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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.

read more at businessinsider.com

Cannabis Business Property Insurance Protecting The Bottom Line

Making the decision to invest in a marijuana related business takes a big investment of time, energy and money. Early in the process of making those investments, cannabis business owners need to ask themselves how do they plan on protecting those investments. One measure of protection begins with business property insurance. Whether you own a marijuana dispensary, a cannabis testing lab, or grow operation, business property insurance can protect the items and space you need to keep your business running.

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Marijuana related businesses face unique challenges and risks because of the products being sold and their relationship with the retail market. Marijuana related business owners are at serious risk of vandalism. Someone could try to break into a dispensary or a lab and could damage or destroy computers, monitors, display cases, storage areas, merchandise and more. There is also the risk of theft of those same items. A cannabis lab which may have expensive high end equipment would especially want coverage for stolen computers or tablets. A dispensary is going to want coverage for stolen marijuana, edibles, or other marijuana related items that might be found in a dispensary. Aside from vandals and thieves there are also natural disasters. Every year across the country there are news reports of terrible storms and devastating fires that cost property owners billions of dollars. We can’t predict when and where a storm or fire is going to strike, but as a cannabis business owners, there is no reason to not be prepared.

The Carr wildfire in California has likely caused an estimated $1.5 billion in insured losses to date, foreshadowing another major wildfire loss event for insurers in the state, according to a report by Moody’s Investors Service Inc.

The wildfire has ravaged parts of Shasta County in or near Redding in Northern California, caused six deaths, and left substantial property damage to date, according to the property/casualty sector report published by the New York-based ratings firm on Thursday. The fire has destroyed 1,555 homes and commercial structures, damaged an additional 240 homes and structures, and burned about 121,000 acres so far, according to the California Department of Forestry and Fire Protection.

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At S2S Insurance we work with each client individually to identify their risk management needs and set up a plan that makes sense for each individual cannabis business owner. For cannabis business owners we look at location of the business, demographics, crime data statistics, annual weather patterns and additional data which help to formulate a sensible plan for your business. As a cannabis business owner, you don’t want to be caught unprepared when a big storm hits, or when a wildfire breaks out. You as a business owner have no control over if someone wants to break in your windows and vandalize your place of business. We can’t control the unknown but we can prepare for all of those things providing peace of mind and a tangible way to recover when disaster strikes. All policies are subject to policy limits and should be reviewed with an experienced agent and your attorney.

read more at businessinsurance.com