Editor’s note: This part of a series of profiles on cannabis brokers, in which Insurance Journal explores why and how these folks got into the business, the ups and downs of insuring cannabis, as well as a few tips for those interested in a little professional development.
Pizza and cannabis go well together. That’s probably becoming truism for a growing number of people, but few may know that as deeply as does Jesse Parenti.
Parenti is director of national programs for Woodland Hills, Calif.-based PCF Insurance Services and program director of Nine Point Strategies, it’s cannabis-focused insurance division, and PizzaSurance, its food and pizza delivery division
The insurance veteran of 15 years was formerly the programs director for Stratton Agency before it was acquired by PCF Insurance services. At the time, his specialty was hospitality, fine dining restaurants, pizza and food delivery. Then he got into cannabis, and has been specializing in the industry for roughly five years.
Parenti is involved with several cannabis groups, including the National Cannabis Industry Association, and the California Cannabis Industry Association.
Parenti spoke with Insurance Journal about his experience as a cannabis broker.
Insurance Journal: Why did you get in the cannabis and insurance space?
Parenti: I have family and friends that have been cottage growers for over 20 years. Protecting and having them be able to have a legal farm was very exciting to know could happen. When we saw the opportunity that was happening in Colorado, Oregon, Washington and California, we went all in.
We were already licensed on all 50 states for our pizza and food delivery program, so implementation was pretty easy as states moved forward with some form of legalization. We wanted to be there from the beginning.
IJ: Has this been a good financial decision so far?
Parenti: It has been a game changer. I went from 100% food and delivery to 100% vertically integrated cannabis.
Bringing our best practices to cannabis concerning commercial auto and workers’ compensation, from what we built for food has made a major difference for us at Nine Point Strategies. These are two of the largest expenses for cannabis operators and we have built exclusive or proprietary markets for their needs.
IJ: What’s the hardest thing about the cannabis industry to deal with?
Parenti: Professional liability was already hard to place and now it’s becoming even harder with the markets tightening up for directors and officers and employment practice liability.
The unfortunate actions from some executives in cannabis have caused a lot of large lawsuits the last year with a few large MSO’s and this has caused the market to respond. We don’t see any relief anytime soon unfortunately.
IJ: What insurance product is the most difficult to obtain for your cannabis industry clients? Why?
Parenti: Outdoor crop is the most challenging thing we can’t solve. There is no real product for outdoor cultivators to buy and have peace of mind. Indoor crop is offered, but it falls under property and applies to their perils for coverage.
We hope to develop a product over the next year with a carrier partner to solve this problem that is only growing as the marketplace expands nationally.
IJ: What two or three tips do you have for brokers entering the business of insuring cannabis?
Parenti: If you are serious about getting into cannabis/hemp risk management world, be 100% all in. You have lots to learn and you can’t just try to write one here and there if you want to be successful. Like anything in the insurance world, specialization creates diversification.
Make sure to dedicate time on contracts, and the differences between carriers and exclusions. This is the world of cannabis and hemp and you either have coverage or you don’t based on the exclusions and or warranties.
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