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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 Insurance Provides Peace of Mind

S2S Insurance, Eric Rahn, dispensary insurance, marijuana doctor insurance, medical marijuanaAll cannabis related business owners have unique issues and concerns that do not apply to traditional business owners. As a cannabis related business owner the biggest concern is the legality of the product you sell. Marijuana is legal in many states but is a Schedule I drug according to the DEA and is illegal federally. A marijuana business owner has no control over what happens to the legality of cannabis, but they can minimize their risk exposure. Cannabis insurance, specifically property and casualty insurance, protects against property losses and losses that may result from a lawsuit due to negligence.

Property and Casualty insurance can be broken into two types of coverage in one. The property piece of the policy will protect the assets of your business if they are damaged by a random event such as a storm, theft, or vandalism. The casualty piece of the policy will cover the business if you’re sued for negligence whether it’s you the business owner or one of your employees. If someone slips and falls in your dispensary and requires medical attention, that person might file a lawsuit against your business for damages. Losing a negligence case in court could mean you are liable for for tens or hundreds of thousands of dollars. With this form of cannabis insurance you’ll be covered not only for the damages but also the attorney fees.

S2S Insurance, Eric Rahn, cannabis insurance specialists, marijuana insurance, weed, who insures the cannabis industryA Marijuana grow operation in Southeast Portland caught fire twice overnight. The first time was Tuesday evening, the second time was early Wednesday morning. The second fire destroyed the business’s storage and office warehouse building. Photo courtesy Portland Police Bureau

“Obviously re-kindle is always a question we want to know for ourselves if there is anything we could’ve done or should’ve done differently, but then we have to do our due diligence for the occupants in the business owners and make sure there wasn’t anything nefarious going on,” said Cpt. Louisa Jones of Portland Fire and Rescue.

The grow operation which is housed in a warehouse next door was not damaged, just the office and storage area.

In the case of property damage there are other concerns that business owners have to manage. Depending on the amount of damage from a storm, fire, or vandalism, your business may have to cease operations until the damage can be assessed and repaired. If operations are suspended, this will undoubtedly negatively impact your cash flow. Fortunately, cannabis insurance covers operations interruptions. Put another way, if you have to stop running your business for a duration of time due to circumstances out of your control, then you are eligible for compensation covered by your policy. S2S Insurance can help you assess your level risk and plan accordingly. “What”s your tolerance for risk? How much can you afford to lose? Are you properly covered?” – Eric Rahn, CEO S2S Insurance. Knowing your level of risk exposure and planning for those risks can provide peace of mind in an industry that keeps business owners concerned about what is coming next. Contact S2S Insurance today to determine the level of cannabis insurance your business needs.

read more at katu.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

S2S Insurance Helping Cannabis Businesses Protect Their Property

The legal cannabis industry in the United States is a new market and filled with uncertainties and risks. At S2S Insurance we aim to help cannabis business owners understand those risks and plan appropriately. For cannabis business owners, one of the most complex issues they face is being forced to deal in cash. Due to the Schedule 1 classification of cannabis by the DEA, cannabis business owners can not easily open deposit accounts and work with digital forms of payment like traditional businesses. This inability to safely deposit cash in a bank creates multiple risks that every owner must consider.

 

While it is impossible to be able to predict what may happen in the future, S2S Insurance and our agents pride ourselves on being able to look at all available data and use that information to put a strategy together for our clients. At S2S Insurance a major concern for any of our clients is how they protect their property. Because our clients are forced to work with large amounts of cash there is a greater risk for vandalism, robbery, break-ins, and physical damage to property among other risks. A cannabis business owner has to assume that at some point criminals will try to illegally gain access to and steal any cash or product on site.

This grievous risk to life and limb is not exclusive to this unfortunate man. His episode is just one of many frightening and shocking events that are occurring throughout the emerging legitimate cannabis landscape. Marijuana-related businesses (MRBs), even after being legally established under state law and operating under strict regulations and oversight, nonetheless cannot open a simple deposit account at a bank owing to inconsistent, conflicting federal regulations.

Under the current federal prohibition of marijuana many banks, fearing potential repercussions, simply refuse to do business with marijuana growers, extractors, distributors, and sellers— even ones that operate legally in their own respective states. As a result, MRBs are forced to operate on a cash-only basis, making them prime targets for robberies, kidnappings, and extortion.

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The question on your mind by now is likely, how can S2S Insurance protect my cannabis business from robberies or vandalism? The truth is, we can’t, we as a cannabis insurance agency can’t stop a crime or instance of peril from happening to your property or your business. What S2S Insurance can do is help mitigate the risk if it does occur. As an insurance agency, S2S Insurance agents will review all relevant data with you, the business owner, and form a risk mitigation strategy. If the unfortunate does occur you can take some comfort in knowing you have an insurance policy that can cover a portion if not all of the damage after the deductible. No matter what risk management strategy you choose for your specific business, policy limits will apply. It is critical that you review your policy with your agent and attorney to understand coverage and limits. S2s Insurance has knowledgeable and experienced agents ready to help you form a risk management strategy for your business today.

read more at jdsupra.com