Takeaways from Our Conversation on Q1 2020 in Insuring Cannabis

Cannabis had a bit of a down year last year, but 2024 holds some hope for continued growth – maybe even a return to semblances of the old pace.

As we head into the final month of the first quarter, one would think we should have a good idea what the year cannabis, and more importantly, the year in insuring cannabis, is shaping up to look like.

There are myriad questions: How do retail insurance brokers who specialize in cannabis feel about things so far in 2024? Are they worried about prices for cannabis products, which were falling in many states last year? Are there any new risks to be concerned about? Are they still stoked about the possibilities of emerging products and newly legal states?

To get to the heart of those matters and get a few of questions answered, we spoke with Charles Pyfrom, chief marketing officer at CannGen Insurance Services, a managing general underwriter focused on the cannabis industry.

We wanted to know what he’s hearing from his clients, and how he feels about 2024 with a quarter now nearly under our belts.

Following are takeaways from that conversation.

Pyfrom is taking a regional perspective about opportunities this year in the insuring cannabis space.

“I think it really depends on where you’re at geographically and what types of clients you’re focused on,” Pyfrom said. “If you’re focused on vertically integrated operators and mature states, maybe not as much, but if you’re focused on immature states or newly legalized states that are coming online with permits being issued, I think there’s lots of enthusiasm and optimism towards what the industry’s going to have in these up and coming states – whether that’s up in the Northeast, whether it’s seeing what Ohio does now that we have recreational getting approved, it’s what maybe Florida does with having recreational approved.

He added: “There’re lots of opportunities for retail brokers to still find success in the cannabis space, just depending on where their clienteles find opportunities to grow and expand themselves.”

Pyfrom boiled down his optimism for growth domestically to the “M states,” the newly or newer legal states like Michigan, Massachusetts, Missouri, Minnesota and Maryland. He said in another interview that the firm is adding underwriters in these states to prepare for more growth.

“We’re already there; CannGen’s already writing in all these states,” he said. “We have great distribution partners who are already well-connected with the individual operators in these states and we’re seeing a lot of growth, and just so happens to be a lot of them are states that start with the letter M.”

It’s not all positive for the year so far – depending on the business.

“If you’re a small mom-and-pop operator in a mature state, you’re probably worried about compressed margins,” he said. “More competition, lack of enthusiasm or excitement about the product or ongoing licensing issues. If you’re a top 25 operator, you’re probably looking at great M&A activity, good opportunities to expand a geographic footprint from one state to another.

But you’re also probably looking at how do you refine and really be a well-run and functional business from an operational aspect and making sure not only your sustaining the business for longevity but also sustaining for when there’s pending legislation that’s going to be beneficial to the operators themselves or really kind of getting through the next hurdle of cannabis, which seems to come in, in waves as we’ve seen over the last 10 plus years.”

Related:

• Takeaways from Our Conversation on Selling Insurance to Cannabis Businesses in Newly Legal States
• Takeaways from Our Conversation with Insuring Cannabis Pro About His Son’s CBD Trial
• Takeaways from Our Conversation on SAFER Banking and What it Means for Cannabis Insurance Specialists
• Takeaways from Our Conversation with a Specialist Who Focuses on Baby (New) Cannabis Companies
• Takeaways from Our Conversation on Hemp Market’s Growth Potential

Topics Cannabis