David is joined by Larry Harb of IT Risk Managers, Inc. to discuss insurance for businesses in the cannabis and hemp industries.
About this segment of Blackbird TV
Recorded: December 9, 2020
Published: March 23, 2021
Joining me on this segment of Blackbird TV is my friend Larry Harb. Larry’s with IT Risk Managers. Larry what do you see happening in the hemp market, and why are you focused on this? Are you insuring in the hemp business? Well, David, thanks for asking and inviting us to participate today. To answer your question, the simple answer is yes, not only are we doing hemp but we’re also doing THC-based products. [Right.] We got into doing cannabis and cannabis derivative products about four years ago. I started a new division of IT Risk Managers called 420 Friendly Insurance [what does that mean?] that’s what we market under is 420 Friendly Insurance, it’s a DBA for IT Risk Managers and what we do is we’re insuring cannabis and / or hemp. I’ve gotten really involved in the hemp marketplace because since the 2018 farm bill what’s happened is hemp has become legal under the 2018 farm bill and that’s the good news, and in actuality, David, since then, I’m happy to report that 420 Friendly Insurance is now able to offer USDA-backed, federally subsidized crop insurance for hemp. Which we’ve never had access to before it was never available so I’m very excited about that and that’s what’s really got me moving in the hemp market. But, here’s the thing and here’s what I was trying to react to the other day, one of the issues in hemp today is it’s legal under the farm bill, however what they legalized was the hemp product. And the hemp product they legalized cannabis with less than .03 percent THC is legal under the farm bill, but what they didn’t legalize yet is the extract. When you extract the oils or the CBD cannabinoids out of the hemp plant, technically that’s not legal yet, and I say it’s not legal here [wait a minute it’s at 7-Eleven, I got it right down the street] exactly and here’s the issue you’re running into: it is at 7-Eleven and FDA, which is going to in fact supervise the hemp product, has not come out with the regulation. So here’s the issue: if you have a hemp program that’s under a state-run program and you are licensed under that program and you grow hemp in let’s say Michigan and you process that hemp in Michigan and you sell it in Michigan, it’s a legal product. [it’s okay to do that?] It’s okay to do that. [All right. What happens when you ship it to New York?] That’s the issue. Once you go across state lines, you become interstate commerce and that’s when it is really muddy and becomes still technically federally illegal, and there’s no guidelines. So from an insurance industry’s perspective, nobody wants to touch it. I can insure THC based cannabis easier than I can ensure hemp-based cannabis today just because when you have a THC-based program there’s guidelines, there’s parameters, it’s all laid out we know what the rules and regs are we don’t for CBD-based hemp today and therefore the regulators are just treating it as being illegal at the moment. [Kind of the wild west, right?] Well, yes you’re not seeing a lot of enforcement, but they can if they wanted to and that’s the issue. I can insure THC easier than I can insure hemp today, which is what the problem becomes. [And you and I have talked about this in the past relative to Blackbird’s business and conducting auction sales within this space so we we’ve had lots of conversations about it in the past and things are changing rather quickly and I’m in New York State, I think that they’re going to be legalizing the THC side of it very soon, because there’s quite a deficit they’re going to have to fill next year, when it comes to their their finances in the budget, so…] Unfortunately that’s where every state is going especially now after Covid, in fact you just saw the house pass a bill to legalize cannabis on a federal level, primarily for that reason so that they can give states the revenue and the tax revenues, because that’s what everybody’s looking for they’re all looking for new buckets of money right now and so you’re going to see that happen, unless the republicans retain the senate and if the republicans retain the senate you’re not going to see the bill come up, I don’t think, if the democrats get the senate cannabis will be federally legal in no time. [Wow! There’s the crystal ball prediction by Larry Harb, at IT Risk Managers, this guy knows so much about everything catch his contact information on the closing panel, give him a call if you have any questions, Larry I really appreciate you joining us on Blackbird TV, thanks have a great day.] Thanks, David. appreciate the opportunity.