“The majority of the people who are following their passion and embarking on cannabis businesses have not actually run a business before,” says Zalkin. “But because of the lack of federal regulations and guidelines, the industry is constantly changing. You can do what you can do, what you have to do. And it's just really overwhelming to run these businesses, especially without the experience or the business acumen of what it takes to run a business.”
Zalkin says her association “exists to provide cannabis business owners, entrepreneurs, the dreamers who are dreaming of being involved in the industry, the tools to be a better business owner.” Founded in 2018, the NCRMA, Zalkin says, now has offices throughout the country, including in Colorado, Arizona, California, and Michigan. It’s also listed as having a Pittsburgh-area office in Warrendale.
The association touts itself as “the leader in providing cost effective and comprehensive non-traditional risk management services to the cannabis market through education, support, and expertise.”
Zalkin says NCRMA seeks to help protect cannabis businesses that, because of uncertainty over state-by-state regulation, have trouble securing insurance.
NCRMA claims that, according to its members, the limited insurance offerings available to cannabis providers “have high premiums and inadequate coverages and services,” which the association says have “hampered the success of the cannabis industry.” One Chicago Tribune article from April 15 says that, despite the major economic boom adult-use and medical cannabis brought to the state of Illinois, dispensaries “still had to pay higher insurance premiums for what insurers consider high risk activity.”
As a result, the NCRMA endorses Trichome, described as a suite of insurance products “designed to serve the needs of its members and the overall cannabis industry.” Rocco Petrilli, chairman of the NCRMA, says Trichome is a direct response to a need for “fairly priced and risk management-based insurance coverage to a rapidly emerging and evolving industry.”
In March, NCRMA also launched Health ReLeaf, a health insurance program made specifically for cannabis companies.
Zalkin says that services and products like those offered by NCRMA will be necessary until the country adopts federal legislation legalizing medical and, hopefully, recreational marijuana. For now, though, cannabis providers are subject to each state trying to keep up with the industry, wanting to make products accessible while also imposing regulations.
The lack of protection can have devastating impacts on cannabis business owners, says Zalkin. She cites how, earlier this year, Michigan issued a major marijuana recall, claiming that products had been improperly tested. One source in a Detroit Free Press story said the recall likely affected more than $200 million worth of marijuana products, leading to a huge loss of revenue for many state dispensaries and growers.
Zalkin believes that insurers will have to keep up and change as the cannabis industry will only keep expanding.
“The industry is growing, it's here to stay,” says Zalkin, adding that Oklahoma, for example, has “more dispensaries in that one state than there are collectively in the rest of the country.”
“And so a lot of the insurers are seeing an opportunity there, but they don't understand the business models, they don't understand the needs,” says Zalkin. “So a lot of the insurance that is being offered, there's holes, there's gaps, there are areas not covered, that people and businesses are still being forced to learn the hard way.”
She says marijuana dispensaries and growers can also face the same issues as restaurants or bars, such as being shut down by inspectors for not meeting certain health codes, or having to cover an employee who gets injured on the job.
Zalkin says that, while insurance can offer support after a setback, NCRMA wants to help businesses avoid encountering problems in the first place. She says NCRMA exists to “educate and support through the understanding that insurance is there after a happening, and it will never necessarily make you whole.”
“Whereas risk management is being prepared, it's understanding the underlying risks,” she says, “it's understanding that things that you might not be able to see day to day that could potentially, over time, be a cause for derailing your day to day or derailing your business goals as a whole.”
National Cannabis Risk Management Association, ncrma.net
