How to create a risk-management dream team – Marijuana Venture

To achieve success, your corporation will want the three A’s: lawyer, accountant and agent

Risk administration is just the method of anticipating losses and creating a plan to survive them. It is a vital a part of any profitable hashish enterprise, and an essential a part of that course of is assembling your danger administration advisory team. I name them your “dream team” as a result of they may help you make your enterprise goals come true — they usually may help you keep away from enterprise nightmares.

The dream team consists of the three A’s: lawyer, accountant and agent. If you wouldn’t have these individuals in your team, you aren’t operating what you are promoting appropriately from a risk-management perspective.

Your lawyer helps you with a number of issues, from contracts to authorized compliance to hiring and firing. They will help you determine dangers of lawsuits, reduce these dangers and deal with the losses that do happen.

Your accountant can advise you on the standing of your cashflow and income and may guarantee that you’re in compliance with the very difficult IRS guidelines and laws. Do NOT attempt to do your tax returns your self. You additionally want an goal third get together reconciling your accounting data. This minimizes embezzlement danger and ensures that a skilled job is completed. And once more, it will possibly assist with the identification and administration of dangers.

Finally, your agent — your insurance coverage agent — can give you insurance coverage protection to pay for the unlucky losses that do happen. They also needs to have the ability to provide help to together with your whole risk-management plan. That agent ought to be prepared, prepared and in a position to show you how to determine dangers of loss.

So you don’t have these individuals in your team but? That’s okay. I’m going to offer you some sensible recommendation on selecting your dream team members.


Choosing An Attorney

Your lawyer is a key participant within the success of what you are promoting. Open communication is extraordinarily necessary, says lawyer Melissa Roeder, of counsel with Foley & Mansfield in Seattle.

“In selecting a lawyer, you are looking for a partnership. Having someone listen to your goals, understand your business needs, and who will make you a priority are all key to finding the right partner,” Roeder says. “The attorney you select should be more concerned about your bottom line than their own.”

Before selecting your lawyer, it is best to have a session to ensure you are snug. Most attorneys will supply a complimentary meet-and-greet session so you will get to know them.

“Red flags should be waving within the first 10 minutes of an initial meeting if you know more about the attorney than the attorney has taken time to learn about you,” Roeder says.

In different phrases, a good lawyer may have taken the time to study what you are promoting, at the very least as a lot as is publicly out there, earlier than they even meet you.

“Trust and rapport are essential,” Roeder says.

Remember, that is the one relationship you’ll have that’s really confidential. The regulation ensures lawyer-shopper confidentiality, so it’s essential to really feel like you’ll be able to inform your lawyer something — even the embarrassing stuff.

And final however definitely not least, additionally it is essential to discover an lawyer who truly works in and understands the hashish area.

“You would not see a foot doctor for a heart problem,” Roeder says. So, don’t select a basic follow lawyer who has no expertise working with hashish companies.
Be conscious that attorneys cost by the hour. Even a fast telephone name or answering an e mail is a billable service. So know what the hourly charges are and be sure to don’t drag out telephone conversations and e-mail dialogues. At the identical time, be prepared to spend the cash to get the authorized recommendation you want. Your lawyer is important to protecting your small business operating easily and avoiding authorized hassle.

According to Roeder, the underside line is fairly easy: “A competent and caring attorney who you are comfortable and compatible with will save you money and eliminate problems in the long run.”


Choosing An Accountant

You completely want a licensed public accountant (CPA). There are, to start with, hundreds of guidelines within the Infernal — er — Internal Revenue Code. Some guidelines pertain particularly to hashish companies, and somebody at a retail tax preparation service in all probability gained’t know these. An novice bookkeeper definitely gained’t know them, both.

A CPA has to know these guidelines and know them nicely, and naturally, additionally know methods to reduce your tax legal responsibility. So, search for a CPA and don’t accept much less.

You also needs to select one who is understood to have experience within the hashish business. By advantage of working within the hashish area, I assure you’re already an audit goal. You need your tax returns to be impeccable and past query when it comes to thoroughness and accuracy. You even have to understand that there are tax legal guidelines that pertain particularly to hashish companies, most notably Section 280E, which retains you from deducting most of your hashish enterprise bills. Although this provision is infuriating, it have to be diligently adopted. Adherence to 280E makes it a lot much less doubtless the IRS will discover one thing fallacious together with your return. A superb CPA will assist reduce your tax legal responsibility and allow you to adjust to this provision of the regulation.

CPAs range in how they cost. I’ve used some earlier than that didn’t cost to reply questions over the telephone and by e mail. I’ve heard of others that cost by the hour for each communication. Be positive to get clarification out of your CPA about their billing practices firstly of the connection so that you perceive precisely what your monetary duty will probably be.


Choosing an Agent/Broker

Don’t even take into consideration choosing an insurance coverage agent off the web or utilizing the one who insures your private automobiles. Instead, it’s crucial that you simply discover one who focuses on insuring hashish companies.

The cause, in accordance to Doug Banfelder, senior producer with the Stratton Agency in Redwood City, California, is that “industry-specific knowledge is vital.”

From the legal guidelines governing state packages to flower manufacturing cycles to the varied extraction strategies and the ever-increasing array of completed merchandise, one has to know what the best exposures are so as to appropriately handle the shopper’s danger, Banfelder says.

“There are important differences among the policies being provided in the marijuana industry,” Banfelder says. “Some provide solid coverage, while others contain troubling exclusions.”

As a outcome, it is necessary to discover somebody who actually understands the hashish insurance coverage protection market.

Most brokers may even evaluate leases, a important, complimentary service. Most leases have insurance coverage necessities in them. It is necessary to be sure to meet these necessities so have your agent or dealer assessment all lease agreements.

Additionally, it’s a good concept to discover an agent who takes persevering with skilled schooling critically.  This can be denoted by letters after the agent’s identify. For occasion, you may run throughout brokers with the letters CPCU or AAI after their identify. This signifies that they’ve accomplished the Chartered Property Casualty Underwriter (CPCU) designation and/or the Accredited Advisor in Insurance (AAI) designation. There are dozens of those designations obtainable, and a few are extra prestigious than others. The “big ones” for insurance coverage brokers embrace CPCU, AAI and CIC, which stands for Certified Insurance Counselor.

One last observe about your insurance coverage agent is that they often don’t cost by the hour. Their compensation is generally based mostly on the insurance coverage you buy within the type of a fee. Unless you have got them performing additional providers, during which case they are going to be upfront with you about further costs outdoors of the insurance coverage premiums paid, choosing up the telephone and calling them or capturing over an e-mail is usually a no-value service.



I hope that after studying this you understand the significance of assembling your risk-management dream team. Make positive you get the easiest team members you’ll be able to afford, after which make sure to make the most of their experience.


Brenda Wells, Ph.D. is the Robert F. Bird Distinguished Professor of Risk and Insurance at East Carolina University and the proprietor of Risk Education Strategies. She has revealed quite a few articles on the danger administration implications of hashish legalization and is a sought-after skilled within the danger administration and insurance coverage subject. She has acquired the Chartered Property Casualty Underwriter (CPCU) and Accredited Advisor in Insurance (AAI) designations. She may be contacted at


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