The cannabis industry has arrived. With each passing month, another state opens the door to the cannabis economy. Most recently, Vermont legalized cannabis. As Venture Captive Management predicted last year, the United States should prepare for a wave of cannabis legalization to sweep across the nation. Although cannabis is a very profitable industry, it is not without its risks. Just as with any other cash crop, cannabis carries its own liability exposures. Overblown as the federal government’s concerns regarding marijuana may be, there are a plethora of considerations for the cannabis company operator, including captive insurance programs.
Insurance Options for the Cannabis Industry
From Prop 65 lawsuits in California, to the potential for insecticide exposure from improperly cultivated crops, there are potential multimillion dollar settlements in the cannabis industry. The smart operator will prepare itself for these exposures through insurance. Unfortunately, there are precious few insurance carriers openly serving the industry, and those that do offer solutions leave much to be desired.
Consequently, there is a multibillion dollar industry with no meaningful risk management solution. This is a prime opportunity for captive insurance programs. Captive insurance is designed to fill the void left where commercial carriers cannot or will not serve the market. Self-insurance solutions allow the cannabis industry to craft its own coverage while retaining the underwriting profits otherwise lost to the commercial carriers. This opportunity creates a unique market for the insurance industry. Never before in modern times have the smaller players, such as captives and risk retention groups, had chance to deeply penetrate the market.
VCM’s Captive Insurance Programs
Venture Captive Management is a thought leader in the cannabis insurance space. VCM’s Chief Compliance Officer and General Counsel, Matthew Queen, has been published in several interviews and a number of insurance journals opining on the various ways in which to self-insure cannabis. These articles generally outline the legality of cannabis captive insurance, the size of the potential market, and the ability for states to issue captive insurance licenses to cannabis companies within their borders.
Only through a comprehensive understanding of the Controlled Substances Act, anti-money laundering considerations, and the nature of captive insurance, can a risk management professional adequately construct and operate a healthy captive insurance program. Venture Captive Management has put together a state of the art risk management team dedicated to understanding and serving the needs of the cannabis market.
Read Our Article in Insurance Journal
Venture Captive Management is proud to have Matthew Queen’s article The Growing Cannabis Industry and Captive Insurance published on Insurance Journal’s website. Insurance Journal is a leading source for the latest business news in the Property & Casualty insurance industry. If you would like more information about how VCM can help your business, please contact us directly. We’ll be happy to help you find and create the captive insurance programs that work best for your company.