Issue link: https://nebusinessmedia.uberflip.com/i/1466951
15 HARTFORDBUSINESS.COM | May 9, 2022 Any bank can give you a decision. NOT ALL OF THEM replace red tape with decision makers who can give you an answer quickly. Our local teams have helped Connecticut businesses for more than 220 years, let us help you. Visit washtrust.com or call 800-475-2265 Member FDIC. A Curaleaf employee inspects a harvest. HBJ PHOTO | STEVE LASCHEVER Department but are still allowed to write coverage in the state in certain areas. Admitted companies have to meet certain financial requirements with the CID and file rates and contracts with the department. "We don't oversee them," Bradner said of non-admitted companies. "If something happens to this company and the insurer goes bankrupt, there's no protection under the state guaranty fund." Non-admitted companies are usually allowed to provide coverage in higher-risk markets, George said, and could step into Connecticut's cannabis market. They often come from states that have already legalized cannabis so they have experience covering the sector. "There are insurance companies and brokerage firms, such as [California-based] Cannasure, that specialize in serving the cannabis industry, so cannabis businesses do have some options," Westby said. Other specialty insurance players include The Cannabis Insurance Co., which popped up in Colorado years ago and now serves other states, and Delaware-based Admiral Insurance Group. Collins, of insurance brokerage HPM, said she had been wanting to get into the cannabis industry for years and was happy that her firm had a more progressive mindset to serve the industry. "At HPM we really focus on identifying with entrepreneurs in the cannabis space and helping them identify the risks, and really helping them be successful in this because it is so nuanced — it's a brave new world," Collins said. She said HPM partners with more than 45 insurance carriers that have willingly worked with cannabis companies as states have legalized marijuana for medical and/or recreational use. Cannabis businesses can also think about forming captive insurance companies to manage their risks, according to the CID report, as long as they meet certain regulatory requirements. Bradner said his agency hopes the American Association of Insurance Services (AAIS), a national insurance advisory organization, files a cannabis coverage policy in Connecticut, as it did in California in 2018. That would help establish template contract guidelines and policy breakdowns that could ease the entry of admitted insurers currently shying away from the market. "It's nice when you have an organization like AAIS that develops those contracts, because there's standardization into contractual wording that is used versus companies being all over the place with different wording," Bradner said. Collins said she thinks more smaller insurers and brokers will continue to pop up in Connecticut as businesses get licensed and start to enter the cannabis industry. Eventually, some of the big players may also get past their reluctance, when and if federal restrictions are eased. "To get the larger insurers to feel comfortable in insuring the cannabis industry, there really does need to be changes at the federal level," George said.