Written by: Barry Galvin of AlphaRoot
If your cannabis company is just starting out, the first and most important step is to proceed with caution. While it’s nearly impossible to completely eliminate challenges and risks, working on the best cannabis risk management plan can help you avoid many.
Since the cannabis market is still developing, you should lay a solid groundwork for your budding business. It will help you gain the confidence of insurers, investors, and other important partners that you are going to work with later on.
You’ve undoubtedly also heard about cannabis insurance and how important it is to protect you and your newbie business.
If you’re a young cannabis company owner on the rise, this article will show you how to handle cannabis risk management like a pro.
Important Considerations in Cannabis Risk Management
The following are the four most important aspects of cannabis risk management that can greatly benefit your budding company:
Handling the Unexpected Problem of a Bumper Harvest Unprecedented Cybersecurity Landscape
Only accepting cash makes cannabis companies easier targets for theft and other major criminal activity. Moreover, the zoning laws make these crime and theft risks even worse. As a result of restrictions imposed by local governments, cannabis dispensaries are often pushed to operate in less secure areas of town.
Cyber liability has been in a downward spiral since the beginning of the global health catastrophe.
For instance, because budding companies lack the capital to take help from robust cyber security, they are particularly susceptible to cyber-attacks. The loss of confidence from customers due to a data breach or stolen information is a major reason why businesses should invest in cybersecurity protection.
The risks that come with cash-based cannabis businesses must be taken care of from the very first day. The major steps include protection against theft, crime, and financial loss.
Protecting High-End Property and Vulnerable Crops
The challenge of dealing with a bumper crop is among the most hectic ones for a budding cannabis business. Farmers may have to choose between going into the red by selling their crop at a low price or risking its potency while they wait for a higher offer. This usually happens when there is a price decline or glut in the cannabis market.
Even though this isn’t a common issue, it’s still important to prepare for it by amassing resources and keeping your choices open. You can do this by spending a lot of money on high-capacity, well-insulated storage containers that maintain your cop’s potency.
In addition, you should seek out additional customers to offer your crop. Find other major companies that produce cannabis products. You can enjoy a well-studied production chain rather than relying solely on smokers as your final supply destination.
Cannabis insurance by Alpharoots also protects crops, which is helpful in times of low prices.
Employee and Workplace Safety
Your cannabis business can take any form you like, but one thing that your company will unquestionably need is a secure environment and sufficient technology. It’s crucial for the security of both your goods and your staff.
For cannabis businesses, there aren’t many rules and regulations by the authorities regarding the workplace. However, it is your job to consider typical issues your employers may face.
When considering the tools and machinery required to complete a job in a lawful and secure manner, keep an eye on everything, from power tools to computer programs.
Safes, procedures, and cash transfer plans should all be in place to meet the regulations of different states. Moreover, a sufficient number of cameras should be installed.
You also have important stakeholders among your company partners and staff. People who aren’t reliable or who try to surprise you with their negative motives are an inevitable part of doing cannabis business.
Cases of stolen cash or marijuana are more common than anyone ever thought of. With all this in mind, choose your business partners carefully.
Additionally, business owners need to be extra careful when transporting cannabis to avoid theft. From the factory to the consumer, theft is possible at every step.
In the end, a dependable and skilled staff is a must-have. However, take all the possible precautions when making new hires. Only hire people over the age of 21 who have never been in criminal activity before.
Mindful of Ever-Changing Regulations
The cannabis market is one of the most volatile industries and the rules are constantly shifting.
The speed at which new cannabis goods are being introduced to the market is creating unexpected difficulties for newcomers. Extracting, packaging, storing, and distributing new cannabis goods calls for more research and better strategies at the moment.
If there are too many state restrictions placed on you, the growth and success of your budding company will suffer.
So, it is important to be wary of any statutes or regulations you lack knowledge about, as well as any other ambiguities that you might face.
If you’re confused about the legislation regarding cannabis, it’s a good idea to talk to a cannabis insurance expert. To prevent mistakes or suspicions, be sure to keep track of all of your production, sales, and profits.
Successful cannabis businesses in 2023 will be those that have developed comprehensive cannabis risk management strategies and that hire industry experts to ensure that their cannabis insurance policies adequately protect against the risks they face.