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22 HARTFORDBUSINESS.COM | APRIL 7, 2025 Frontier Risk CEO James Whitcomb in his Norwalk office. HBJ PHOTO | MICHAEL JULIANO Managing Risk Norwalk-based cannabis insurance firm, with backing from Snoop Dogg-founded VC fund, has ambitious growth plans on additional outside funding." Frontier Risk provides insurance for all facets of the cannabis industry, from manufacturers and retailers to companies that provide software for legal marijuana businesses, he said. It also insures businesses that provide hemp oils and other cannabis-related products. Frontier Risk lists 18 types of coverage offerings on its website, from management insurance to protect companies against incidents like lawsuits, to cyber liability and prop- erty and casualty insurance to deal with issues like a fire or crop damage. "The cannabis plant is very fickle and it's hard to grow," Whitcomb said. "It's very susceptible to pests and environmental issues, so we do sell crop insurance in case your cannabis crop gets wiped out." Frontier Risk's most frequent claim is theft because cannabis retailers mostly only accept cash to conduct transactions, he said. "These stores carry a lot of cash, and they're getting robbed," Whitcomb said. "It's actually a hot topic globally." Competitive landscape Although finding cannabis insur- ance coverage remains a challenge, partly because the drug is illegal at the federal level, new players have emerged in the market. There are about 40 global insurance brokerages, Whitcomb said, that are new to the cannabis space, such as Hub International, OneGlobal, Lockton, Canopius and World Associates Insurance. Frontier Risk's competitors also include managing general agents like CannGen Insurance Services, Amwins' NutraRisk Division and Admiral Insurance. Major household-name insurers — such as Allstate, State Farm and Progressive — will stay away from the cannabis industry until it becomes legal at the federal level in the U.S., Whitcomb said. Long-term, Whitcomb said he's not opposed to being bought out by a larger player. "We are always open to those discussions, but the price has to be right," he said. Cannabis producers need to have insurance because the licenses and equipment needed to grow the plants are very expensive, said Shauna Blackburn, chairperson of the National Cannabis Industry Associa- tion's risk management group. "They are very prone to losing the equipment to fire and theft because people think cannabis producers have a lot of money, which is not true," Blackburn said. The cannabis industry needs more insurance providers and reinsurers because it is growing so rapidly, she said. "There are only a few reinsurers who are comfortable in the space because they don't have the loss history on that class of business," Blackburn said. "And there's still a stigma attached to cannabis." By Michael Juliano mjuliano@hartfordbusiness.com F rontier Risk may sit in a small, hidden office in the pictur- esque Rowayton section of Norwalk, but the cannabis industry insurance provider's plans for the future are quite grand. James Whitcomb, a former Wall Street investment banker who founded the business in 2022, aims to grow the fledgling firm into one of the biggest insurance players in the marijuana sector. "We want to be the No. 1 cannabis insurance platform in the world," he told the Hartford Business Journal. "I think we have a real ability to do that due to a combination of industry experience, pricing ability through technology and customer service, which is also enhanced through technology and experience." Whitcomb, who lives in Darien and grew up in Fairfield, entered the cannabis industry in 2016 when he joined Parallel, an Atlanta-based multistate cannabis producer, as chief financial officer after six years on Wall Street. "I took a very, very hard left turn into cannabis," said Whitcomb, who earned an MBA from the Columbia Business School. "I wanted to do something entrepreneurial where the industry had no roadmap. There was truly no other opportunity in the world to build roads and pave those roads than the cannabis industry." Since California became the first state to legalize marijuana for medic- inal use in 1996, 39 states have made it legal to use it medically, while 24 states have permitted using it for both medicinal and recreational purposes. Connecticut legalized medical use in 2012 and recreational use in 2021. As he moved his way up to CEO at Parallel by 2021, Whitcomb noticed that the U.S. cannabis industry was lacking options for insurance, which producers are required to carry by state law. "It was very hard to come by, some- thing that I just noticed all along and always thought about," he said. After leaving Parallel in 2022, he set out to start up a cannabis insurance brokerage. He took two former Parallel employees with him — corporate attorney Courtney Stough and Peter Berg, head of corporate development — and searched for other professionals with cannabis industry experience. "There's actually a lot of talent in the cannabis industry, and talent that is savvy in financial services, which is what I consider insurance to be," he said. In addition to self-funding, Frontier Risk received $500,000 in angel investment from New York-based IA Capital Group and San Francis- co-based Euclid Ventures in the fall of 2022, before recently getting $3 million in pre-seed funding from Los Angeles-based Casa Verde Capital, co-founded by rapper Snoop Dogg. The company has raised $6 million since its founding. The funds allowed Frontier Risk to hire 10 full-time employees and develop a proprietary pricing plat- form that Whitcomb says provides a competitive edge over global insur- ance brokerages that are just entering the cannabis space. "We are, in a lot of cases, helping to teach our clients about the industry," Whitcomb said. "Our competitors are learning about the cannabis industry through their clients." Market opportunity Frontier Risk offers brokerage services, connecting cannabis companies with products offered by other insurers. It also recently became a managing general agent, which is a specialized intermediary that is authorized by insurers to underwrite coverage, issue policies and provide claims manage- ment services. Frontier now under- writes and manages policies through its own cannabis insurance company via a partnership with Illinois Casualty Group. "We want to be much larger than all the cannabis specialty practice groups at these major global insurance companies that are tens of billions of dollars in revenue as entire compa- nies," he said. "That's really our goal." Whitcomb said Frontier Risk started earning revenue in June 2023, and now provides cannabis insurance through multiple insurers to more than 100 clients in the U.S. and Canada. It eventually plans to offer policies in Europe, Mexico and Australia by 2026, after getting a firm foothold in the U.S. and Canadian markets. The market opportunity is sizable — cannabis is a $35 billion global industry that is expected to grow to $100 billion over the next seven years, Whitcomb said. Frontier Risk is not seeking additional financing at this time, he added. "We have a line of sight to profit- ability," Whitcomb said. "Once we get profitability, that diminishes reliance AT A GLANCE Frontier Risk Industry: Cannabis insurance Top Executive: James Whitcomb, CEO HQ: 105 Rowayton Ave., Norwalk Website: www.frontierrisk.com Contact: 1-833-374-7475