Editor’s note: This part of a series of profiles on cannabis brokers, in which Insurance Journal explores why and how these folks got into the business, the ups and downs of insuring cannabis, as well as a few tips for those interested in a little professional development.
Chris Boden’s belief in cannabis goes beyond a sales pitch and the broker’s acumen that he’s built while talking up the industry to his retail clients.
Boden has been in the insurance industry for 16 years, with a chunk of that time spent selling insurance in the cannabis space.
Boden, cannabis practice group team leader for San Francisco, Calif.-based wholesaler Crouse and Associates, owned a retail brokerage for 12 years before selling to a national brokerage in 2016.
He wrote his first cannabis insurance policy in 2010 for a medicinal dispensary in Sacramento, and has been heavily involved in the business since, including a stint on the insurance committee of the California Cannabis Industry Association.
Boden spoke with Insurance Journal about his experience as a cannabis broker.
Insurance Journal: Why did you get in the cannabis and insurance space?
Boden: I made the decision to go all-in on the cannabis insurance industry after I saw firsthand the positive medical aspect cannabis had on a child. A friend of 20-plus years had a son who was having horrible seizures two to three times a week. Doctors tried countless drugs, he was taking 15-20 pills a day and nothing worked.
My friend implemented a CBD regimen and within a few weeks the seizures went down to one a week. Seven years later his son has maybe one to two seizures a year and is only taking one to two pills a day. Cannabis insurance was my way to be involved and do my part in providing proper risk management strategies.
IJ: Has this been a good financial decision so far?
Boden: Yes. Compared to other industries, once I went all-in and made the cannabis industry my specialty, the financial benefits took hold.
IJ: What’s the hardest thing about the cannabis industry to deal with?
Boden: The constantly evolving regulations and insurance marketplace. I work with agents across the country and keeping updated on rules and regulations is very important. Similar with the insurance products, one day a carrier may not provide coverage and the next day they’re in it.
IJ: What insurance product is the most difficult to obtain for your cannabis industry clients? Why?
Boden: Stand-alone Hired Non-Owned Auto (HNOA). The industry has made a huge swing to B2C delivery (business to consumer) services. Unfortunately, there are only two or three carrier options available for auto insurance and most package policies will not include HNOA for retailer operations.
IJ: What two or three tips do you have for brokers entering the business of insuring cannabis?
Don’t go it alone. Even if you’ve been in the insurance industry for years, partner with a wholesaler or broker who specializes in the market. I’ve seen many agents go direct to carriers and there were large gaps in coverage and potential E&O issues.
Cold calls do not work. Cannabis operators rely on their fellow cannabis operators for reliable vendors and partners. I’ll tell my agents: “Just start telling people you provide insurance to cannabis operators.” One of my largest account came from an introduction by a parent of my daughter’s soccer team. He asked what I did for work and immediately said “I have a friend in the industry I should introduce you two.” That introduction helped land a very large cultivator and then all of the cultivator’s friends in the industry. That’s all it took.
Building a cannabis book takes time. Don’t get me wrong, you may write a large account from the get-go, but the majority of my agents that have developed a strong clientele it took them 12 to 18 months to really get their traction. I have personally seen several agencies create a cannabis division, and after six to eight months closed it down because the revenue wasn’t where they planned. They threw a ton of money at the marketing, cold calling, and went to one or two cannabis industry events. That strategy may work for some industries, but I have not seen it in the cannabis market.
Don’t be an insurance producer, be a risk management partner. I often say a cannabis insurance professional must be a chameleon. One minute you’re discussing insurance with a startup operation with very little insurance understanding and the next you’re reviewing options with a large venture capital firm. Take the time to explain the coverages and importance for each; especially any pertinent exclusions or limitations. For cannabis insurance, just because the premium is low, doesn’t mean that carrier will provide coverage when needed. Each operator is unique, utilizing a strong cannabis insurance partner will help provide the best policy and lower your E&O exposure.
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