CLIC Management has been given approval to form CLIC Risk Retention Group (CLIC RRG), the first dedicated risk retention group for the cannabis industry.
CLIC RRG will serve businesses and individuals involved in the sale, manufacture, cultivation, transportation, and testing of legalised cannabis-based products. It will be open to all businesses in the industry that want to join.
CLIC opted to form an RRG because it allows the insurer to operate across multiple states, with regulatory oversight provided by a single state, Nevada, where it is domiciled. The RRG will operate in that state, as well as California, Colorado, Oregon and Washington. It will only be offered in states that have legalised cannabis use, and will not be open to foreign businesses, for example those in Canada.
The insurance company will initially provide general liability and product liability, but other lines will be offered over time as and when owner-members need different forms of coverage.
“The cannabis industry has continual problems getting insurance from traditional sources,” said Chris Payne, CEO of CLIC Management. “Premiums are extremely high; very few insurers offer coverage; and no policyholder-owned option has existed until now. The industry needs a specialised offering that is owned by, and operated solely for the benefit of policyholders.”
Payne said the programme will emphasise careful risk selection, aggressive risk management and a commitment to consumer safety.
CLIC RRG has received a certificate of authority and is in the process of raising funds. It is looking for key policyholders who can act as board members that can contribute capital to the venture. The board will supervise operations, with CLIC RRG insureds required to adhere to the best safety practices in the industry, as determined by the RRG’s board.
CLIC Management, CLIC RRG, Chris Payne, Cannabis