This article was produced in partnership with Davies Group.
Chad Beadles (pictured), associate vice president – Davies Risk Services, spoke with Nicole Panteloucos from Insurance Business about the unique challenges and opportunities presented by cannabis legalization to the insurance industry, emphasizing substantial potential and highlighting key risks in cannabis operations. Regulatory shifts and operational risks
Insurance Business: What are the advantageous of nationwide cannabis regulation?
Beadles: I really think that federal rescheduling of cannabis will alleviate a lot of the regulatory burden that insurance companies currently face. It would allow insurers to offer coverage on a state-by-state or national level without navigating complex and varied state regulations, reporting requirements, and other administrative challenges. Simplifying these regulatory hurdles could make operations smoother and reduce the risk of compliance issues slipping through the cracks, which I believe will be a game-changer for the industry.
IB: Can you explain some of the primary risks associated with ensuring cannabis operations?
Beadles: We primarily encounter three classes of risk: retail stores selling both medical and recreational cannabis, often combined; growers; and manufacturers involved in oil extraction for edibles. Growers and manufacturers pose significant challenges due to fire risks from processes using flammable substances like butane. With grow operations, specific types of light bulbs and fixtures are crucial; mixing the wrong ones can lead to disastrous consequences. Imagine a room full of valuable plants burning—it’s like a farmer losing a cornfield, but indoors. Education and understanding
IB: How is Davies Group involved in the cannabis space?
Beadles: We specialize in providing support for risk management, particularly to the insurance industry. Many of our clients are pioneers in writing policies for cannabis in legalized states, and we’ve partnered closely with them. One of our key partnerships is with Burns and Wilcox , with whom we’ll host a panel later this year featuring their US national lead for their cannabis program. Our role involves extensive research and development of risk management forms, collaborating closely with brokers to identify critical areas. Given the emerging nature of this market, our approach focuses on understanding cannabis operations, assessing […]
Navigating highs and hazards in the cannabis insurance market
