What Insurance Financing Options Are Available for the Cannabis Industry?
There is no denying that the start up and operating costs for the cannabis industry are incredibly high. Any opportunity to manage these costs can help businesses, especially new ones, to minimize initial cash needs by breaking these high costs into smaller payments. However, methods of doing so vary widely in availability and costs. Let’s take a look at financing options for cannabis insurance policies that can help you offset the upfront cost of protecting the value of your business against risk.
For most businesses not operating in the cannabis space, getting funding through a bank loan is often as easy as walking into your local branch. The same is not true for cannabis companies. Depending on the type of business you manage, the likelihood of securing a bank loan or similar financial services from traditional banks can widely vary.
Federally backed banks don’t want to risk potential repercussions from the government for working with what is still considered an illicit drug at the national level. There is legislation in congress to extend protections to banks that work with cannabis companies, but the bill – known as the SAFE Banking Act – has continued to stall out, despite passing in the House six times. Until this or similar legislation passes (or federal legalization becomes a reality), banks are unlikely to provide services to cannabis companies.
There are some financial providers that exclusively provide services to cannabis companies. For businesses working directly with the cannabis plant and its extracts, this can be a unique opportunity to take advantage of services like asset storage, credit processing, credit lines, and loans.
Unfortunately, some of these financial providers capitalize heavily on the difficulty that cannabis companies face when securing financial services. These providers sometimes charge far above market interest (up to 30% APR) or add predatory fees simply because they know cannabis businesses have little other choice.
Premium Financing Options
Many cannabis-related businesses choose to avoid high interest loans in favor of alternative financing options. Companies working with CannGen automatically have access to Next Wave Premium Finance (NWPF). Insurance finance specialists with top insurance broker clients, NWPF has established a reputation for professionalism and reliability servicing a range of commercial industries. However, NWPF is also one of the few finance providers to work with cannabis companies, giving them insight into the intricacies of the developing cannabis industry.
Because we partner with Next Wave Premium Finance, we are able to provide a premium financing agreement with every quote and requote we make. This makes the process of attaining and financing your cannabis insurance a seamless, straightforward process.
Next Wave Premium Finance understands that cannabis companies come in many different forms, so they don’t try to force your business into rigid finance plans that don’t make sense for your needs. Instead, NWPF drafts custom terms and rates for each customer, helping even the most complex accounts get the right finance plan.
Learn more about insurance financing with Next Wave Premium Finance.
Protecting Your Company Against Risk
You can insure your cannabis business against risk with a comprehensive insurance policy. If you don’t currently have an insurance provider, it is important that you find a partner with prior experience working with cannabis companies. They should also have the necessary knowledge of state cannabis regulations to ensure your business is fully compliant and covered against potential risk. Contact CannGen here to see what coverages you need to best protect your business.
More Cannabis Industry News
Want to stay up to date on the latest? You can find more on important topics in the cannabis industry on our news page.
Or get more information about comprehensive insurance solutions for the cannabis, CBD, and hemp industries from CannGen here.
Disclaimer: Information shared is for general purposes only.