The cannabis industry is growing at an unprecedented speed. With the continued growth and profit coming out of legal cannabis, coupled with the ever changing regulation it is becoming increasingly hard for business to avoid risk exposures. From staying in compliance with your license and banking regulations, to safe keeping product and customer data there are so many risks cannabis businesses face. We meet up with Drew Taylor of Alpharoot to chat about Cannabis Insurance and how it can be tailored to your unique needs.
Harry Brelsford 0:03
Hey 420MSP having morning coffee here with Drew Taylor over at AlphaRoot Drew. Good morning, let me take another step.
Drew Taylor 0:12
This morning. Hey, how are you?
Harry Brelsford 0:13
Good, good. Hey, this, I’m really excited about this. You know, tell us your story podcast because I have actually looked into some of the different types of professional service providers in the cannabis industry. Right. So there’s a community for the accountants and CPAs. I had the honor of meeting someone in the insurance business such as yourself is not a Steamboat Springs. Talk to me, give me the landscape of your line of work, the insurance business in in the cannabis sector, what’s going on?
Drew Taylor 0:48
Sure, I think I’d be remiss to not kind of give you the background about through as well. I think that kind of helps paint a picture for sure I’m moving forward. So we’re the subsidiary of a larger entity called boundary shield. Founder shield, at its inception, about 10 years ago, kind of focused on what I’ll call the emerging market space. So think cryptocurrency autonomous vehicles and canvas. Obviously, not a lot of states were legal that 10 years ago at that time, but obviously saw some some optimism in the space. And you know, legalization was rising. So about five years ago, took alpha root out as a separate brand. The branding is nice in the cannabis space. And you know, one of the things that we always try to do and try to say to our prospects and our clients is, you know, we kind of view ourselves more as a cannabis company that happens to do risk management insurance, as opposed to, you know, suits in New York that only do insurance and cannabis just happens to be one of the industries we focus in. Yeah. So yeah, that’s kind of the birth of alpha roots. And kind of our, our focus, you know, we’re an Insurance Brokerage that focuses solely in the cannabis hemp CBD space. So so we kind of get it, you know, we understand the risks that are insured to have on it on a daily basis. So that’s kind of the background. And then just the entity as a whole. We are New York based. So you know, obviously great to see New York come online in the last couple of weeks, and then with jersey over the past six months. So certainly some exciting news. For us East coasters.
Harry Brelsford 2:22
Yeah, yeah, absolutely. What makes the insurance business unique in cannabis, and I’m trying to frame up with that community of CPAs. And bookkeepers that I know, there’s some real unique things they have to watch. Right? With the banking system, of course, and then the taxation area. Do you have the same thing? Or is it just like any other SMB any other business?
Drew Taylor 2:48
Yeah, I think it’s. So from an insurance perspective, I think cannabis kind of ties most closely with pharmaceuticals. And I think it will continue to do so there’s obviously you know, tightened, whether it be state or federal regulation, or lack thereof, around cannabis. And I think that’ll, that’s around for the long term. I think what kind of differentiates the cannabis space from maybe other industries is just the marketing capacity. And what I mean by that is the insurance carriers that that’ll play in this space, and actually entertain cannabis risk. Definitely more limited market than what you’ll see in other industries. And I think that’s where we struggle on a daily basis is more or less just finding the insurance capacity, if you will, for our insurance? Yeah. And I think that’s the real differentiator and why we wanted to focus on the industries. It’s just constantly evolving and changing. And, you know, you kind of have to have your finger on the pulse on a daily basis, not not too dissimilar from kind of banking regulation, tax regulation, and you know, that’s constantly changing as well.
Harry Brelsford 3:51
Yeah. Yeah, the only constant this change is your industry in this particular vertical setup, such as if I were a lawyer in there are cannabis lawyers, there’s some really well known firms Zuber Lawler lawyer out of the Los Angeles area is probably number one of my eyes, five or six offices. And so if I’m a lawyer, I joined the American Bar Association, right. And I can go to the annual conference, and there may even be a track on what makes the cannabis industry unique. There’s probably today at least one lecture. Is there an association that you voluntarily or have to join in your business? And then would there be an annual conference where you could meet people just like you and trade notes?
Drew Taylor 4:36
Sure. So there’s no organization that solely focuses on insurance to my knowledge. Now, there are professional organizations that leave room for the insurance space as a whole. So think of the NCIA. They have a group of risk management and insurance professionals right. So like while they’re focused on other areas, and not just insurance as a whole, they still have a group of industry professionals there. There’s other groups like the ncrma is a is a captive that’s launching, but they also have kind of a, an education arm associated with them in the risk management space. So I’d say more more groups probably focused on risk management, and not insurance. And there are two different things, right? One is, yeah, manage your risk. And the other one’s, you know, how you insure it, or how you transfer it. So one of them’s changing money, and the other one’s having manage risk. So I think there’s probably more groups available for like the risk management world, but they’re certainly out there for insurance.
Harry Brelsford 5:36
Well, what I’m getting at is professionals like to hang out with like minded professionals, right. And the point is, I could see you go on to a conference and you know, five or six of yours sitting around trade notes. Oh, man, I did this. And I did that. I really enjoyed that part of being a professional. Right is it’s it’s, it’s a big ocean. Right? There’s room for everybody. Finally, how it at a high level? How do you get business? Do you go to some of the cannabis? The trade shows like MJ biz and have a booth or do you go knock on doors or cold calling? I’m just curious what the motion is because it’s a different industries.
Drew Taylor 6:16
Yeah, for sure. And I think, you know, we definitely do some kind of cold outreach, I think cold calls and outreach is kind of a way of the past. So we’ve really focused our attention on kind of content creation, leveraging our connections, growing our LinkedIn network and our page. And just showing ourselves as a thought leader in the space. The other thing that we’ve we’ve done, and it kind of goes back to my first point of viewing ourselves as a cannabis company is, you know, we’ve tried to get as involved as we possibly can in the community, kind of insurance aside. So we belong to a group of probably 400, industry executives called trailblazers present, and they get together, you know, two or three times a year, and just kind of have meetings set up predetermine schedules, you know, it’s a good time just to kind of touch base with those that work in a daily basis, at the ground floor in some of these, some of these cannabis companies.
Harry Brelsford 7:13
Yeah, and I have a bias towards events, if you can’t tell. And this is pre pandemic, you know, when events were a thing, and they’re going to be a thing, there’s definitely pent up demand. But, you know, I built my original company, SMB Nation on what I called hallway 101, right? Go to events. I went to some event, some Microsoft, I didn’t even get a lecture. I didn’t even get a lecture at some Microsoft events. I just was making introductions, walking the floor, hitting the booths, you know what I mean? And drew it worked it, you know, it, maybe not in 30 days, but boy A few years later, and it’s like, wow, that really worked. Well, hey, Drew, we’re gonna get you back next quarter, if you could do me a favor, and be thinking about what maybe has changed. And when we talk to you in about 90 days, about a quarter, let me know what incremental changes, you’re seeing maybe new regulations, or this or that, and I’m over on your page. So folks, it’s alpharoot.ceo. And under white papers, I’m going to fill out the form as soon as we drop the cannabis industry and insurance of ebook. So I’m gonna go grab it. I’m probably not the type of lead you’re looking for in the form, but I’m going to grab your book.
Drew Taylor 8:27
Yeah, absolutely. Give it a read. New one should launch in about 30 days or so for this upcoming year. So keep your eyes peeled for an hour I
Harry Brelsford 8:35
knew might be about to go live the mid spring. Okay, my friend. Thank you very much. Have a great day. You as well. Thanks.