It’s a new year, and one thing we can look forward to is more new states bringing their cannabis markets online.
For insurance professionals, new states offer the challenges of new regulations and new clients to explain the complex world of insurance to.
But it’s not all tough sledding in these new states. There are lots of opportunities for growth, and to lay down one’s roots as an insuring cannabis specialist.
That’s the view of Erich Schneider, managing director at Alpharoot. Alpharoot is a sister company of Founder Shield, which was relaunched in 2020 as a standalone company. AlphaRoot has been active lately jumping into new markets.
We spoke to Schneider about what AlphaRoot is doing in some of these newly legal states, querying him about the upsides and the downsides. Following are takeaways from that conversation.
Schneider got into learning curves for clients since many cannabis businesses can be considered new operators, which lack the “commonality and consistency” with the MSO’s.
“I think it’s apparent for companies that may not have been operating before in the cannabis space, they may have had some previous experience and we just see constantly that,” Schneider said. “The stakeholders are different. The key players are different. But a lot of the players are small businesses and whether or not they’ve had cannabis experience previously, if they’ve owned a business.”
That changes the process of explaining and helping these clients obtain insurance, putting the brokers at the firm in the position of providing the education and understanding of the process, and walking them through what information they will need, the contractual requirements, specific information required for the submission.
“What we really try to do as best as we can right on the front end is provide education so that when we actually do go through the process of getting quotes, so there’s no sticker shock, there’s no, ‘Wait, I didn’t know we were going to have to request this information, so on and so forth,” he said. “So, I think a lot of it just has to be really solid communication and being more proactive when markets come on.”
These challenges are even greater in newer states, where new ways of getting cannabis to consumers seems to be taking on a bigger role in the industry.
In New York, for example, eBike delivery is posing promises and challenges for brokers like Schneider.
“I think eBike delivery in New York is a great example where we’re working with one of our really close carrier partners that we have a lot of premium on the books with and we’re actually leveraging the data of our sister company Founder Shield, which focuses on emerging industries and emerging technologies, and they work with a lot of eBike delivery companies on demand, food delivery, auto delivery,” he said.
He added: “Luckily, we had that at our disposal and we’re working with the carrier to provide some industry standards and benchmarking as it relates to pricing and claims for this type of exposure, because they’ve never written eBike delivery. They don’t have that data readily available, so like in that instance it’s working with them to help build out a program.”
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