Breaking Ground: Introducing Starwind Cannabis

Episode Transcript
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Amanda Knight (00:23):
Welcome back to the Placing you First podcast,
the CRC Group podcast that putsthe spotlight on hot topics in
specialty insurance.
I'm Amanda, joined by myco-host, Scott Gordon, and today
we're talking about one of thefastest growing and most complex
areas in our industry insuringthe cannabis industry.

Scott Gordon (00:42):
Today we're joined by two leaders helping to shape
the future of this space TonyMcIntosh, president of the newly
launched Starwind CannabisProgram, and Eric Morrison, evp
of Starwind Cannabis.
This is the Placing you Firstpodcast from CRC Group.
This podcast features news andinsights from a vast knowledge

(01:03):
base of over 5,100 associates.

Who write more than $35 billion in premium
annually.
Plus, we give you the latestinformation on what's happening
at CRC this this.

Tony McIntosh (01:13):
This is the Placing you First podcast and
now the hosts of the podcastAmanda Knight and Scott Gordon.

Now, whether you're already placing cannabis
risk or just starting to explorethe opportunity.
This episode is going to bepacked with insights for you.
But before we jump in, amanda,I think we should let everyone
warm up with some cannabistrivia, since they're new to the
podcast, with a littlesomething that we did last time
called the pot quiz.

(01:41):
Oh boy.

It says learning can't be fun.

We're not grading.
We're not grading anyone.
Okay, so to lead off.
And this is a mixture of popculture and scientific prowess,
so you should have a good chanceat scoring a couple of points.
Oh, there are no points.
Never mind, I'm glad we have.
Eric I know this is just forfun, so this is one of the

(02:06):
questions I came up with myself.
This Ben and Jerry's ice creamflavor shares the same name as a
1998 stoner comedy starringDave Chappelle.

I don't know the answer to this one, so I fail, I
guess.

The answer is there's no takers.
It's half-baked.
They have a flavor nameHalf-baked, they have a flavor
name Half-baked Jeez.
That's just extremely obviousit's half cookie dough and half
brownie dough.
Considering I'm a vanilla icecream guy oh, it's one of their
better ones.
Okay, and then our nextquestion.

Well, we're doing good, so zero for one we're all
at zero.

We all feel Okay.
This is interesting.
Which iconic cannabis strain,celebrated for its vibrant
effects and golden appearance,is often dubbed the queen of
cannabis?
I did not know this, Amanda.

I definitely don't know this Blue Dream.
It is Acapulco Gold.
Is acapulco gold, acapulco gold.

That's like a og strain, like a oh like way back
from what I hear, right rightfrom what they came from, the
kids tell us we're over two.

We're doing good okay, this one.

Uh, is this one might be a little difficult.
Smoke on the Water is the nameof the fictional medical
marijuana shop in which popularvideo game.

Oh boy.
Now is this a Nintendo game.
You take the cartridge out andblow on it and put it back in,
Because I don't remember that.

No, it's not a Nintendo game.
I don't think they let potreferences go through, but this
is Grand Theft Auto.
Grand Theft Auto smoke on thewater.

Boy.
At least I got some verbiage togo back and talk to my kids
about, you know.

Yeah, here's some good ones.
Which US state was the first tolegalize recreational marijuana
?
Colorado, it is Colorado.
They passed Amendment 64 in2012 alongside Washington State.
Colorado, it is Colorado.
They passed Amendment 64 in2012 alongside Washington State.
Right?
Hey, we're doing better here.
We go A little better on theboard.

I want to put in a disclaimer here that they are
getting the questions right thatactually matter.

I know the final question.
The cannabis plant has twoprimary species that are wildly
cultivated, that are widelycultivated, I'm sorry, what are
they called?

Two species that are widely cultivated.

Eric Morrison (04:34):
Indica and sativa .

Yes, that is correct.
The cannabis plant has twoprimary species.

See, you guys got the hard ones right.

I would say that if this was a college class,
you'd probably pass.

Hey, we're getting there.
We're warming up.

Well, what do they say?
Seas, get degrees, right,that's right, maybe.

Well, okay, now that we've warmed you guys up,
let's dive into the big picture.
What makes the cannabisindustry marketplace different
from other lines that agents maybe used to?
I'll jump in here.
The cannabis insurance market'sa unique animal, so, unlike
traditional industries, likeother lines that agents may be
used to.

I'll jump in here .
You know the cannabis insurancemarket's a unique animal.
So, unlike traditionalindustries like retail or real
estate, cannabis operates in aframework of state regulations
with the constant legalityoverhang, and so this means
carriers and agents need to behyper-specialized to navigate
risks, fincen requirements,compliance and the stigma that

(05:28):
kind of still lingers.
And so I'd say that the riskprofile is also distinct.
You can think high-value crops,cash-heavy operations,
ownership structures and supplychain complexity from seed to
sale.
So standard BOP-type policiesjust don't cut it.
So standard BOP-type policiesjust don't cut it.
And that's why we have tailoredcoverage to fit the industry's

(05:52):
specific needs, like full marketvalue on crop or cargo cover,
while product or cash is movingaround, and product liability as
examples.
And so I really love howdifferent it is in that it's
fast-paced, so it's evolving.
It's an industry that requiresbrokers to stay ahead of the
curve, and those brokers thatpresent high quality data and

(06:12):
narratives on operations andwhat the insured truly needs are
the ones that certainly win alot easier, at least with us.

Yeah, yeah, I mean, you nailed it, tony.
I mean, I think one of theunique things that I've found in
this industry is it's extremelyfast paced.
So if you like the same thingevery day, you're in the wrong
business.
It's something different everyday.
It's constantly evolving.

(06:42):
Evolving.
It's exciting because you'renot looking at the same things
over and over again.
So it is unique in that regardwhere a cannabis operation just
isn't a cannabis operation.

(07:03):
They're all different, eventhough they may be doing the
same things.
So it's pretty cool to beinvolved in something from the
ground up, like we have been.

Well, with that in mind, what are maybe the top
three things if you could boilit down to three that you would
want any retail agent toabsolutely understand, about
placing cannabis risks intoday's market?

I would say knowing your customer, knowing
the exposures, knowing the risk,knowing what type of operations
they're doing, because theseguys typically will start out
doing one thing and then evolveand grow and no pun intended,
but Um, they um have relatedentities that that will um pop

(07:49):
up that you may not be aware ofUm.
So I I think a lot of it is umjust knowing your customer and
knowing what type of riskmanagement practices they they
have in place Um.
And then the second thing Ithink would be that knowing the
forms that are out there interms of insurance, the

(08:12):
ISO-based forms versusproprietary manuscript
endorsements that are out there,because ISO didn't really have
a product for this industry, notyet they're coming out with
some forms and some rates andcompiling data and whatnot.
But um, knowing the differencebetween ISO based and

(08:34):
proprietary forms, um and thenreally getting into the details
and understanding those forms Um, because within those forms
that kind of leads me to thethird thing are the warranties,
terms, conditions, exclusions,those sort of things are key to
understand and be able to speakintelligently about what is

(08:58):
required of the operator inorder to trigger coverage or
make sure the policy responds inthe way that it's intended to.
So I think those three thingsare probably the most important,
at least from an underwritingperspective.
And then just getting out thereand being able to speak to

(09:20):
these guys, because you know,everybody likes to talk about
what they do for a living andthese guys are no different.
So understand them, understandwhat they're doing and, yeah,
I'd say that's top three.
Tony, I missed anything.

No, I don't think so.
I think to return the younailed it line, you nailed it,
buddy.
But I'll frame it slightlydifferently.
I'd say one prioritize riskmanagement, so clients need to
show strong security andcompliance to get competitive
rates.
Two, don't assume that thosestandard policies work, and so

(09:58):
cannabis needs bespoke solutions, you know, kind of like our in
the marine for transport, eric,or how we can help employers
with work comp and EPLI asexamples.
And then three to your point isstaying educated, and so, as
the market's changing fast,there's new risks like cyber,
threats to POS systems andmanufacturing infrastructure.

(10:18):
So brokers who really nichethemselves and keep learning
about exposures and risktransfer vehicles, in my opinion
, will stand out and build a lotof trust with clients and
quickly Right.

And you mentioned, you know this is a really
quickly evolving field.
So what sort of misconceptionsdo you think agents or clients
have about cannabis coverage?

I think one big misconception is that cannabis
insurance is and I'll keephitting on the head is just like
any other business insurance.
It's not.
So some clients may think thata standard BOP will cover their
grow operation or dispensary, asan example, but those policies
rarely account for cannabisspecific risks, like goods and
process or product liability andwithdrawal expense.

(11:01):
So, um, you know that, uh,certainly is one misnomer.
I think another misconceptionis that coverage is unaffordable
.
Yes, premiums can be higher dueto the risk profile, but with
proper risk management, alongwith, again, a detailed
application or narrative thatclearly defines what those
operations are, can really go along way.

(11:23):
And having a specialized brokeror advisor that knows coverage
like property and casualty, work, comp, management, liability,
like DNO, epl, fiduciary andcyber, I think those premiums
and really budgeting year overyear become very manageable.
And lastly, I'd say that someagents assume that this market's

(11:44):
too risky to enter, but withthe right expertise or
specialization, it's a hugeopportunity to build a niche
practice.

I think another misconception of something that
goes on out there is that everyprogram's the same.
They're all the same, they allhave the same forms, they all
have the same rates.
It's not a one-size-fits-all.
Everybody's got their formsthat are, you know, in the early
beginning phases of thisindustry, which I started back

(12:15):
in 2017.
There were very few programsout there and a lot of it was
cookie cutter much of the samething over and over again in
terms of forms, rates, all thatstuff.
But it's matured a lot, it'scome a long way, and I think a

(12:37):
huge misconception is that allthe programs are alike and
that's just simply not the case.
I mean, our program is verydifferent than any others out
there, which is why we kind ofcame to Starwind to start this
whole thing.

It's a good segue , Scott.

Yeah, you guys are clearly well-versed specialists
, which explains why you're overat Starwind Cannabis running
things.
What inspired the launchspecifically of Starwind
Cannabis and why now?

Yeah, I'll continue on that path.
I think it's still a veryunderserved market.
As many programs and carriersand partners that are out there
willing to offer coverage.
There's still some friction andbrain damage going on out there
.
For these retailers it'sdifficult to get this stuff kind

(13:30):
of pushed through sometimes,and we kind of came about to
offer a helping hand, in that wewant to make sure we are
treating our customers as we'dwant to be treated.
So I think that's the mainreason that we kind of came
around is to offer somestability.

(13:52):
And, uh, in an underservedmarket because it tends to be
all over the place from carrierto carrier or mgu to mgu,
they're like I said, they're allvery different and, um, not to
quote forrest gump, but it'slike a box of chocolates you
don't really ever see whatyou're going to get from program

(14:13):
to program and, truthfully,from submission to submission.
So I think there's a hugeopportunity for us here, which
is why we kind of came about.

Yeah, I think I'll book in that too, with a
couple other points, in that,you know, the cannabis
industry's growth is undeniable,right?
I mean sales hit $24 billion in2021 and are projected to reach
$70 billion in just a few years.
So, to Eric's point, theinsurance marketplace hasn't
kept pace with that, and sothey're leaving gaps for
businesses that are needingreliable coverage, and we're

(14:47):
hoping to kind of serve up whatour knowledge is of this
business and the appropriatecoverages that will kind of
shelter these operations as theyare, you know, from a new
venture status through theirgrowth stages of their lives as
a company, and I think Starwindsaw a chance primarily to bring

(15:08):
you know two extremely goodlooking amazing cannabis leaders
into the fold.
Of course, Both of whichcouldn't be here today, by the
way, Just kidding.
But in all seriousness, I thinkStarwind saw a chance to lead
with a program to Eric's pointthat's innovative, that's
broker-focused and built for thelong haul.
And why, now, you ask?

(15:28):
I think the timing's perfect.
Legalization is expanding,stigma's fading and brokers are
hungry for specialized solutions, with the marketplace friction
that they're up against, whichEric was hitting on in his
points.
And so we launched in Q1 of2025 to bring stability to the

(15:49):
marketplace and then to meetthat demand head on.

So if we wanted to be a little more specific or
detailed about it, whatspecifically do you feel like is
most appealing?
Or set Starwind Cannabis apart,that kind of grabs agents'
attention or should grab theirattention.

Well, I'll lead on that one too.
Well, I'll lead on that one too.
Ease of doing business that issomething we take very seriously
.
It is not our job to say no.

(16:29):
It's our job to find a way tomake to work for our partners on
the carrier side.
It's got to work for the broker, it's got to work for the
client.
Um, and I think a lot of timesthere's some resistance and that
, well, it doesn't fit this box.
Well, if you're in for the box,fitting underwriting guidelines
or underwriting, this is notyour industry, because it's it's

(16:50):
one big gray area and you know.
So we are here to findsolutions, make it work and make
, truthfully make the brokerpart of the process because,
like Tony he knows I say thisall the time it's like I don't

(17:11):
want to know what we're doingright, I want to know what we're
doing wrong, because that'swhere we can improve things for
them, and so we want them to bea part of that process and
included, because that's whatwe're ultimately here to do is
to help them.
So, Tony, you can feel free toadd.
Or if I missed something, no, Ithink you're hitting that again

(17:35):
right on the head.

Let's keep that theme going.
We're basically focused oneliminating marketplace friction
and providing stability outthere.
As you've been hearing thisover and over again in our
points We've tackled some ofthose pain points like crop
table valuations and blanketlimits on products, things like
offering market value cropcoverage or no MLIs on BI and

(17:58):
having flexible policy structureacross multiple operations.
But what we're really committedto is our service standard.
To Eric's point, there's just alot of friction and there's a
lot of trenching out there whereit becomes very difficult for
agents just to kind of pop upand shoot with their hard hats
on, as opposed to running totrench to trench, to trench to

(18:18):
trench to kind of do that.
So our team is really bringingdecades of niche experience to
the table here.
We're not just selling policies, we're building partnerships.
So our select distributionpartners get direct access to us
, get responsive service andthey get a program that we feel
is designed to really serve well.

Can you walk us through the types of coverage
offered and what kind of risksthis program is built to handle?

You know, starwind Cannabis really covers
the full supply chain, scott, socultivators, manufacturers,
distributors, dispensaries andeven LROs.
So our core coverages includeproperty GL.
That's a separate and distinctform from our product liability
form.
We have wonderful capabilitiesin cargo per conveyance.

(19:07):
We can help with workers compand have specialized options
like management liabilities sothink DNO, EPL and fiduciary, as
mentioned before and we've gotcyber liability solutions too to
cover this growing risk foroperators too, to cover this
growing risk for operators.

With that in mind , I mean you guys have a lot on
the go.
This is a growing area ofinterest, a growing area of
business.
What are you guys most excitedabout as Darwin Cannabis gains
traction?

I would say, forming the long-term
partnerships with the people inthis industry.
I think that is um is what I'mmost excited about, cause, you
know, while we're um, you know,in the insurance industry, what
we ultimately are out thereselling is is trust, and you

(19:54):
know we want to do business withpeople that we know like and
trust and um it's, you know,while it's the business that
kind of brings us all together,it's the relationships that
endure it.
So ultimately we're in therelationship business and those
relationships are meaningful tous and we appreciate um all of

(20:16):
them.
That's what gets me going ishelping people and helping our
brokers find solutions for theirclients, just like I mean,
that's what we're here to do.

I'd say for me it's about impact, so we aim to
change how brokers and clientssee this marketplace, so we're
really excited to see ourprogram empower brokers to win
more business and to help thesecannabis operators thrive in
what we've described as a prettychallenging and tough insurance
environment.
Plus, with our team's drive,we're just getting started, so

(20:51):
the chance to serve the spaceand innovate with technology
tools or new coverage areas isincredibly rewarding to us.

We look forward to watching you guys grow.

Is there anything else you guys want to touch on
before we get to the fun stuff?

No more quizzes right.

No more challenging quizzes about video
games.
I'm sorry.

I'm sorry they won't be that challenging, but
we want to get to know you guys.
I mean you know, we know thatyou guys are very well versed in
what you do.

Yeah, we've been entrenched in this business for
a long time, Scott.
Both Eric and I arethird-generation insurance nerds
, so we were born in thisbusiness.
We didn't get the opportunityto do anything other than
insurance.
It's like the family's legacy,just gently mocked all of our
early ambitions to do anythingother than insurance.
Just kind of gently laughed inthe corner like don't worry,

(21:43):
they'll be back.
And sure enough we've been inthis beautiful business for
forever.

Well, and we appreciate you guys giving us
the goods, so to speak.
But now we want to get to knowyou a little bit with something
that Amanda and I like to callrapid fire, which you just
answer off the top of your head.
No right, no wrong.
We just want to get to know you.
The first question in RapidFire what food do you absolutely

(22:08):
refuse to eat?

I'll say green beans.
You know, I used to hide themin my milk as a kid and I
actually thought my parentsnever knew.
You know, like now that I havekids, I understand how much they
were probably laughing theirbutts off when they did the
dishes 100%.

But, points for creativity I wouldn't have
thought of that?

Yeah, I thought so too.

I would have to go with tapioca pudding.
It's a texture thing.

I can see that Can't do it.
I will eat both of those thingsjust for see that Can't do it.
I will eat both of those thingsjust for the record, doesn't
bother me.

Just for the record, I won't eat either one.
Just for the record.
Okay, so it's summertime, thekids are out of school.
What is your favorite summertravel destination, with or
without kids?

For me it's the mountains, I think you know, the
fresh air, the lakes, therivers, the hikes, the little
cell signal, you know, do youright?
Yeah?

I'd have to go the opposite, because Tony gets
the beach and he gets the sun 24seven, being in San Clemente.
So you know, I conversely livein Kansas city where there is no
beach, no mountains.
I conversely live in KansasCity where there is no beach, no
mountains, no nothing.
So I will take either one ofthose beach mountain anywhere

(23:31):
other than where it's hot, humidand flat.

That's where I'm at Rib joints, yeah.

I lived in Kansas City for three years.
I feel your pain.
I remember those days.
Yeah, alabama, you can relate,it's flat and windy.

Yeah Boy, those flat can relate.
It's flat and windy.
Yeah boy, those flat states.
Though it's a long drivethrough your state, Eric, I'll
just tell you that that's right.
Okay, our third and finalquestion what is your go-to
pump-up song before a bigmeeting or an epic workout, or
something?

Eye of the Tiger.
It never fails to get me goingand it's about rising up to the
moment.
You know it's on the quickplaylist.

There you go.

I'll go with James Brown.
Get up off of that thing.
Yeah, that one always.
You can't have a bad day if youlisten to that.

Perfect, both classic choices.
Well, thank you both so much,tony and Eric, for joining us.

Thank you, really appreciate the time.

Thank you so much for breaking down the cannabis
market in a clear, practical waythat we can all appreciate.
If you would like to learn moreabout the Starwind Cannabis
Program, you can check out thelink in the show notes Scott
will be sure to put it there orvisit starwindcannabiscom to
learn more.
Don't forget to follow Placingyou First on your favorite

(24:47):
podcast platform so that younever miss an episode.
We'll see you next time.

Thank you all.

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