What’s My Risk?
‘Cause that’s what it’s all about. Everybody’s coming into this industry to make a lot of money. The reality is that you really need a lot of money to start out in this industry, okay? But, at the end of the day, it’s how you protect the bottom line ‘cause the top line does nothing. It’s the bottom line that becomes real important. So, to start out, obviously cannabis is considered an extremely high class when you look at the world of insurance. So, let’s talk about plant touchers and who’s up there. You can see everyone, whether you’re a cultivator or, in Michigan, you’ve gotta be a provisioning center, you can’t be a dispensary, or in a distribution channel, or whether you’re a manufacturer doing extraction, edibles, vape, whatever, transportation or testing lab. If you’re touching plants, you need to have a specific insurance policy in coverage to enable you to do that. That’s very, very important.
So, what’s my risk? And I’m just gonna blast through these because, number one, starting out it’s a schedule one drug, so you have the fed in here. And the fed can come in at any time and you need to be prepared for that just in case they do. Alright? Slip and falls. Slip and falls are basic business hazards. There’s nothing up here that is gonna be different from traditional business hazards. I tell people, if you run it like a business, we’ll insure it like a business.
Employees getting hurt, product liability, product recall. It’s more expensive to bring a product back than it is to put it out there to begin with. So, very, very important to think about product recall coverage if you are in a dispensary situation or if you’re a manufacturer, if you’re a grower.
Theft. We all know this is cash business today, so the fact that you’ve got a lot of cash, you’ve gotta protect it and make sure that you can control it. And/or theft of product. Loss of PII—personally identifiable information. If you are a medical facility and you have personal health information, it becomes even more important if you started losing this information. HIPPA, in compliance with HIPPA laws in the medical field become very, very important when you start losing this information.
Price risk. I was doing this seminar out in Boston and a girl out there said, well, one of my biggest concerns is price risk. And, I always thought that was just a normal business risk, but at the end of the day, it’s something I throw up here because it’s something that you gotta be concerned with. As states issue more and more growers’ licenses, what’s that going to do with the price of product? In Oregon, for example, we know product—there is so much product in the system in Oregon—there’s over five times the amount of product in the system—legal product that’s in the system that was consumed last year. So, when you look at those numbers, it becomes staggering what’s happened to the price. Now, in Oregon, price of outdoor groves just dropped dramatically. I have growers that tell me that they’d sell their product for $400 a pound just to get rid of it. [Inaudible 0:02:22].
Other concerns, computer system crashes. You’re in the middle of your day and now your point of sale system goes down. You get employees that are thieves. Somebody sues you because they did something stupid while using cannabis. Someone sues you because your bud tender recommended the wrong strain. Someone claims that the picture on your website was their intellectual property. You get the point. There’s a lot of different things that you can be sued over where that can cause you different risk and exposures and things that you need to protect yourself in as.