Jeffrey Rosen is a reformed attorney, ten years practice and has run an insurance agency for over 15 years. Jeffrey has cannabis clients for over ten years and CBZ Insurance Services is 100% dedicated to those companies in the Cannabis space or servicing cannabis companies. We are very thankful that Jeffrey took out the time to answer our questions with regards to insuring your cannabis business.
Transcript of the Video Interview
Ganjly: What were your reasons for going from the mainstream industry to the cannabis industry and when did you make the shift?
Jeffrey Rosen: I’ve had cannabis clients for over ten years and about two years ago we started focusing more on cannabis clients and going to conferences and speaking to panels around the country. Last year, legally we put a corporation together – CBZ Insurance which is a 100% cannabis based servicing those in the cannabis industry.
Ganjly: What was the biggest obstacle you encountered in the cannabis industry?
Jeffrey Rosen: We made the switch, obviously the cannabis industry especially here in California, is an emerging growth industry and it’s always exciting to be in the emerging growth industry. The people that we worked with in the cannabis industry are very different breed of people and they’re just much more kin to who I am. Having to grow up in the 70’s, it’s community oriented which I really like.
In the regular industry more and more people want things automated and they don’t want advisers, counselors, consigliere. In the cannabis industry, because it’s a communal environment and I have such a deep rolodex of people within the industry which span all different sections of the industry.
We’re just more than insurance brokers. We match up our clients if they need lawyers, if they need accountants, POS systems, investors. It’s very community oriented than what people in the normal businesses want from us. Especially in the early stages, you have to have these deep relationships because insuring these companies is tricky
Ganjly: How many people are employed in your firm?
Jeffrey Rosen: We have seven different people right now within the firm. We have clients up and down the state of California, Nevada, DC. We are working with a bunch of people back east and we are expanding nationwide.
Ganjly: What were the common issues that the cannabis companies ask you?
Jeffrey Rosen: Well that goes back to when we’re having issues with cannabis clients. Some of the big issues are, especially the growers are workers compensation which in the state of California is mandatory whether you sell pencils, pens or vape pens, it’s mandatory. It’s not inexpensive for growers and so the people in the industry are trying to get around that for the time being by calling them 1099.
They are saying growers are not employees. They are owners because we give them a piece of the crop or the harvest. Legally those are all employees. You can’t call somebody a 1099 unless they actually fit within those definitions. In this industry they’re really not 1099.
So the problem is when they try to get worker’s comp insurance after the fact. Those companies find out that they have employees before, some of them are surcharging our clients, charging a larger amount because of their failure to previously insure through workers comp their employees.
So what’s really fascinating is that we at CBZ, we are working with a private group, very well known within the cannabis industry. We’re trying to build a workers compensation insurance company and the workers compensation insurance will only be for those in the cannabis industry. So we’re going to try to be far more competitive and not have some of the penalties that we’re seeing right now.
Ganjly: What is that timeline for that company to open?
Jeffrey Rosen: We are hoping Q3. But we’re also close with another group that’s building another insurance company, captive insurance company, that’s going to offer all the other types of insurance for cannabis companies like product liability, property, general liability, DNO – directors and officers, life insurance, buy-sell life insurance, key person life insurance things like that. So together we’re going to have a synergistic relationship cos we’re going to have two captive insurance companies, one for workers comp, one for all the other coverages.
Let me digress, in terms of insurance for cannabis companies there’s two types of insurance: one, that protects the company. So you have product liability, general liability, slip and fall things like that, DNO – directors and officers, everything that protects the company. The other type of insurance is employee benefits which we do as well. I happen to be very good in that side. We have medical, dental, vision, LTD, STD, life disability things like that. We ran the full gamut of insurance coverages for our clients.
Ganjly: What is your advice for somebody who just started in the cannabis industry or someone who wants to go into the cannabis industry?
Jeffrey Rosen: First of all, you need to try to create a more professional organization. You need advisors to help with the business plan, to try to get some investors. You need to cross your T’s and dot your I’s.
The most important part about going into the cannabis industry is being well-funded and that’s kind of the bottom line. Because in the cannabis industry, things are very slow. Nothing moves quickly. So you’re going to need enough assets or investments behind you to be able to keep you going through all the different regulations and time periods that’s going to take to be fully compliant. You have to be well-funded
Ganjly: There are some people who don’t insure their business. Now, why is it so important to insure your business especially in the cannabis industry?
Jeffrey Rosen: Look at it like this. The cannabis industry shouldn’t be different from any other industry. So if you have another company, you’re obviously going to insure your company against loss. In the cannabis industry, it takes a lot of time, energy, money to get a business going. Not to insure it can create huge ramifications. It’s like you own a home, you would never go without home owners insurance cos that would be ridiculous. You just have to insure.
Ganjly: If you could give one piece of advice to the entrepreneur, what would it be?
Jeffrey Rosen: Just get a really good team of advisors behind you. One issue I am seeing in the cannabis industry is when people are looking for insurance, they tend to think that the property casualty insurance, those coverages that protect the company, they look at it like car insurance. They’ll call up three, four or five brokers and they say get me a quote.
So on the property casualty side, that doesn’t work like that. The applications are very, very thick. They’re dense, they’re all inclusive because they have a grow operation, transportation, extract, manufacture. There’s a lot of things that they’re going to insure on your behalf so the applications are very dense and very thick. So it takes a long time to get through them. So you don’t get a quote or an offer until the application is in.
If you have three people going to the companies, the first person that gets there with the application, gets the quote and no one else is allowed to see the quote and they’re locked out. So it’s more important to team up with advisors that are referred to you. Trusted advisors that you know and you trust and you know as professional. So they can look at your entire operation from A to Z and create a plan for you of the different types of insurance you need when you may need them, the different cause and how to set up a strategy of adding different pieces as you can afford them.
Ganjly: How can the cannabis community reach you and tell us more about CBZ Insurance?
Jeffrey Rosen: Before I get to that I want to say that another important part of insurance is that we are now seeing lawsuits. We’re seeing product liability suits. We’re seeing recall of products from pesticides, contamination or something like that. So everyone down the line, the growers to the extractors to the manufacturers to the dispensaries, everyone across the line is going to get sued.
So as we progress further into this industry in the next three to five years, we anticipate a proliferation of lawsuits because like in any industry, there’s always those people who think it’s quick retirement plan – to sue somebody. So that’s why I go back to be compliant, cross your T’s, dot your I’s, fully insure so you’re protected and have great advisers.
In terms of CBZ Insurance, I was an attorney for 10 years, San Francisco, Silicon Valley in Taipei, Taiwan. I’ve run an insurance agency for over 15 years. My partner has about 25 years experience in the property casualty field. He is just great at it. You can always reach us at 415-941-7635. My email is firstname.lastname@example.org.
Ganjly: Thank you Jeffrey. If you guys have any more questions, check out their website cbzins.com or shoot him an email.
At Ganjly, we interview cannabis experts, entrepreneurs and company representatives who are doing something noteworthy. To learn about becoming featured, you can reach out to us at email@example.com.