a lot of certainly the licensed operators don’t appreciate is the risk of consumer class actions. You know, basically there are cases where a consumer will come in and they’ll by a product that is technically adulterated or mislabeled or contaminated in some way, maybe they’re violating some state regulation, and the state cannabis regulations are really onerous. It’s really hard for operators to be fully compliant.

So, the trick is these lawyers will find a product that is in some way violating a state regulation and then file consumer class action under state consumer protection laws. Frequently those are uninsured or under-insured claims, and they’re dangerous because they have fee shifting where the attorneys can get their attorney’s fees, there’s statutory damages, disbursement of profits. They’re pretty dangerous, and we’re starting to see those get filed now in California and elsewhere.

Insurance Journal: You mentioned something in your talk (at PLUS) about doctors looking for coverage for prescribing marijuana and that you expect that to pick up. How do you see that picking up? Where do you see these doctors going to find coverage, and what sort of coverages are they going be looking for?

Stewart: We’re seeing more and more issues of interactions, you know, overlay where in the past it may have been a patient who just has a drug history of marijuana and cocaine. But now that patient may be adding CBD or marijuana to their panel of medications, and maybe there’s overlay with mental health issues or substance abuse. So, it can be really difficult for physicians now to tread those waters, get informed consent, adequately advise their patients, and in some cases even offer CBD or marijuana instead of opiates, for example.

While access to traditional forms of insurance is a little more limited for cannabis business professionals, as long as you connect with the right cannabis insurance specialists, very good alternatives exist for you. Contact Eric Rahn or David Rahn of S2S Insurance Specialists to find out more.


Seeking State Marijuana Grow Licenses Highlights the Need for D&O Insurance

marijuana grow licenses are hard to come by and one particular lawsuit in las vegas shows the need for cannabis insurance

The battle to win marijuana grow licenses in states like Nevada have resulted in some very aggressive legal challenges. One such example in Las Vegas highlights the advantages of having cannabis D&O Liability Insurance coverage.

Michael and Robert Frey are joint owners with Verano Holdings of a 50,000 acre cannabis cultivation and processing facility in Nevada called Naturex which runs the Zen Leaf dispensaries in Las Vegas. Verano Holdings is one of the largest cannabis companies in the country with marijuana grow licenses in multiple states.

According to case filing, the Frey brothers are saying that they completed paperwork for additional grow licenses in Nevada and gave it to Verano to submit. Verano is accused of using the paperwork completed by the Frey brothers as a reference to then completing separate paperwork which they filed with Nevada to get their own licenses independent of the Frey brothers.

directors and officers insurance is important in case your cannabis company gets sued

Verano CEO George Archos said the company is aware of the complaint but has not had an opportunity to review the claims.

“Based on what we know of the allegations, however, we do not believe the complaint has merit,” Archos said in a statement to the Las Vegas Review-Journal. “We intend to defend aggressively against these claims.”

“Defendants claimed the applications would be incomplete without locations specified in the application materials — albeit an incorrect analysis and unsubstantiated excuse proffered by Defendants — to which plaintiffs reasonably relied on such misrepresentation at the time,’’ the lawsuit states.

Verano “intentionally and maliciously usurped the opportunity available and belonging to Naturex and instead utilized the Naturex materials for its own entity defendant Lone Mountain to apply without including plaintiffs and without informing plaintiffs of defendants’ intended course of action,” the lawsuit states.

The actions of officers and directors of any company can lead to lawsuits that D&O Liability insurance is intended to protect a company from. Marijuana legalization is spreading fast and investors are clamoring to get a foot hold so they can prosper from the quickly growing industry. Finding the right sort of liability coverage in the cannabis can be tough though, so get in touch with David Rahn or Eric Rahn of S2S Insurance, your cannabis insurance specialists, to find out your alternatives.


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.


Landlords Need The Right Insurance Before Leasing to Cannabis Grows

All sorts of insurance is necessary for cannabis grows, but landlords leasing out to a marijuana grow facility also need to consider whether they have the right sort of marijuana insurance coverage before signing contracts. Due to the illegal status of marijuana federally, being involved in a business that touches the actual plant violates many contracts.

There is a lot to consider when accepting cannabis grows as tenants. Liabilities from the fire hazards involved with all of the lighting and energy used is a very real risk. If the cannabis grows are also extracting concentrates like cannabis oils, a lot of volatile and heavy equipment is often used.

understanding the financial risks of having cananbis grows as tenants

Typically, a landlord has already entered into many business relationships and documents pertaining to its property, years before contemplating leasing to a cannabis facility. The landlord has likely executed financing and insurance documents, which may be jeopardized by a cannabis lease. As discussed below, a landlord may inadvertently breach provisions in those documents by executing a lease for a cannabis facility.

The loan documents were probably executed well before it was ever envisioned that marijuana (whether medicinal or recreational) would be legal under various states’ laws. Those documents may very well contain a provision noting that the landlord/borrower will not use the property in connection with any illegal activity. As the cultivation and use of marijuana are illegal under Federal law, the mortgagee has an argument that leasing to a cannabis facility automatically breaches the loan documents.

Another possible concern relates to insurance policies. The landlord will generally hold various types of insurance policies related to property damage and liability. Those policies very likely have language excluding or limiting coverage for illegal or non-permitted activities. Therefore, those policies should be thoroughly reviewed and modified through endorsement to ensure full and adequate coverage.

If you are considering taking on cannabis grows as tenants, reach out to S2S Insurance. Eric Rahn and David Rahn stand by to address any questions and make you aware of your alternatives as a landlord to a marijuana grow.

Read more at The National Law Review

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.


Medical Cannabis and Tips On How To Use It

S2S Insurance, Eric Rahn, marijuana insurance, medical marijuana dispensary insurance, marijuana lab testing insuranceThere are a number of different reasons people are happy to see views on cannabis change. Some people like the idea of being able to use the plant for recreation without having to worry about breaking the law. Other people see the potential financial boom that could come from legalization and want to be in on the rush before the rest of the investing world catch wind. There are also those who see cannabis as a medical wonder drug. Medical cannabis has been shown as a possible aid to a number of different ailments and medical problems. Legalizing medical cannabis provides an option to people that want to try non traditional medicines to help with their various medical issues. Many states that are legalizing medical cannabis have strict rules in regards to access. There are also a number of things a new medical cannabis user should know before going to their local dispensary. Here are some tips for those new to medical cannabis.

For starters, always make sure to bring your medical cannabis card with you when going to a dispensary. In states where patients must register to be able to obtain cannabis via a dispensary we highly recommend that you keep your identification card with you at all times. No dispensary in places where registration is required by law, will sell any cannabis to anyone that does not have the appropriate credentials. In fact, you won’t even be able to get through the front door.

Also, once you have your card do your best to avoid delaying having it renewed. Since most locations where medical cannabis is allowed require that you make a follow-up appointment with your doctor in order to re-register, you will want to plan ahead of time in order to avoid any lapses in coverage that could potentially leave you without access to your medicine. We would recommend beginning the renewal process at least 30 days out from your card’s expiration date to hopefully sidestep any snags.

Be sure to do your homework before you even go to the dispensary for the first time. While your friendly local budtender will be happy to help with any questions that you may have, it is always a good idea to do some research with regards to what type of cannabis strains and/or products would work best for the condition(s) that you are looking to treat. This way you will be well prepared for your first dispensary shopping experience, making it easier for everyone involved. If the dispensary you choose has a website, be sure to check it out as most will have at least some of their inventory available for you to peruse ahead of time.

S2S Insurance, Eric Rahn, cannabis insurance, medical cannabis, dispensary insurance, marijuana product liability insuranceIf you are looking to get into the cannabis business and you think that medical cannabis is the way to go, don’t forget about cannabis insurance. States have strict rules regarding testing, labeling and who you can sell to. It is not only important to know these rules but protect your cannabis business with a marijuana insurance policy in case something out of your control happens and your faced with sanctions from a state agency or a law suit from a disgruntled customer. Eric Rahn and the professionals at S2S Insurance Specialists can help you put together a risk management strategy to protect you and your cannabis business investment. Contact them today!


Get Out and Vote for Marijuana Reform

Marijuana legalization efforts here in our home state of Florida and throughout the United States has triggered a paradigm shift in both policy structure and the perspectives of the masses. On the political side, the legalization of marijuana is now a social injustice, medical and economic issue. On the business side, massive markets such as the pharmaceutical, alcohol and tobacco industries are all watching closely as a rare financial threat to their industry has suddenly appeared. The growth projections of the cannabis space has many entrepreneurs eyeing the opportunity as well. For the people, the legalization of marijuana means potential clemency to loved ones serving time for nonviolent marijuana crimes, it could mean expunged records and also job opportunities as well. Going out to vote this November for marijuana reform means very little about the recreational use of marijuana and everything to do with improving the quality of life here in America.

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Andrew Gillum

Here at S2S Insurance Specialists we identified early on that the cannabis industry is vulnerable to nearly every financial risk. As the industry moves closer to the mainstream and further away from the stigma of being a gateway drug, its evolution into a legitimate industry makes marijuana insurance essential. As an example of shift in perspective, here in Florida we saw a surprise candidate win the primary for governor, Tallahassee Mayor Andrew Gillum. He is campaigning as an advocate for legalized adult-use marijuana throughout Florida, among many other issues. In 2016, 71% of Florida voters approved a broad legal medical marijuana program, more than any other state so far. The new medical marijuana law was intended to open up access to a wide variety of cannabis products for Floridians suffering from a myriad of conditions. State legislators have done everything they can to slow down the growth of the industry since then, and little to correct the social injustice associated with marijuana prohibition. They have continued to strip the ability to vote from roughly 1.6 million convicted felons that have served their time already. Many of these convicted felons served time for nonviolent marijuana related crimes.

If we look over to the west coast, states like California, Colorado and Washington have embraced marijuana legalization and are major influencers for the rest of the country. Many of them have already begun the hard but necessary work of expunging the records of thousands of people convicted of marijuana related misdemeanors. California is the 5th largest economy in the world and despite federal threats, they continue to embrace cannabis legalization and will likely become one of the main hubs for marijuana around the world. Currently the marijuana industry is valued at about $10 billion here in the US and according to BDS Analytics it is projected to be worth nearly $50 billion by 2027. If those projections prove to be correct, marijuana will rival the alcohol and snack industry. At that sort of scale marijuana business insurance becomes as essential as it would be for any major industry. In order for the industry to reach these levels, it is likely that the east coast will need to embrace cannabis much like the west coast. We have seen Massachusetts and Vermont legalize adult-use marijuana and the commercial sale of marijuana is set to start very soon in Massachusetts. Both New York and New Jersey are working on bills to legalize recreational marijuana as well.

If we look at our nation as a whole, legalized cannabis impacts the lives of our military veterans, schools, the banking system and absurd federal taxes due to IRC 280E. Many of our military veterans depend on the VA Healthcare System which falls under federal law, so as a Schedule 1 substance the VA has refused to even acknowledge the testimonies of countless veterans claiming that marijuana has helped them re-acclimate to life at home as they struggle with conditions such as PTSD and chronic pain. Children struggling with chronic seizures from conditions such as epilepsy have come to depend on CBD products to provide them with relief and allows them to attend school. However, most public schools around the country will not permit the medicine on school grounds due to its Schedule 1 status. Chicago Governor Bruce Rauner, once a strong opponent to legalized cannabis, signed Ashley’s Law earlier this year allowing students with medical marijuana cards to use medical cannabis on school grounds. The only way these sorts of progressive policies spread to other cities and states around the country is if the people make their voices heard in the ballot box.

Vote for marijuana reform, eric rahn, cannabis insurance specialists, s2s insurance, cannabis insurance, cannabis testing facility Cannabis dispensary insurance may be the most important form of risk mitigation due to the banking restrictions marijuana companies face. Banks are nervous that if they accept deposits from marijuana dispensaries, the federal government will see it as money laundering. The end result is that they have to keep much of their revenue as cash stored in vaults which leaves them vulnerable to robbery from both external and internal sources. It also makes filing taxes that much more difficult since they do not have the benefit of bank record keeping. The additional paperwork is incredibly time consuming. Since marijuana is a Schedule 1 drug, marijuana sales are seen by the federal government as the trafficking of a controlled substance which means IRC 280E comes into play disallowing cannabis companies to write off normal business expenses. Many cannabis companies are forced to use GAAP cost accounting due to these restrictions making it even more time and resource intensive. The pioneers of the marijuana industry have elected to take on far more challenges than any traditional entrepreneur.

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Ron DeSantis

We have clearly outlined the relevant and meaningful reasons to get out in vote this November on the issue of marijuana legalization. The lines have been drawn in the sand for the most part. You will either be voting for marijuana reform or for continued prohibition. Here in Florida the general election takes place on November 6th and it is clear that if you vote for Andrew Gillum, you will be voting to fully expand Florida’s marijuana law to allow anyone 21 years of age or older access to marijuana regardless of medical conditions. If you vote for Ron DeSantis, you will likely see Florida continue to work with its current medical marijuana program much the same way as Governor Scott has managed it. On the ballot will also be Amendment 4, Voting Rights Restoration for Felons Initiative, which if approved will grant the right to vote again to the 1.6 million convicted felons that have served their time here in Florida. If passed, this amendment could significantly affect the outcome of future elections. For a full list of who is running in what district and what their stance is on marijuana legalization, please reference NORML’s FL site here.

vote for marijuana reform, end marijuana prohibition, Eric Rahn, s2s insurance, cannabis product liability, marijuana insurance, cannabis dispensary insurance

Wherever you may be around the country, this November may represent one of the most critical elections in US history. The current war on drugs promotes violent encounters between our law enforcement and the participants in the illicit marijuana market, along with harsh life changing penalties. The new proposed version of the war on drugs promotes the elimination of the illegal market through regulation of cannabis, much like we did with alcohol almost one hundred years ago. Most violent crime associated with marijuana is proliferated by prohibition. While marijuana’s status here in the US hangs in the balance, the risks for the industry become more apparent and furthers the need for true cannabis insurance specialists. How long can we allow this market to remain unregulated at the federal and state level? So, go out and vote this November and know that your vote may count more now than ever before.

Cannabis Cash Creates Threat For Cannabis Business Owners

The cannabis industry is growing year-over-year as individual states legalize the plant. The industry is growing because of legalization, but also because of market demand. People are spending their hard earned cash on cannabis every day, which therein lies the problem. Cannabis cash is not accepted by most financial institutions and leaves cannabis business owners with few options on how to deal with the surplus of cash. When we reference cannabis cash, we are speaking directly to the actual printed currency used in transactions. Because financial institutions are beholden to federal law, most financial institutions frown upon participating in any transaction that involves the exchange or use of cannabis cash.

s2s insurance, eric rahn, marijuana insurance, dispensary insurance, lab testing insurance, cannabis cashAs long as the federal government views cannabis as a Schedule I drug along the lines of heroin and cocaine, financial institutions are at risk of being audited, fined, and possibly shut down for violating federal law if they partake in any transactions using cannabis cash. At S2S Insurance we see the accumulation of large amounts of cash problematic for a number of different reasons. “Cash Only” businesses invite criminal activity because criminals have an opportunity to obtain a large amount of cash that cannot be traced and can be used quickly to avoid capture. Cannabis business owners become targets for breaking and entering, robbery, and vandalism. An attempted robbery whether successful or not can leave a great deal of property damage, from broken windows or doors, to broken equipment, display cases, vaults or point of sale devises. That type of damage is costly to any business owner, not just those in the cannabis industry.

The marijuana business is booming in the US. According to a report from the investment bank Cowen, legal marijuana is set to hit $75 billion in sales by 2030, putting it on par with soda consumption. Marijuana cultivators are now listed on the NASDAQ, have former politicians on their board, and are backed by heavyweight investors like Leon Cooperman.

But for many big institutions, the risks of banking and lending to the cannabis industry under the current federal mandate just aren’t worth it, especially with all the extra paperwork and scrutiny it can generate.

“For cannabis businesses, this means that access to the basic financial products like checking and savings accounts can be elusive,” John Hudak, a senior fellow at the Brookings Institution who studies issues pertaining to marijuana legalization, told Business Insider.

s2s insurance, eric rahn, marijuana insurance specialists, liability insurance for marijuana, dispensary insurance, cannabis cashTyler Beuerlein, a VP at Hypur, an Arizona-based fintech startup that acts as a middleman between banks and cannabis companies, told Business Insider that he believes there are “less than 30” banks willing to do business with the booming cannabis industry in the US.

That means the costs of doing business and remaining compliant with the byzantine patchwork of state and federal laws guiding the cannabis sector are much higher than in any other industry.

Every cannabis business owner that has the “cannabis cash” problem, should take the first step in protecting their business by getting cannabis insurance. Standard insurance polices will not be enough because of the uniqueness of the cannabis industry. Cannabis business owners should be working with experienced cannabis insurance specialists like Eric Rahn of S2S Insurance, to help determine the right risk management strategies for their business.


How S2S Insurance Can Help Cannabis Testing Labs

At S2S Insurance we cover more than just marijuana dispensaries, and cannabis grow operations. S2S Insurance covers a multitude of facets in the cannabis industry, including cannabis testing labs. As cannabis use moves from the illicit market into the mainstream retail market, state legislatures are requiring higher standards for the cannabis that makes it to market. Each state varies on what the regulations and requirements are for testing and results, which is why it is important cannabis businesses owners review the regulations with an attorney.

S2S Insurance Insures Cannabis Testing Labs Contact Us Today

S2S Insurance insures cannabis testing labs

The legal cannabis market is big business and cannabis business owners can potentially see big profits once their products clear the legal hurdles. While there is a great deal of pressure on the cannabis business owners such as the dispensaries and the growers, there is also a great deal of pressure on the testing labs. The cannabis testing labs in each state or pressed with having professional, reliable, consistent staff responsible for testing the various cannabis products for market. While cannabis labs are staffed with trusted professionals there is potential for a mistake. California for instance has strict testing requirements that take time to complete. If the labs make a mistake, file an issue on an incorrect report, or omit some form of critical information, the results could be devastating to the industry in that state. A mistake in the lab could cause production delays, could result in a recall, and possibly even a class action lawsuit. If a testing lab is the cause of any of this due to an error or omission, that lab may be liable for fines and damages.

One in five batches of marijuana has failed laboratory testing since new state safety requirements kicked in July 1, according to data from the California Bureau of Cannabis Control. Failures have been triggered by inaccurate labeling or contamination from pesticides, bacteria or processing chemicals.

Those testing requirements and results have left some retailers with severely limited inventory over the past few weeks, as cultivators and product manufacturers scramble to get compliant products to market.

S2S Insurance, who insures the marijuana industry, liability insurance for cannabisThe new testing requirements have also created backlogs at busy labs. The state has licensed just 31 testing labs, most located in Northern California, and many of them aren’t yet taking customers. As a result, Rinella said cannabis safety tests are taking between one and two weeks.

As previously stated, S2S Insurance can handle all of your cannabis business insurance needs whether you are a dispensary or a cannabis testing lab. If you own a cannabis testing lab it is crucial to insure against liability and professional liability. Put another way you should look for coverage against liablity incurred as a result of errors and omissions in performing professional services. The members of your staff are trained professionals and in some instances may be licensed, which means they are held to a higher standard. Due to the higher standards attributed to your staff if they were to commit an error, there may be potential for a professional liability claim. As always review your policy with one of the experienced agents at S2S Insurance and with an attorney as coverage limits do apply.