While cannabis remains illegal under federal law as a Schedule I drug, the U.S. legal marijuana industry was estimated at $13.6 billion in 2019 while creating over 340,000 jobs, according to New Frontier Data. These numbers only continue to skyrocket with present-day valuations reaching upwards of $61 billion. In just the last four months, five states have legalized recreational marijuana, including New York which many see as a major domino.
This impressive trajectory only bodes well for proponents of the plant, which many see as a safe and perhaps healthier alternative to alcohol. However, challenges remain for those involved in pushing the cause upstream. While the outlook on the horizon looks promising, the present-day cannabis industry faces many obstacles to flourishing and operating like a traditional business. Among them are the shortcomings in the availability of insurance products geared towards cannabis touching entities that most other industries take for granted. While coverage is available, options are limited and underwriting capacity is restricted. Most of the carriers offering coverage to cannabis companies operate in the non-standard or “surplus lines” insurance market.
At ABD, we recognize that these factors demand a team of knowledgeable, diligent, and experienced professionals who can help navigate the constantly changing and somewhat opaque market. Our highly qualified Cannabis Team has amassed a deep knowledge of the industry in only a few years while working closely with nearly 50 cannabis industry clients.
To introduce the team, we asked them about working in the cannabis industry and how they work together to navigate the complex needs of over 50 cannabis clients.
What is your team’s background in navigating risk for the cannabis industry?
As a group, we have experience working with some of the largest cannabis companies in the industry today. We work with every license type and focus on large vertically integrated and publicly traded companies. This also gives us the ability to support private single license operators as they grow and scale their business. Collectively, the group brings prior insurance backgrounds in life science, retail, delivery, agriculture, and venture-backed technology companies. Although there is nothing quite like working in cannabis, these fields translate very well into the fast-paced industry.
What is your team’s process for advising cannabis clients’ risk management strategies?
The ABD Cannabis Team understands that entrepreneurs in any industry, but especially in cannabis, are fundamentally risk takers. Our job involves first helping to identify, and then making recommendations to minimize, inherent risks of doing business in a constantly evolving business landscape. Through regular thoughtful conversation we work with our clients to help make data-driven decisions on what risks are self-insurable and what risks are better transferred to the leading insurance companies that we represent who are actively writing legitimate coverage for cannabis.
Our process involves more than touching base just once a year to renew policies. We are involved with reviewing the insurance components of proposed contractual obligations, advising on potential business transactions, and conducting on site visits in the field with highly qualified personnel that can help prepare for a knock on the door from OSHA.
What are some key insights into the cannabis industry that you’ve learned from working with these clients? Any surprising challenges?
Working in the cannabis industry presents a unique dynamic with numerous challenges that keep our clients and colleagues constantly engaged. In the course of our work we morph into educators, forecasters, and sometimes even armchair psychologists. The cannabis business dates back hundreds of years, but it was not until relatively recently that the transition from the illegal market began. With change usually comes growing pains. We hear firsthand experiences about the massive amount of red tape, capital, and time investment needed to start a legal cannabis company. At ABD, our goal is to minimize the pain of obtaining basic business insurance coverage needed to protect themselves and their investments, just like any other business – we find that education is key.
Purchasing insurance for a growing or established business is not always intuitive. It becomes essential for brokers to advise on the products available and how they function, as well as the process of how coverage is secured – from application to policy issuance and beyond. Much of what we do as a broker involves coaching, advising, looking around the corner, and leaning on our experiences to navigate the market while creating realistic expectations that clients can rely on to make informed business decisions.
Meet the Team:
Brian Marblestone, CLCS, Client Executive
Brian Marblestone joined The ABD Team in July of 2019 and brings over 9 years’ experience in the insurance industry. He has spent the last 5 years developing a niche in the cannabis industry. With experience at every position within an insurance brokerage, Brian has deep knowledge and understanding of how to effectively lead the team to deliver results for policy holders. Emphasizing proactive foresight and clear communication helps operators understand their risk and develop long-term trusting relationships. In 2016, Brian earned his Commercial Lines Coverage Specialist designation from the National Underwriter Company. Brian holds a BS in Business Management from Sonoma State University.
One of the things Brian looks forward to most once pandemic restrictions are lifted is live concerts, especially Dave Matthews Band.
Timothy J. Guzman, CPCU, ARM, RPLU, Vice President
Timothy Guzman joined The ABD Team in July of 2012 and brings over 30 years’ experience in the insurance industry. As an Account Executive Timothy is responsible for service, account management and marketing of insurance programs. Specific responsibilities include contract analysis, coverage negotiation, evaluation of insurance and coverage requirements and the placement of coverage. Timothy is a graduate of the University of San Francisco with a Bachelor of Science in Biology. In addition, Timothy holds the CPCU, ARM and RPLU designations and has completed certain course work toward the completion of an MBA in Risk Management/Insurance at Golden Gate University.
One of the things Timothy looks forward to most once pandemic restrictions are lifted is live performances- concerts, theater, and dance.
Kou Syvoravong, CISR, Account Manager
Kou Syvoravong joined The ABD Team in June of 2019 and brings over 9 years’ experience in the insurance industry. As an Account Manager, Kou focuses on servicing of client insurance programs and finding clients coverage that meet their needs. In 2014, Kou earned her Certified Insurance Service Representative (CISR) designation and is working on getting her Certified Insurance Counselor (CIC) designation. Kou holds a BS in Business Administration from Humboldt State University and a Master of Business Administration from University of Phoenix.
One of the things Kou looks forward to most once pandemic restrictions are lifted is traveling to Europe, a trip which she unfortunately had to postpone in the summer of 2020.
Nicole DiLorenzo, Senior Account Coordinator
Nicole DiLorenzo joined the ABD Team in October of 2018 and brings over 10 years’ experience in the insurance industry. In her role as Senior Account Coordinator, Nicole supports her clients and team members in structuring programs, negotiating coverage terms and pricing, and developing service team strategies to deliver a delightful experience. Nicole is a graduate of California State University, Chico and holds a BA in History with a Social Science option. In 2018 Nicole earned her Certified Insurance Service Representative (CISR) designation.
One of the things Nicole looks forward to most once pandemic restrictions are lifted is live sporting events, especially San Francisco Giants, 49ers and San Jose Sharks games.
Scott Rhymes, VP, Risk Control Services
Scott Rhymes joined The ABD team in November 2019 and brings over 25 years’ experience in the risk control and occupation, health and safety field. Scott provides occupational health and safety, auto, property and general risk control services to ABD clients. Scott is a graduate of California State Northridge and holds a BS and a MS in Occupational and Environmental Health, with an emphasis in safety systems and industrial hygiene. Scott is also an Associate Risk Manager (ARM), Certified Industrial Hygienist (CIH), Certified Safety Professional (CSP), and Registered Environmental Health Specialist (REHS).
One of the things Scott looks forward to most once pandemic restrictions are lifted is working with his sons Scout troop on backpacking and camping trips.