No More Risky Business
In today’s increasingly complicated cannabis marketplace, business owners must employ every tool in their toolbox to ensure success. Fresh new products, increased digital engagement, and consumer-friendly retail spaces can grab all the attention and help drive profits. Still, there is one critical area that is routinely overlooked.
We are talking about risk management. While it’s not as sexy as many other parts of the industry, it is crucial to ensuring your long-term health and possibly survival. Ensuring that inside any cannabis business’s four walls that their property, product, worker safety, banking, and on-premises risks are secured is no simple task. While many people think that by having insurance, they are safe, they are incorrect.
“Any risk has the potential to make your business worse, period,” says Rocco Petrilli, the CEO and president of the National Cannabis Risk Prevention Services (NCRPS). “So, if you can mitigate and eliminate that risk, you improve your business. Nobody has ever mitigated risk by buying insurance coverage. Insurance simply shares or transfers the risk that can’t be fully reduced. What successful businesses do is take care of any risks up front.”
NCRPS is a pioneering and innovative risk management platform that solely focuses on the complexities of the cannabis world. Their members enjoy access to a whole suite of educational materials and access to cannabis-focused partners, and insurance plans. But one of their most critical offerings is their expert risk management assessment.
By crafting a complete risk assessment from time spent by one of their team, they identify and completely break down everything into easy-to-understand sections. Each facet of your business has a risk score detailing any identified issues and a list of recommendations to solve them. By using tried and true safety standards for non-cannabis industries and the many cannabis-specific problems, they know and understand, they can create a detailed action plan to ensure a safe workplace and peace of mind.
They are not finished once they hand over their report. That’s when NCRPS can bring their whole host of in-house and service partner resources into play to ensure their clients succeed. This hands-on execution ensures your business safety, security, and success are secured.
Author:
sensimag.com
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Is the Delta 8 Loophole Closing?
The Nineth Circuit ruling created a loophole to sell psychoactive substances, like Delta-8, without an age limit, without a possession limit, and without any product safety or contamination standards.
Delta-8 is a cannabinoid found in cannabis but its natural quantities are low. Shortly after the glut of hemp and CBD oil in 2019 people started to synthesize the CBD oil into Delta-8 products. As of early 2021, Delta-8 was one of the fastest growing segments of products derived from hemp. The list of psychoactive substances derived from hemp keeps growing with Delta-8, Delta-10, THC-O, THC-P, etc. and they all fall under this loophole.
To recap recent history in this country: The voters in states that have legalized medical and recreational marijuana voted to regulate a psychoactive substance to patients and adults and to require the product be tested for potency and contamination. Then the 2018 Farm bill legalized hemp nationally. The understanding at the time was THC (Delta-9) was THE psychoactive substance. With hemp being define as 0.3% THC, the assumption was no one would ever get high from hemp products. That was obviously a wrong assumption…
When Delta-8 came on the market some states banned or regulated it while most have done nothing. Most people do not know what delta-8 is. Some products make it more confusing, like Delta-8 Flower. Most people I have talked to that have purchased it say they think it’s ‘natural’ and ‘grown that way’. What most don’t know is ‘Delta-8 flower’ is hemp flower sprayed with delta-8, and in many cases, it has not been tested for chemical residuals, pesticides, metals, or for potency other than THC (Delta-9). The lack of understanding of the product has led to product safety issues.
As of November 21, 2022 - 21 states have banned or regulated delta-8 while four are reviewing its legal status. Currently Delta-8 is legal in 29 states and DC, but that might all be coming to an end with another federal ruling.
‘A federal judge threw out a lawsuit against Kansas’ governor and attorney general that alleged $120,000 worth of delta-8 THC products destroyed by police were legal.’
In dismissing the suit Tuesday, the judge wrote that, “in short, no part of the 2018 Farm Act demonstrates an unmistakable focus to benefit plaintiff or other unlicensed possessors and sellers of hemp products.
“The 2018 Farm Act does not create a private right for plaintiff to (possess) and sell hemp and hemp products, either under Section 1983 or as an implied cause of action under the 2018 Farm Act itself.”
The question now is ‘what's next?’. Is this the end of the Delta-8 loophole? If so how do the feds enforce its new position. Many hemp operations will be impacted by this ruling and should prepare themselves for the change.
Author:
Alex Hearding
Chief IMPACT Officer
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You are Justifiably Confused, and Likely at Risk
Merriam Webster defines:
RISK- possibility of loss or injury : PERIL
INSURANCE- An arrangement by which a company provides a guarantee of compensation for specified loss in return for payment of a premium.
COMPLIANCE-the act or process of complying (to conform, submit, or adapt (as to a regulation or to another's wishes) as required or requested) to a desire, demand, proposal, or regimen or to coercion
RISK MANAGEMENT - The discipline of forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.
Unfortunate for grass roots cannabis businesses, varying “professionals” travel the industry using these terms interchangeably. If you are confused…don’t feel badly…you have every right…
As detailed by the definitions above, however, each are distinctly different with all having their place in a cannabis company’s strategy and business plan.
Let’s try to untangle this web...
Risk management or mitigation is fundamentally defined as taking an action to reduce the possibility of an event taking place. Insurance is designed to supplement these actions by financially transferring the portion of certain risks whose probability can’t be lowered to an acceptable level.
To further understand the differences between risk management and risk transfer, let’s look at the comparison below
Risk Management vs Risk Sharing
Risk Management
- Lowers the odds of a happening
- Keeps you whole
- Makes you better
Insurance
- Partial compensation for damage if it happens
- Never, ever makes you whole
- Always creates a setback
Additionally, many risks cannot be insured affordably, and certain risks can not be insured at all. Take talent optimization for example. One of the largest risks facing not only the US cannabis market but American businesses in general is finding the right people, putting them in the right paces and retaining them. There is no insurance market that transfers an ounce of this risk. Risk management is the only route of control (SEE PRESS RELEASE LINK).
Similarly, typical cannabis insurance and other financial services products are “pricey” as a result of the much overplayed “external risk of cannabis.” This is in a time where loss claims are low because of the presence of substantial coverage exclusions in a market where demand significantly outweighs supply. The likelihood of losses and their associated costs increases without effective risk management and further increases coverage prices.
Based on the above, one can only conclude that…
Risk management without insurance is imperfect …but insurance without risk management is illogical”
Now let’s look at compliance. The definitions cited above clearly point to compliance as something that YOU do to satisfy SOMEONE ELSE. I am in no way stating that compliance is not important as it provides many of the tools required for successful operation. Compliance is also key in maintaining licensing status and conformance with any multitude of regulatory requirements.
Where compliance falls short is that it does not necessarily teach one as to what tools to use and how to use these tools in certain situations. This is where risk management comes in. Where compliance is the tool box, risk management is the real application of the right tools to solve a cannabis company’s problems efficiently, reduce their fixed and variable costs and enhance their profitability.
Hopefully this clears some of the confusion. Now take action to put your compliance investment to work by clicking on the link below and completing the NCRPS 5-minute risk assessment.
Author:
Rocco Petrilli
CEO and President
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Reviving Seeds
Before legalization, most cannabis breeding was done with very limited numbers of plants to select from, and almost entirely with the aim of increasing yield and THC content. For these reasons many alleles—or specific variants of a gene that code for different traits—were lost. Some of these alleles contributed to the plant’s ability to survive, and reintroducing them into modern strains could result in plants that are more productive, disease resistant, and stress tolerant.
Enter the Seed Enthusiast! Dedicated seed collectors have been putting away cannabis seeds for decades, and there are many important collections. Despite the value of these seeds to our industry, many people are too afraid to try to germinate old seeds for fear of destroying them. There is very little good data on the viability of cannabis seeds in storage, but there are corollaries in mainstream agriculture. A date palm was grown from seeds that were 2000 years old a few years back, and the seeds of many other plants have been extensively researched. I also know an orchid grower who germinated 35 year old cannabis seeds from Afghan cannabis with a 75% success rate just by planting them.
More study is needed to determine the optimal methods for germinating old cannabis seed so that we can restore vigor and variety to the sea of cannabis strains on the market. If we want better cannabis, we need better genetics. Keep saving those seeds, but I challenge the industry to start cautiously figuring out how to get these genes out of storage and into our crop, the future of cannabis depends on it.
Author:
Andrew Hatch
Director of Product Safety
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New Service Partner: Kairos
Kairos Insurance Group Cannabis Division offers employee benefits plans including medical, dental, vision, disability, and life insurance. An agency founded in Colorado, we have over eight years experience helping cannabis businesses build multi-year strategies to provide the best value for the lowest premiums. Kairos is appointed with most major carriers and shops your plan every year so you don’t have to. Our founder, Summer Westerbur, has over twenty years experience designing employee benefits packages.
Open Enrollment:
The easiest way for a business to increase profitability is by decreasing costs. Does your broker quote every carrier at renewal? We have access to all major carriers. If you’ve been with the same carrier for several years, there’s a good chance you’re overpaying. Even if you’ve already renewed next year’s benefits, you’re not locked in. Carriers are required to honor those rates for a year, but you are allowed to switch carriers at any time. We still have time to reduce your premiums so your business can put that money to better use.
Current Trends in Group Health Insurance:
We’re seeing many healthy groups move to level-funded plans. Historically, these plans were only available to large groups. They’re now available to businesses with as few as five employees in some states. They require additional work upfront, but can be a great multi-year strategy for long-term premium stabilization. For healthy groups with lower claims, they also have the possibility of a refund at the end of the year. We also see businesses offering fully-insured plans with multiple plans options offering different levels of coverage to fit any budget.
What about Disability Coverage?
Many carriers continue to decline disability insurance to cannabis companies. Kairos has at least one carrier in each state willing to write disability insurance for cannabis businesses. We only write with A-rated carriers. Disability is a valuable benefit for businesses, especially during the Great Resignation. It’s important to offer a wide range of coverages in your benefits package to retain employment.
Easy Online Enrollment:
We understand the challenge of gathering your employees in one room for an annual enrollment meeting. However, employee benefits communication is an important strategy for employee retention. We work with you to schedule multiple in person or Zoom meetings to explain benefits, demonstrate finding in-network providers, and answering questions about benefits.
Call us at 719-331-1832 or email summer@kairosinsurancegroup.com for a free policy review.
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Webinar Video - Talent: The Last Greatest Differentiator in the Cannabis Green Rush
Watch webinar video hosted by NCRPS and PI Midlantic for an introduction into Talent Optimization: The new framework that cannabis owners/operators are using to mitigate risk with their most expensive asset, human capital.
We discuss the framework of how one’s behavioral assessment helps us mitigate risk from
hire to retire.
Sign up to stay up to date on all of our upcoming webinars and events.
National Cannabis Risk Prevention Services and PI Midlantic Join Forces to Bring Talent Optimization Solution to Cannabis
Two market leaders in the areas of talent optimization and disruptive risk management have combined to offer the industry a much-needed talent optimization solution to the people issues that challenge the sustainability of the current cannabis market.
By virtue of this partnership, PI Midlantic brings its proven and industry leading suite of talent optimization products and professionals to NCRPS and its broad-based risk assessment, risk education, strategy and execution insurance, cannabis vertical and banking/financing client base.
With over 700 clients in every industry and over 37 years in the business; PI Midlantic has consistently been ranked the #1 PI Partner in the world for the past 8 years.
"PI Midlantic is an integral part of our onboarding and employee development process, providing a wealth of knowledge and experience. They are a wonderful partner that is truly always available whenever we need them."
Dan Crumb, Vice President of Finance – Kansas City Chiefs
"Growth of the US cannabis industry will not become sustainable until it becomes profitable, " said Rocco Petrilli, CEO and President of NCRPS. "NCRPS has long maintained that EFFECTIVE risk management held the key to establishing profitability in the US cannabis market. Our partnership with PI Midlantic is further evidence of our conviction to define and positively impact the cost and risk profile of the legal cannabis market."
The partnership will kick off its offering with a webinar on November 9, 2022 and will feature multiple Talent Optimization course offering through the NCRM Academy. Cannabis individuals and companies will be given the opportunity to become clients of PI Midlantic and work with them to apply their many tools in the integration of a talent strategy into their business strategy.
"EFFECTIVE risk management attacked the cost line and there are few business areas that cost companies more than that of placing the right people in the right places", added Petrilli.
ABOUT NCRPS: NCRPS offers the cannabis industry an enterprise-wide business risk framework assessment and improvement process. Outputs of the assessment provide the client with a series of categorized risk scores (which are analogous to credit scores) measured against established best in class risk practices in a report that effectively provides a gap analysis and customized corrective action syllabus which directs the client to prioritize based on their criticality to business operations, cost control/reduction and continuous improvement objectives.
NCRPS recently combined with the National Cannabis Risk Management Association (NCRMA) and will serve as the lead brand while NCRMA manages association membership and the NCRM Academy's educational offerings.
ABOUT PI MIDLANTIC: PI Midlantic's Talent Optimization discipline focuses on developing your organization's people strategy and aligning it with your business strategy, creating overall better business result. PI Midlantic's priority is your organization's most important asset - its people. Our flagship Predictive Index Behavioral Assessment is used globally by over 7,100 companies. For more than 50 years, they have partnered with our clients to improve their productivity and profitability through PI Midlantic's core services: Encourage Smarter Hiring Process, Increase Employee Retention Rates, Enhance Executive Team Performance, Expand Staff Leadership Skills, Boost Internal Communications and Management Effectiveness
Are you ready to be accountable for your business?
Complete this form to talk to one of our IMPACT managers today to ensure financial success in your cannabis business.