POT PROTECTION

Insurance Agents Are The Latest To Cater To Colorado's Budding
Business

While some Colorado lawmakers are instituting moratoriums or
redesigning zoning laws to stomp out the burgeoning medical marijuana
industry, the business sector sees opportunity. It wants a piece of
the pie - or the brownie, as the case may be.

And as businesspeople reach out to dispensaries, something magical is
happening: Medical marijuana is starting to look a lot like a
business. A real one. Dispensaries are paying taxes, they're
following OSHA regulations, and, increasingly, they're buying insurance.

Now, the insurance industry isn't exactly known for its flair for
adventure. So when Californian Mike Aberle started thinking that
insuring medical marijuana dispensaries and cooperatives would be a
swell idea, he didn't rush into his boss' office at Statewide
Insurance Services corporation in Rancho Cordova. When he finally did
bring up the subject, he was surprised by the response.

Yes.

Breadth of a salesman

A few years later, Aberle's idea has grown into Statewide's Medical
Marijuana Dispensary specialty unit, which has a staff of 10
dedicated to tailoring insurance packages for the pot industry. The
program, which currently insures about 120 dispensaries, recently
branched into Colorado, and has snatched up quite a bit of business,
though no Springs dispensaries have signed on so far.

Statewide isn't the only company offering insurance packages to
dispensaries, but Cameron Lewis, spokesperson for Colorado's Division
of Insurance, says it's hard to track who is.

"Unless they are also marketing it and bringing attention to their
concept, there isn't any way we would know," she wrote in an e-mail.

Aberle says dispensary owners are great customers. They're willing to
go the extra mile to secure policies, even installing security
measures that rival those at most banks. And they're dedicated to
keeping claims to a minimum, alleviating concerns that carriers may
have about extending their services to an emerging, controversial and
- - let's face it - federally illegal business.

"Knock on wood," Aberle says, "we have a zero loss ratio with our
clients right now."

Statewide's tailored packages usually include general liability,
property coverage, crop coverage (for growers), workers compensation,
auto insurance (for companies that do deliveries), and product liability.

The packages take into account dispensaries' unique risks. For
instance, most small businesses don't buy workers compensation
insurance for owners or officers. But dispensaries usually want that
coverage, because there's a higher chance of being robbed or
assaulted - just as there would be at a bank. However, unlike a
bank, dispensaries also have to worry about product rotting, or
plants dying due to equipment failure.

"This industry is so specialized," Aberle says. "You really need to
know what you're doing."

Done right, Aberle thinks insuring medical marijuana will cultivate
more credibility and more acceptance from the public. That last part
means a lot to Aberle, who watched his stepmother suffer and finally
succumb to ovarian cancer.

She didn't try medical marijuana - partly because of conservative
values, but also because she was afraid of how others might judge her
if they found out.

"That's how I got into it," Aberle says, "because I saw the
compassion side of it."

Flowers among the weed

Kristal Bernert sees lots of people like Aberle's stepmom. Bernert's
a Denver attorney and certified public accountant - the person you go
to for those major changes in life. Like starting a new business. Or
writing a will.

While settling estates for her clients, Bernert would talk to them
about how they were weathering the last days of their lives. And many
of them, she noticed, were saying the same thing: Thank God for
medical marijuana.

"[Pot] helps alleviate pain," she says. "It helps assist people and
make them more comfortable."

It was a mix of compassion and legal curiosity that led Bernert to
create Denver's Zen Dispensaries, which will open soon. She wanted to
be a part of the movement. She wanted to have a say in how laws and
regulations are crafted. And she wanted to be yet another dispensary
demonstrating that yes, this is a business. And it can be run like
one.

So before she opened, she got a sales tax license, installed a
security system and signed up for one of Aberle's insurance plans.

"Because [as an attorney] I'm in the practice of starting small
businesses, I think insurance is key," she says. "Being an attorney,
I see what happens. There's all sorts of things that come up, and it
could cost millions of dollars."

Tanya Garduno, a licensed caregiver and grower who also serves as a
director with the Colorado Springs Medical Cannabis Council (a group
trying to guide City Council on regulating the industry), says she's
all for insuring dispensaries, taxing them, and even requiring
special licensing, so long as it's practical and fair.

"We're working really hard to be as close to other businesses as
possible," she says.

But applying all the normal business practices to medical marijuana
may not benefit everyone.

Kevin Jones, who runs Nature's Remedy dispensary out of his home
south of the city, says he's trying to follow the rules - he licensed
his business and pays taxes. But as a small start-up, he can't afford
to install the security he'd like, let alone buy a pricey insurance
policy. And until he can move the dispensary into its own retail
location as planned, he doubts any insurance company would cover him.

He's probably right, according to Aberle, who says anyone he insures
has to have airtight security.

"We're at a crucial time in history when it comes to insurance and
medical marijuana dispensaries," Aberle says. "The dispensaries have
to look at themselves like a bank from the aspect of being robbed."