AlphaRoot – Insurance for the Cannabis Industry

Join host, Penelope Hamilton and her expert guest, Isaac Bock of Alphroot on this episode of The Cannabis Community Insider. AR offers insurance coverage to the cannabis industry From Seed to Sale and every ancillary need. Forget the bygone days’ image of what business insurance looks like. The cannabis space is unique and this team of Industry veterans offers knowledge beyond insurance. AlphaRoot’s mission is to strengthen and legitimize the Cannabis industry.

Introduction to AlphaRoot 00:07

• Penelope introduces Isaac Bock as a guest.
• Isaac is a Managing Director at AlphaRoot, a full-service commercial insurance brokerage.
• AlphaRoot specializes in insurance coverage for cannabis, hemp, and CBD businesses.
• They work with a full suite of insurance companies and can help any business related to cannabis, whether plant-touching or ancillary.
• AlphaRoot can be a one-stop-shop for cannabis businesses related to insurance.

Coverage Areas 00:47

• AlphaRoot can help get insurance coverage for anything that ensures a business related to the cannabis industry.
• They work with the full suite of insurance companies and can help anyone whether you’re plant-touching or ancillary.
• They can handle all the companies involved in the full feed to sale process.
• AlphaRoot also helps ancillary business models that support the cannabis industry, like financial services, media, advertising, accounting, and others.

Employee Related Health & Benefits Insurance 01:36

• AlphaRoot doesn’t focus too much on employee-related health and benefits insurance at this point.
• However, they do have a partner for that as well.

Isaac Bock’s Background 02:09

• Isaac fell into the insurance industry in college and planned to attend law school.
• He worked at a larger insurance brokerage called Marsh & McLennan and then at Founder Shield, which focused more on the venture tech side.
• Founder Shield’s focus eventually led into many emerging markets like cannabis, cryptocurrency, micro-mobility, and shared economy.
• Isaac’s interest in cannabis came from using CBD for pain management.
• He is currently working on his Masters of Science in Medical Cannabis.

Importance of Understanding the Industry 04:36

• Isaac’s colleague from Founder Shield introduced him to the program at the University of Maryland.
• Though most of what he’s learning does not apply to his day-to-day job, speaking with clients and others in the industry and understanding what’s happening is extremely vital.
• Understanding how certain aspects affect the end consumer’s high or experience is also vital.
• They want to be viewed more as part of the cannabis community who just happens to do insurance rather than a team who doesn’t understand cannabis.
• This gives them an edge in understanding their clients and what they need.

AlphaRoot’s mission statement 06:39

• AR wants to strengthen and legitimize the cannabis industry.
• They are not just providing a service but are advocates for the plant.
• Their conversations with clients focus more on education and consultation than immediately placing their business.

Unique insurance challenges for cannabis businesses 07:40

• The actual coverages for cannabis businesses are the same as any other business.
• The biggest obstacle is working with carriers and people who understand the industry and its risks.
• A limited number of insurance carriers write policies for cannabis companies.
• The biggest hurdle is on the directors and officers side of insurance.
• AR is working on a proprietary product to cover this area.
• The industry faces challenges related to legitimacy, and many people still view it as an underground and illegitimate business.

AlphaRoot’s involvement in the industry 10:27

• AR is fully licensed in all 50 states.
• They understand the Canadian market as well.
• They are involved in overseas exposures.
• Working with a local broker rather than AR might make more sense depending on the business size.

Worst insurance nightmare story 11:06

• There haven’t been any product-related claims.
• The directors and officers market for public companies has been a nightmare in general.
• There was a VP Finance of a company who said to the underwriters that she disagreed with the valuation they were receiving from an investment bank.
• The underwriter was immediately out of the running for underwriting and a lot of hand-holding and patchwork needed.
• This experience has added to AlphaRoot’s experience in the industry.

Insurance advice for startups 13:55

• Don’t sacrifice coverage for premium savings upfront
• Work with your insurance advisor to understand the coverages you’ll need long-term
• Understand the true costs of insurance for your business once you’re up and running
• Plan for insurance costs ahead of time to avoid an impact on your balance sheet
• Get pricing expectations from your insurance advisor
• Insurance is more expensive in the cannabis industry than in any other industry

AlphaRoot’s DMO Product 13:10

• AlphaRoot is working on a DMO product geared towards private companies
• The market for private companies isn’t as bad as for public companies.
• The company should have an announcement before the end of the summer when the DMO product is fully up and running

How to contact AlphaRoot 16:05

• Visit the website alfrue.com for vertical-specific one-pagers on insurance and overviews of insurance you’ll need
• Reach out to Isaac, the interviewee directly via email (isaac@alpharoot.com)
• AlphaRoot offers free consultative reviews for insurance
• AlphaRoot’s directory listing is available on the cannabiscommunity.org website