News Brief

PropertyCasualty360 Quotes Stewart on the State of the Cannabis Insurance Industry

January 6, 2021

Ian Stewart (Partner-Los Angeles, CA) was quoted in “Is Cannabis the Next Insurance Opportunity?” an article that appeared on January 6, 2021, in PropertyCasualty360. The still-emerging cannabis industry presents equal amounts of opportunity and uncertainty, with many watching the federal government to see where risks fall. “These fast-moving companies are often managed by people with more passion for the industry than experience running a business, particularly ones that can scale up as rapidly as those in the cannabis space,” according to Ian. This results in some management teams being “a little bit over their skis,” which creates difficulties when writing D&O policies. Ian explained that as these companies go public, they typically see leaps in D&O policy pricing. “Carriers are spooked, and for good reason, because they don’t know how to underwrite these  businesses,” he added. “As the companies grow and regulatory issues become easier to navigate, prices will come down. There still is going to be exposure because of the nature of these businesses, but it will look more natural in a year or two than it does now.”

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