Do I need a safe for my Marijuana business?

Do you need a safe? If you are not insuring your products for theft then the insurance company does not require an 800lb safe with a one hour fire rated bolted to the ground. The underwriters came upon this size after studying years of robberies of Cannabis stores. A safe’s job is to slow down the bad guys. Are all safe’s created equal? Here is a quick educational video. https://youtu.be/ltK-bDbADa8 . Just because a safe’s door looks big, doesn’t mean it keeps your products safer. There are a lot out there that have skinny metal and sheetrock.

In Washington State, I talk with Dave Giussi about quality safes. He is the owner of Graffunder Safe and Vault and understands the industry. I would not feel comfortable with $500,000 worth of concentrates being stored overnight behind just sheet metal in a locking file cabinet. Contact Dave if you want good protection for your products.

Here is why a safe is bolted to the ground: https://youtu.be/B8ViUdd-2LM

Another box store safe: https://youtu.be/BjHnklj6PAs

Products Liablity & Marijuana Insurance

Products Liability is a huge question for a business owner in today’s market. Yes, it is expensive however with the average cost of defense running at $500,000, it becomes smart money. Recalls and lawsuits are expensive. Yes, there are cases that are cheaper and plenty that are more expensive. As you are thinking of protecting your investment, think of how many product recalls occur in the US on a weekly basis. Did you know that there are websites dedicated to this? Most of us have received at least one notice in the mail concerning our cars. Why would we think that a fast moving industry such as the marijuana industry would be different?

If you are a dispensary or a retail store then you should consider adding it to your store’s insurance package. When there is a suit, everyone possible gets named and it usually takes a lawyer, money and time to get untangled from a lawsuit. Our first run in with this was the Mirth Soda in three of the legal stores in Washington State. Who do you think would be named in a lawsuit if a bottle exploded in a customer’s hands?

If you sell Vape Pens and do not have Product’s liability then you are in a risky situation. The batteries can catch fire and the US Department of Transportation has limited them on flights in the US. There have been instances where Vape Pens have exploded. Be a Captain of Industry and know every step of production underneath your operation. By understanding where your products come from and how they are insured/treated only promotes your long term success.

Grower and processors, the first chance that you can cover your products, cover them. The Marijuana industry came out of the shadows with little regulation and oversight. Do you follow good manufacturing procedures? When was the last time you checked the chemical list for banned substances? Is your equipment being cleaned between runs of different growers or are you blending products? Being careful also includes being careful about what you bring in to your product stream.

There have been policies that I have refused to sell because of clauses against Cannabis/Marijuana’s product liability. A client buying a product has an expecation of the product being safe and if they find out otherwise then you are looking down the wrong end of a lawsuit. You never know who is going to try to take a short cut below you on your product stream and you don’t know how someone is going to use your product when you sell it. If you want to protect your business then you have product liability.

Can my kids get poisened from Halloween candy?

Happy Halloween!! As a dad and a professional in the Cannabis Insurance Industry, I get a flood of scary things about the creepy neighbor down the street poisoning my 9 year old. Last year it was from the newly licensed Recreational Marijuana Stores in Washington and Colorado. It appears to have dropped off the social media darling list for now but I think that the week is just starting.

We have Police Department.
We have Forbes.
Snopes talks about it.
Wikipedia talks about it.

Let’s skip beyond the obvious that Edibles can be expensive or who would think of doing that to a kid doing Trick-Or-Treating. How many kids have been poisoned over the years from Halloween?

I am going to go with a Professional, Joel Best, a sociologist at the University of Delaware who specializes in candy tampering legends. Best looked into all the newspapers published between 1958 to 1983 and found fewer than 90 instances that might have qualified for actual candy tampering. Of those, he found five child deaths initially thought to be caused by homicidal strangers but none were investigated. For example, one was a child eating uncle’s heroin stash. A child is more likely to be injured by being struck by a car than finding candy laced by strangers.

So when Halloween rolls around have fun. Send the kids Trick-or-Treating making sure that they can see and be seen. Check the candy for anything damaged. Have fun because the odds are favor that you will get sicker from all the sugar than anything drug laced. Don’t believe the hype and have fun. If you want to talk about insuring a Cannabis business then give me a call.

How do I start a Marijuana Business?

These days it seems like everyone is trying to find out how to start a marijuana business. Some call it a ‘Green Rush’ others just smart business. After all of these years working around the industry, I have developed some tips:

1. Walk away from the $9,000 lawyers and talk to an assortment of experts. One of the best is the 420college. They have classes in a bunch of states and assemble some of the best people that I have met in the industry. It is also at the most reasonable prices with the ability to come back.
2. Select a specialized accountant. The 280E is no joke. Find someone that will work with you and not just take information from you. Al Capone was snagged for taxes don’t be that person.
3. Select an insurance expert. Find someone that is current in the industry. You shop for experts, let your experts shop for products. They can even start advising you on underwriting pitfalls such as protecting your marijuana in a particular size of safe so that it can be insured.
4. Select a legal expert. Find someone that understands the laws. For example in Oregon there are some areas that will not allow a marijuana business.
5. Join an association and find out what associations your experts are in. Not only do some associations you get benefits, you also can meet other professionals and educate yourself. In Washington, I recommend checking out Coalition for Cannabis Standards and Ethics as they are a good mix of benefits, lobbying and networking.
6. Build a business plan and understand product flow, people flow and cash flow. Do not bank on product selling itself and that bad things won’t happen to you. I have seen dispensaries shut down for Robberies and wind wiping out crops.

This is a business like any other with thousands of people wanting to make money. Many of which will not set themselves apart by doing the hard work and learning everything that they can. It is not for everybody. Good luck, I look forward to seeing you out there.

Lloyds and Marijuana Insurance

I get questions about Lloyds and Insuring the Cannabis Industry on a regular basis. It can be from a new client in Colorado to an old one in Washington asking about renewals. (The two questions that I have had this week).

There are actually quite a few articles on the subject talking about how horrible this event is however I have found the experience refreshingly old school. I tend to refer people to industry Articles about Lloyds leaving the business.

Today was the first time that I got a hard copy letter from the carrier stating the end of Lloyd’s and Marijuana Insurance. Check it out:

It had little effect for my clients because the previous February, I switched over to Hannover as a primary carrier. I work with multiple companies. It is an ongoing process to see what company can do for different categories of clients. I have literally told client’s if they find a company that is better than the one I am using then let me know as I am more than happy to add on to my offering.

Insurance has always been about the customer. Picking good insurance involves picking a good broker.

Myth: Marijuana Insurance is not consumer friendly....

You can shop for Insurance for your Marijuana Business, however the approach is different. Most people are used to getting insurance for their home or auto. There is an Independent Agents, Farmers, All State, Progressive, etc… on every corner and if you go to the internet more choices. You can have a dozen different quotes from five companies in under an hour. What happens when all those different choices have only three Companies to choose from?

You create Jam and not in a tasty, good way. It wastes your valuable time as a business owner and it can cost you money. If you want to minimize your efforts and maximize your results for insurance then this is how you do it:

You shop for the broker. Yes, you want to apply some old school methods and build a relationship. By spending five minutes with three or four different brokers, you can save you self a lot of headache and your business a lot money. Here are some questions to ask:

1. How well do you support the Cannabis Industry? Are they a member of a trade association? (Look for someone that invests into your industry instead of extracting from it.)
2. Is this a normal product line? Does the agency have people dedicated to it or do they do one or two policies a year? (You are looking for someone that has current knowledge of the industry.)
3. How many companies do you work with? Are they directly connected to a whole sale insurance company or do they go through multiple brokers? (Insurance companies can add fees pay attention to the quotes as fees must be spelled out what dollars is going where).
4. Do they bring anything else to the table? Can they help with Health Insurance or insuring your transportation vehicles? Do they know Finance Companies? (A broker that has successfully worked the Marijuana Industry will have valuable contacts and resources that can improve your business.)
5. Do you have discounts? (Yes, there are a few of us that have discounts available).
Yes, I do get quick requests of ‘send me an app’ or how much for ‘$1 million in liability’. If you want a inexpensive policy that covers what you think it covers then spend the five minutes and talk with your Broker. Ask your current broker a few of those questions. You are a business owner, shop for a broker throughout the year.

You can always make the change in the quoting process or that 30 day renewal time. The broker of record letter looks like the following.

It is no big deal to get the policy that you want for your Marijuana business, at a good price. Just go a little old school and shop the broker not the policy. If you send a request to my website, I do ask questions.

California Marijuana Insurance

I have been running Insurebud for a few years now and have had a few requests to expand coverages into other states by friends in the Cannabis Industry. I got in this business to help out a few friends in the Seattle area and get them some inexpensive insurance to cover their dispensaries. With out advertising, I recieve a couple of requests a year that I have had to say no as I focused on Washington State.

We have two rules about insurance.

1. It has to be affordable.
2. It has to be usable.

This changed about a week ago, I had a professional call me with a large enough operation in California, that I can afford to expand. When you are a small business, everything takes time and money. If you don't spend money then you spend time. Effective 07/23/2015 Insure Bud is open for business in California.

I am looking forward to finally being able to bring information to the 420 College in California. George Boyadjian has been a huge influence in gathering professional people and teaching about this industry that it would be awesome to see him on his home turf. If you haven't attended one of his events then you are missing some of the best training that I have ever encountered for the Marijuana Industry.

If you are expecting me to use a Lloyds of London policy then think again as we moved from using them last February. In May there was a memo from a Lloyds executive stating that they were going to stop writing new policies for the Cannabis Industry and renew on a case by case basis. To build an industry, I only use products that support the industry. In six months the client responses have been 100% positive.

I have picked a rockstar of whole sale insurance company that is continually improving the product. I have secured a premium loan company that is providing good rates so the entire premium does not have to be paid up front. I have also found little things along the way such as Packaging companies, Point of Sales Debit Cards and other secondary industries that can improve your access point and your products. If you are profitable then my job is well done.