Washington, Oregon, Colorado and California; what do they have in Common?

I think that I am done expanding for the season. After years of working in Washington State and having countless requests, I added Oregon, California and Colorado. If you are in another state, talk to me as it costs several hundred dollars and time to add a state. I don’t want to be adding fees and I like keeping the client’s costs low.

The Marijuana Industry and the Insurance Industry has a fascinating relationship. Insurance rates are built on history and known information whereas Marijuana and the Cannabis Industry is new and rapidly changing not everything is known.

For example back in May, Tom Bolt wrote to the U.S. Syndicates that Lloyds of London will no longer support insuring marijuana operations. Like an old security blanket, tossed in the corner by a growing child we had different companies to work with.

For our agency, it was no big deal as our whole sale company shifted carriers back in February to a product that the clients are enjoying. As retail insurance professional, I work maintain professional relationships with different whole sale companies to find products that suit my client’s needs. It is like going to your favorite restaurant, the specials change from Shrimp Salad to a New York Steak.

There are times that a whole sale company will reject part or a whole application due to risk. One of the more common rejections is covering property because of high fire risk. Be honest, not every company covers every risk and by hiding something when a claim arises, an insurance company could deny payment.

There are a few other agencies that work in the marijuana industry to various degrees. Some agents may be working with a whole sale broker that is going through another whole sale broker which adds fees. Some maybe doing one or two policies a year and not know what a BHO process or how Products Liability Coverage can impact your Vape Line that you are carrying.

The old rule of shop the agent and not the policy holds true. If you assume that Insurance is all the same and run out and attempt to get several different quotes to educate yourself on price then you are creating unnecessary problems. By shopping for price, you are pulling a slot machine lever hopping to match up a policy, good coverages with a good agent. Don’t gamble on you and your business’s future and check us out today.

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.

I have been asked what about Lloyds of London, too many times during the last week. Here is some clarity:

1. Yes, in May 2015, Tom Bolt wrote to the U.S Syndicates that it will no longer write for the Cannabis Industry. He is the Director of Performance Management so when he wrote: “Any policies of this type that are currently in force should not be renewed and no new business should be written. Existing quotes issued before today should be notified to your Syndicate Underwriting Performance account executive who will consider on a case by case basis whether the quote may be honoured,” it should be taken seriously.

2. In February 2015, Insurebud began transitioning its new and renewal customers to new carriers. The new carriers are higher rated. There is a wide selection of coverages. When I compared pricing directly, the new carriers were saving the clients hundreds of dollars. The response time has been better with one quote taking a two hour turnaround time when I needed a rush.

3. When shopping for your marijuana insurance for your business. You want to look for a couple of things:
a. Is your agent knowledgeable with the product line? A poorly written application can cost you money.
b. Are they adding on fees? If they are going through multiple brokerages then there are multiple fees. Yes, there are some policies that my agency takes home $80.
c. Do they offer discounts? Some agencies offer discounts and are resources to your business.
d. Are they a part time player or are they serious? The same person that does your auto policy might not be the best for your Cannabis policy. A change in law or even how an insurance policy can cost time and money to your business, an agent is another resource about your industry.

4. With Lloyd’s leaving the business, there have been fears that there will be an increase in cost. I have not found those fears to be justified. I would rather have one good carrier than ten lousy ones. There are probably 2000 policies in the United States so your common carriers such as Allstate, State Farm, etc. will probably never have a policy for the marijuana industry. They don’t want the fund an insurance pool nor do they want the risk associated with a Schedule 1 Drug.

What about Initiative 1372

Initiative 1372 is a good step to stabilize the situation short term. For better or worse Recreational Cannabis and Medical Marijuana are married in the eyes of the public. The two things to get government on your side:

1. Public safety.
2. Taxes in their direction.

Neither of those things happened with the medical system but did occur with the recreational side. Since '98 Medical Marijuana operated under the illusion of hands off system which restricted its growth. It was a free market system, growing an illegal product using any methods necessary and paying questionable taxes and licensing. It was to the point where some access points were advertising on the streets that it was tax free. For unity to occur, it is going to require people to work together. We got this far by looking at the standard, seeing that it wasn’t enough and changing the laws. It has required a lot of people giving up something to get this far. Most have forgotten that I-692 was funded by businessmen George Soros, John Sperling, and Peter Lewis using the California based organization Americans for Medical Rights.

The medical side can gain a lot by working together. There have been L&I cases where insurance companies were required by the courts to cover a patient’s medical marijuana. If we want this ability more widespread then it will require regulation on the medical marijuana side. If we want more doctors prescribing it then it will require a change in scheduling so their insurance covers it. We also need for more access points to adopt practices of medical clinics. Yes, this does mean some added costs.

The recreational side worries about lost revenue but it can make long term market gains with access to supplying medical patients. There have been estimates that it is only penetrating 3% to 5% of the market and to make gains it has to absorb from medical or the black market. With the change in laws, most law enforcement has reduced marijuana arrests which have helped the black market. Black market goods support neither medical nor recreational.

The listed sponsors of I 1372 are:

Jared Allaway, James Barber Sr, Mathew S Ramsey, Gina Garcia, Grandma Cat Jeter, Jeremy Kaufman, Frey Allyn, Dana Greetham, Stephanie Viskovich, Steven Crites, Matt Harrison, Adam Assenberg, Savhanna Carter-phipps, Hugh H. Newmark, Savhanna "Batgirl" Carter-Phipps, Joe Corcoran, Kristen Adamson, Trisha Johnson, George Foley, John Novak, David Hansen

The two systems can work for medical and recreational however there has to be some give and take. Right now the majority of us are trapped between new money and old timers that don’t want to budge. Right now we need to work on passing the 1372 however do not discount working with long term groups such as CCSE.

Death sucks but it doesn't have to kill dreams.

All deaths are premature.

I just had my first I502 grower pass away. It really sucked. There were no instuctions for what to strains to plant etc. Now the team has to deal with the grief and knowledge loss that this key member brought to their team. Despite this they have to move forward because of the dreams and the financal commitments that brought them this far. My advise is not changed: Get a plan and a life insurance policy.

If you have a team working on your operation then look at everyone. If they had to leave would you be able to keep going and produce your dreams? Would you struggle or would it look radically different? Can you deal with the emotional loss alongside the financal loss?

If the answer is yes then make a plan and get a life insurance policy to make sure that the dream moves forward. It doesn’t have to be fancy or a huge amount just enough to move your team forward. If you need a quote then ask me or my partner. If you are running a partnership or have shares then consider buy/sell agreements with the insurance policy in place to cash the estate out immediately.These are how you can retain wealth through the worst situation.

Cannabis is not plutonium. Life insurance is a serious tool for serious business. If you are looking at building your dreams then put a couple of dollars down to make sure that your friends and family can get there with out you.

Legal Issues

My father was a character (he taught himself to drive by taking cars for a 'test drive' off a sales lot and gave me a unique set of rules growing up. Rule 1. Don't get caught. Rule 2. Run real fast. Rule 3. Have a good lawyer. Rebelling is a good thing. Because of my father's example, I became a very, honest individual. I do keep in the back of my mind a collection of 'Good Lawyers'. They are useful. It seems like the Jerk factory is working overtime and not enough people want to settle disagreements like adults. The best one that I have encountered in Washington State for the Cannabis Industry would be Benjamin Schuster.

I met Benjamin Schuster with the Washington Cannabis Institute. He knows law and doesn't hide behind perception, behind organizations. This is the person that I do my best to call when I have time available in Seattle because he has a great brain for this. He is one of the best people to know in the industry. You can reach Ben at 206-818-0564 or ben@nwcannabislaw.com.

Get it Dry and move it out

I have done everything from sun drying on screens to thousands of feet of industrial dryers. As a kid on my grandparents strawberry farm, we took screens and saw horses and dried berries. As an adult, I dried hundreds of thousands of pounds of apples commercially. Dehydrating consumables has been around since the dawn of time. Time can be money and if you have more things than to watch buds dry then I want you to look at dehydration.

Artificial dehydration is easy as everything is uniform. It literally works like this: Hot air + time = moisture loss through a membrane. Hot air holds more moisture than cold air. If you go too fast then risk shocking the membrane. (It's like searing a steak). The nonconformity of organic material makes it challenging and brings artistry to science. You put in controls and adjustments and that compensates for the seemingly random nature of vegetation.

The secret to stopping bacteria and mildew is moisture control. Living Cannabis plants have about 80% water. Fungi likes product with more than 15% moisture. If it is below 10% then it is brittle and can break apart. (Depending on what you are doing this low moisture level may be desired!)The sweet spot is between 10% and 15%. You want this moisture level uniform throughout the product.

Most are afraid of oven drying because it can lead to harsh product. (Remember that seared steak I was talking about?) Even grey mold dies if plants are carefully and quickly dried. Oven-cured pot rots less than air or sweat-cured crops. The risk is oxidizing the THC and reducing its potential. I am not going to tell you all of the secrets. The recommendations that I have seen is keep it below 200 Fahrenheit and no longer than 10 minutes under heat.

When you start adding checks to the moisture level, you will see some things happen. You will find out that it does not dry in a uniform manner. There will be plateaus where your pot keeps the same moisture for a long time and valleys where it dries quickly. A hot product will speed up extraction of moisture while increased airflow will pull it from the outside. There are limits to drying product.

Just like growing, controlling the environment, you control the quality of your product. What happens to your process if it is raining or temperature is below freezing? Are you checking the moisture content of the air? How are you maintaining the moisture level? By asking and answering questions, you create a process for excellent finished product.

There is even machines like the CannTrol Vulcan 50 which is designed to go into a 1300 square foot room and dry 50 lbs of weed in 7 to 10 business days. If you have $20K extra and quality smokable product in about a 1/3 of the time then this is an option.

If you have product that is hanging around for weeks in drafty warehouse then you are not making money and you are just exposing yourself to risk. Look at improving your drying process.