Four years ago, insurance agent JB Woods took a gamble. Uninterested in the mundane challenges offered by his Allstate business, Woods decided to open an independent agency focused entirely on insuring medical marijuana dispensaries.
This year, as Colorado businesses begin to sell recreational marijuana, Woods is reaping the rewards of that gamble through an expansion of his client base and a dramatic increase in sales.
“The first three years were tough. It finally took off this year because all our clients are getting larger and larger,” Woods said. “We’ve had a medical marijuana industry that’s served 100,000 to 120,000. Now we’ve entered a phase where we’re going to have 3mn people.”
Indeed, Woods visited some of his clients on the opening day of their recreational marijuana dispensaries and saw wait times of up to five hours, as well as lines of people hailing from states as far-flung as Alaska and Texas.
For Woods, the windfall began when he and his wife Mary founded Parker, Colo.-based Greenpoint Insurance. Greenpoint employs two producers and represents roughly 10 A-rated carriers specializing in E&S lines. The carriers are all marijuana-approved, and though they’re not “household names” like Travelers or Farmers, Woods said they fulfill “a very important part of niche business.”
Woods’s agency offers a variety of coverage options for clients, including standard lines like general liability and workers compensation, as well as more unique policies like sewer backup and non-owned/hired auto necessitated by the trade.
The expansion to recreational marijuana doesn’t change which policies Greenpoint recommends, Woods said, but it does mean some policies, such as directors and officers liability, will become more important as the industry grows.
Woods anticipates the most common marijuana-related claim—theft—will remain the same, but stressed that claims are relatively infrequent in the industry.
“It’s a very profitable industry,” he said. “I feel comfortable, I feel confident in this business.”
That confidence is not shaken by the conflict between federal and state law on marijuana legality, either. While Woods said he was initially concerned about “layering insurance on an industry that is quasi-legal,” state regulation and a Department of Justice statement leaving marijuana regulation up to states has put him at ease.
“I haven’t worried about it in literally a couple of years,” he said. “I think it’s great, I love it.”
That level of profit and comfort will continue to pay off for Woods, and Greenpoint fields more coverage requests from locations in Washington state, Connecticut and other areas of the country.
Despite the niche nature of his business, Woods said there is something in his story that all insurance producers can learn from: the importance of specialization and education.
“I think in today’s age, the insurance broker of yesterday is gone,” he said. “They’re used to taking orders and fulfilling requests at a very subpar way of operating. I believe today it’s more important for insurance brokers to rise, educate themselves, focus on niches and become really great at what you do.”
“You’ll have an endless supply of clients,” Woods promised. “That’s the situation we’re in.”
You may also enjoy: "Medical marijuana reaches societal 'tipping point' with WC consequences"
"Opinion: When substance abuse impacts the workplace"
"'Self-interested' physicians drive up WC costs with compound drugs"