This is part of a series of articles from the annual Insurance Magazine Hemp top insurance On the 14th of October. You can find more articles from the top at the bottom of this article.
Having a niche makes one unique, an expert in a specialty with few peers to pull the business.
John Balian, director of the cannabis industry practice at Wood Gutmann & Bogart Insurance Brokers, has a place of his own. He specializes not only in cannabis insurance, but in the insurance of tribal cannabis operations.
Balian, who also sits on the US National Cannabis Association’s advisory committee, isn’t afraid to share one piece of information from his unique market: he believes it will continue to grow, and has plenty of opportunities for insurance professionals.
Of the 574 federally recognized tribes in the United States, it is estimated that at least 100 are actively involved in the cannabis trade.
“I think that number will go up,” Balian said.
He was speaking in an additional video during Insurance Magazine’s annual Cannabis Insurance Summit on October 14.
Besides the opportunities in the space, Balian also touched on the ups and downs of tribal hemp, a sector that requires a lot of organizational knowledge and business acumen to navigate.
His business book consists of everything from very small startups to some significantly larger operations.
“I would say my biggest account on tribal cannabis is a very important rental operation that leases space, both indoors and out, for a variety of cannabis businesses, both clan and non-tribal,” he said. “But we also have dispensaries, we have processors, we have farmers.”
He was asked who is his rival in securing tribal cannabis – there is not much, but there must be a little, right?
“I’m not specifically aware of any other broker that deals with tribal cannabis, but that doesn’t mean they aren’t there,” Balian said. “I think you will see more and more brokers getting involved in it. Tribal insurance generally means a niche area but there are obviously brokers because I compete with them all the time. They are into it, I just haven’t come across anyone who does cannabis either.”
He estimates that there are at best 10 carriers who will write tribal cannabis risks, though he believes that number will increase.
“I think you will see more and more carriers getting involved,” he said. “They just need to get over their concerns about tribes, especially tribal sovereignty and how that affects insurance policies, and that’s what scares a lot of carriers.”
Watch the video above for an explanation of tribal sovereignty and how it affects the insurance market.
Despite the obstacles—which include high insurance rates and lack of availability, as well as numerous regulatory hurdles—more and more tribes are finding cannabis to be a good business to be in.
“I have seen the tribes that work in this field grow,” he said. “One of the challenges they face is that if they are not state licensed, it will really reduce their customer base.”
Balian explained that most tribes have their own regulators and license their cannabis operations to them, but if they do not have a state license, it is difficult for them to sell it to anyone other than tribal buyers.
“So, that’s probably the number one barrier to seeing greater growth,” he said. But I think countries hope to become more educated. Given that most of these are tribes, their regulatory guidelines are in many cases, much stricter and better than what you see in the state. So, it’s a learning process, but I think it will continue to grow.”
His advice to mediators interested in entering the space is to learn about tribal culture, understand how tribal governments work, understand the reticence of some older tribal members from engaging in cannabis use, and learn some knowledge of sovereignty and how it affects it. Competitiveness in the insurance market.
“But it’s really no different than any other successful broker,” he added. “You need to learn the business, listen to your customers, and have a strong work ethic. To be honest, I don’t think it’s rocket science.”
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