Wildfires that plague California’s wineries are also a constant danger to the state’s legal cannabis industry. Protecting your staff, operations and crop from the destructive flames is a matter of critical importance. How can businesses best safeguard against this threat?
For a look into this issue, we recently spoke with Charles Pyfrom, CMO of CannGen Insurance Services, a managing general underwriter focused exclusively on the legal cannabis industry. CannGen offers insurance lines protecting cultivation, transportation and more.
Pyfrom also discussed emerging cannabis trends, and gave his prediction for federal legalization.
Cannabis Regulator: How big of a threat are California wildfires to cannabis businesses?
Charles Pyfrom: We’ve always had a wildfire culture in California. The level of threat to cannabis cultivators is based on their locations. The problem is that where many of them operate, they may not be a fire department or source of water nearby. That makes it challenging protecting your crop and inventory.
There’s been a lot of California wildfires the last five to ten years. While a significant portion of cannabis cultivators have not been touched yet, the Santa Rosa fires did wipe out a lot of cultivators there in the last few years. It’s the nature of the beast, the risk of running a California cannabis business.
CR: How can businesses mitigate that risk?
CP: Brush clearance is a big help. You don’t want to keep dry brush around your property. It’s pretty easy for something to give up a spark and ignite the brush. We recommend that businesses keep 500 feet of brush clearance around their properties.
I’ve seen some cannabis cultivators hire traveling goat farmers. The farmers show up with 150 to 200 goats, which will roam the property eating, clear out the property of brush and then move on to the next farm.
A lot of people suggest a central security station and burglar alarms. That’s standard practice. It’s also good to have onsite water pumps and access to wells nearby. An onsite water source is critical.
CR: How much damage do these fires do to the national and state crops?
CP: Nationally, ideally nothing, because whatever’s grown in California should never leave California.
As for the state’s crop, we have lots of cannabis operations here. Will the wildfires do significant damage and send the state’s wholesale prices through the roof? Probably not. But as for the local markets, the fires 100% can do significant damage. A lot of cannabis cultivators are concentrated in a local radius.
CR: What’s your take on the chances for federal legalization of cannabis?
CP: It depends on who’s in power and what’s being considered. The SAFE Banking act seems like it has a good chance of getting passed. But overall, your guess is as good as mine.
Ultimately, though, it will happen. We have almost 40 states now where some form of cannabis is legal. More and more, folks are saying that this is a legitimate business. That matters.
It matters, however, in getting the right people in power to realize all this, whether they’re unsure about cannabis or being political. That said, I’d say that we’ll see federal legalization in two to four years.
CR: What interesting new trends do you currently see in the cannabis industry?
CP: The newest thing that’s popping up are onsite consumption lounges. These allow for safe consumption like cigar lounges or bars. You buy the product there and enjoy it there.
These come in many forms. They could be businesses like a bed and breakfast with a cannabis theme. Or a hotel with three floors specified for cannabis consumption. Customers may include corporate clients looking to do something a little different and unique. Building out the social acceptance of cannabis is already happening in many ways.
This interview was edited and condensed for publication.