🎙️ Eric Schneider, Managing Director, AlphaRoot
Alpharoot takes a community-first approach to Cannabis insurance which has help them stand out in a crowded space.
Background. Re-launched as its own standalone company in 2020, AlphaRoot started early on in the growth of its now sister company, Founder Shield. Around the same time Founder Shield began to really gain a foothold in emerging industries, the legal cannabis industry began to take off. Given the Founder Shield team’s expertise in working in emerging markets that most traditional insurance companies could not understand, they launched the AlphaRoot brand as a way to market to these new legally operating companies.
While the cannabis book of business did grow moderately over the next few years, there was a need for a team dedicated solely to the space to really understand not only the insurance needs of these companies but what the cannabis industry as a whole was experiencing. At this juncture, the management team of Isaac Bock and Eric Schneider put together a strategy of how to make AlphaRoot its own standalone entity.
The plan was to leverage Isaac’s knowledge of the cannabis industry in general as well as his experience of handling 90% of the Founder Shield cannabis book of business with Eric’s network of business development partners he had made in the industry to create a unique insurance buying experience for their clients. The way to achieve this was to become members of the cannabis community first and foremost and use this expertise to help create insurance programs that actually meet clients’ needs. The team view themselves not as an insurance brokerage who happens to do cannabis, but as an operator who just happens to be in insurance.
Conversation Summary:
Focusing exclusively on providing insurance services for businesses in the cannabis, hemp, CBD, and holistic wellness industry. Highlighting the challenges and nuances of insuring these businesses, including the different insurance needs based on the type of operation and the customized approach they take to build insurance programs for each client
The importance of property insurance and theft coverage for retail businesses, emphasizing the need to adhere to safeguards to ensure coverage
The availability of product recall and product withdrawal expense coverage for companies facing recalls due to issues like the use of synthetic hemp
Various aspects of insurance policies in the cannabis industry. Including factors that affect product withdrawal claims and the challenges of obtaining crop coverage for outdoor grows
How word of mouth, brand awareness, and community involvement contributes to the visibility of companies like alpharoot in the insurance ecosystem
Best events for alpharoot’s networking and branding purposes
The importance of carrier relationships
The importance of vetting brokers before starting the quoting process to avoid confusion and frustration
How providing education, transparency, and additional services beyond insurance in the cannabis industry has helped the company stand out
Transcript (lightly edited):
@0:00 - Eric Schneider (AlphaRoot)
Just a quick background on how even though we're a full service commercial insurance brokerage that focuses exclusively in the cannabis hemp, CBD, and holistic wellness space. We've been working in the cannabis space since 2012 when Colorado went rec. As we started to get more traction and more clients on the books in the cannabis space, we started to see the maturation of the industry and wanted to do our own thing. From the licensing, the legalization, as well as how these organizations are structured a lot of times, makes it very challenging, as well as the insurance companies that will write this class of business.
So, for all of those reasons, we really felt it was important to focus exclusively in this space, to start to build relationships, not only with the cannabis community and operators at large, but also with our carrier partner.
And that will be the ultimate ones with the risk on their balance sheet, right? So, we act as a conduit in representing the operators and salary businesses, really, whoever touches the cannabis space, the CBD space, and representing them to our carrier partners, right?
And the better we know about the industry and our client's businesses, the better we're able to articulate the risk to our carrier partners.
And so then we... We built out the AlphaRoot brand in 2016, and at that time it was really like toggling between emails of Founder Shield and AlphaRoot to cannabis, until the opportunity came through.
It was, oh, we're AlphaRoot, right? It was really just a brand. And like I said, we really took a step back and said, if we're going to have any traction and really be able to help these businesses, we have to exclusively focus on it.
And so that's what, you know, myself and Isaac Bach. We are co-founders of the organization, and we've been working with cannabis businesses exclusively since about 2019.
And then fast forward to 2021, we were actually acquired by Baldwin Risk Partners, which is a NASDAQ listed, publicly traded brokerage.
And at that time we were thinking like, hey, we want to raise capital to fuel the organization and fuel growth?
would hire more. And we looked at that pretty thoroughly and the acquisition was just a better opportunity for us because it provided a lot more infrastructure and additional resources that we didn't have previously.
So like, things like health and benefits, having access to an international team, having access to the BRP portfolio as well.
And so it's been a great natural fit. We're kind of the cannabis experts within the organization. And we're super excited for that partnership moving forward.
And, you know, from a product standpoint, and what we focus on, it's your classic insurance products, right? like, general liability, product liability, property insurance, workers compensation, right?
But whenever you throw a cannabis spin on it, it just limits the scope of markets and really invokes expertise into the cannabis industry.
And that's what we're doing on a daily basis right now.
@4:08 - Dai Truong (Arlington Capital Advisors)
How big was AlphaRoot as a part of Founder Shield?
@4:14 - Eric Schneider (AlphaRoot)
So as a part of Founder Shield, we were about 10% of the overall book of business. And it's grown substantially since probably looking at more, you know,% of the entire emerging risk.
@4:32 - Dai Truong (Arlington Capital Advisors)
What are some of the popular product offerings that cannabis companies come to you guys for?
@4:40 - Eric Schneider (AlphaRoot)
Yeah, I think it's, you know, what are your cultivation, manufacturer, delivery, lot of the products are the same, right?
But the application and the... Just exposure is very different, right? for things like premises, general liability for slip and fall...
That's going to be a little bit more nuanced for a retailer, right? That's having a lot of heavy foot traffic versus a retailer is not going to have a ton of product liability exposure, but they are the end vehicle that's distributing products, right?
But most of the product liability and where it becomes a little bit more challenging is on the manufacturer cultivation side.
So I would say most of our clients, regardless of where they're at in the distribution channel, are purchasing similar products, but the application is slightly different.
know, for delivery companies or distribution, a lot of times they're going to purchase commercial auto insurance if they own the vehicles or what's called higher non-owned auto.
If the company is either renting vehicles or the organization is using employee owned vehicles for business purposes. So really what we try to do today is not look at one business and really like, work them all together.
Together we feel that every single operator is unique in its own way from a location standpoint. Obviously, the state that they operate in, what the regulatory framework is, because certain states have a little bit of wonky insurance regulation.
So we really try to take a very calibrated approach for each business. And also a dispensary that's doing $35 million in one location is going to have different needs than maybe a dispensary that's doing $3 million.
And so for those reasons, we take a really customized approach and try to build an insurance program that fits for that specific operator.
@6:41 - Dai Truong (Arlington Capital Advisors)
And what about insurance for crime? A lot of these dispensaries, as you mentioned, up in certain locations, there can be break-ins and cash business.
We're talking about hundreds of thousands of dollars, potentially millions in cash and products. Is that popular and how is that getting insured and what kind of rates help us understand?
you know, if I'm a retailer, doing $10 million in revenue, like, much am I paying, you know, whoever you guys farm it out to for insurance and what does coverage look like?
@7:16 - Eric Schneider (AlphaRoot)
Yeah, absolutely. And just to start with your first point on the crime and break-ins and we definitely scheme a fair that at the retail level.
And there's two different components to that. So property-driven, which if you ensure the inventory, the cash, right, that's going to, and there is a break-in from, you know, a third party.
That's going to fall under property coverage. And it's important to make sure that when you are purchasing property insurance, that it does cover finished-stop cash and all of those values are scheduled accordingly.
Carriers will have certain limitations for the amount of cash that they will ensure. So if you have millions and millions of dollars, I'm not sure that that will be able to be fully insured, but definitely up to a certain level, typically like a sub limit of, you know, 100 to $250,000 in cash securities and inventory and stock.
There's, there's not like a, I would say a hard limit on that. And something that's really important as well is all of these policies.
Depending on the carrier that you place the business with, know, Ken, Jen, quad score, canisher, Golden Bear, right? All of these different carriers that will offer property insurance and then, you know, inherently offer theft coverage, they'll have what's called safeguards.
And why that's important is in order to have property coverage triggered, you have to adhere to those safeguards. It's things like certain safe specifications.
It's like, how are you showing Storing your property, right? All of those different things factor into it. And the reason I bring that up is like we had a client one time that made it abundantly clear that, you know, in order to get theft coverage, you have to be storing and taking the goods that are out on display, putting them into the safe at night.
Unfortunately, you know, they did not do so and had a claim and only a portion of that was able to be covered because all of the finished goods were left out, you know, on display and not put back into the safe, right?
And at the end of the day, really what it comes down to is education and transparency and making sure that when we are providing insurance, where we're telling our clients, hey, this is where coverage will be triggered.
This is where it won't. And it's just important to make sure that we are giving them the tools. The other type of crime is it's actually under commercial crime policy, which could be for first party theft.
So if you have an employee, a member of the organization that actually steals cash, property you know, wires themselves, a certain sum of money, that's going to be covered under commercial crime policy rather than a property policy.
So property is for third party theft, meaning somebody outside the organization, and crime is for first party theft, meaning somebody within the organization.
So it's just important to delineate those two coverages because they are different products and they do react differently depending on the claim.
Thank you. And then finally to your point about, you know, overall premium spend, right? It's the age-old. It depends because it's not only the revenue of the business, but how much stock do they have on hand?
You know, what's the square footage of the location? Where are they located? What's the crime score in the vicinity?
You know, someone that's maybe, you know, has a dispensary in Oakland versus in the middle of nowhere. You know, Courted.
10 million in revenue. You're probably looking at around, you know, 30 to 100 K in premium. It could fluctuate quite a bit.
You know, has that company raised capital, right? Do they need directors and officers and charities? Have over 10 employees.
Do they have to think about employment practices, liability insurance, which basically covers, you know, what we call HR insurance for things like wrongful termination, racial discrimination.
So it really depends on the scope of operations, not only just based on revenue, but I hope that's, you know, a relatively good sized ballpark.
And what's exciting is that more and more companies are coming into the space. There's a few carriers that have built out small business products, which are great for operators that are just getting off the ground so that they don't have to have that 30k expenditure in year one.
And then there's a lot of products for middle market enterprise level businesses, right. And it also comes out to how many locations do they have?
Do they have just one dispensary doing 10 million or do they have four different locations. And so those are all the things that we're constantly looking at and making sure that we're contemplating the full story.
Scope of the operator's exposure. So I hope that was helpful just to give you a broad sense of pricing, but there are a lot of different factors that kind of play into each person's specific needs.
@13:15 - Dai Truong (Arlington Capital Advisors)
You know, that's great and I appreciate you kind of mentioning the safeguards that some of the carriers have to make sure they don't pay out a policy if a customer is not adhering to that.
So another question I had for you that's been top of mind for me is, given what's going on with Missouri and there's Delta extraction that's been at the center of all these recalls because they've used synthetic hemp.
So in theory, some of their customers have insurance policies. How might they or might they not be covered through insurance?
@13:47 - Eric Schneider (AlphaRoot)
Yeah, that's a great question. So there is a policy called product recall, which is a very established product for a lot of like CPG companies.
You can get a standalone product recall policy, meaning that we cover voluntary and involuntary recalls. But what we try to do for a lot of our clients is you can get an added sub limit for product withdrawal expenses as long as it's a government mandated withdrawal.
So you can typically get that added on to a general liability product liability program for very inexpensive, like a few hundred dollars to have that sub limit added.
Or if a company is really robust and they want their own standalone product recall policy, we can definitely do that.
I would say product recall is more applicable for manufacturers than cultivators. But that product withdrawal expense could be a great way for companies to mitigate that exposure, not have to buy a full separate policy and can have that added as like what's called the sub limit.
It depends on the intent of the policy, but if they do have that product withdrawal expense and it is government mandated, we would definitely look to file a claim depending on what the size and scope was.
Because we always have the factor in, well, what's the deductible on the policy? What is the out-of-pocket expense for that operator?
doesn't make sense to file a claim. But yes, we would look to extract value from the policy in that instance.
@15:49 - Dai Truong (Arlington Capital Advisors)
Another one that's interesting to me is the crop insurance portion of it. So if you're insuring a cultivator and they have a bad harvest for whatever reason, pesticides.
Aspergillus, whatever, what's typically not covered and how much give me a range using that same example? If you're doing 10 million in wholesale flour value, how much does that policy cost?
@16:13 - Eric Schneider (AlphaRoot)
Yeah, great question. there's a lot of different factors. you can see, there's a common denominator of. It depends and there are a lot of different factors.
And the reasoning is outdoor grows specifically are pretty much, I wouldn't say impossible to get covered. There are certain things like a parametric where you can get coverage for things like frost or you can get coverage for specific events that would trigger the policy.
Traditional crop insurance, very seldom, is like a separate policy in and of itself. Typically, it's a scheduled limit on a property policy.
So there's different types of crops, right? and that's a lot. The way that we extract, like, what's the value of everything is we take the amount of plants in each stage.
So, you know, where it's at the nursery or mother plants, and like the further down, you know, and closer you are to harvest, the greater the value is of that one specific plant.
So typically what we'll collect is like, okay, how many plants do you have roughly in each stage? And then that's multiplied by an industry standard, like base rate.
And then that's how we would get the actual value of the total crop. But again, that's particularly for indoor grow and it can be for a greenhouse.
It just depends on the structure, right? houses are very challenging to get, you know, outdoor crop or to get crop coverage for but the operators with a little bit more indoor state of the art facility.
These typically don't have any issues for things like that you would say are more business risk, right? So pesticides, you know, Aspergillus aren't typically going to be covered under a crop policy or like poor harvest because it's really challenging for insurance companies to understand the efficacy of the cultivator itself, right?
And so we're able to get crop coverage for things like fire, water damage, and more traditional perils. Unfortunately, there's not really a product in existence that, you know, for bacteria, aspergillus, pesticides, those sort of things like a lot of times there are going to be exclusions on policy.
And I think it's just really important to take a look at the fine details and not just like, Oh, property coverage, we have a million dollar limit.
Okay, well, well, what is covered under that and what's not, right? I think a lot of it, like I said, again, goes back to education and transparency and making sure that our clients understand what is and what's not covered so that they can properly mitigate the other exposures with other forms of risk management.
@19:18 - Dai Truong (Arlington Capital Advisors)
Great. And then, you know, let's talk a bit more about the insurance ecosystem. So folks come to you. How do they even learn about AlphaRoot or other brokers that you compete with?
@19:30 - Eric Schneider (AlphaRoot)
So let's just talk about that and then, you know, about the competition after. Yeah, I think a lot of it has to do with brand awareness, expertise.
Our clients a lot of times are the biggest champions and we're very fortunate for that. And I think the cannabis community, you know, what I've seen in working with other industries is very much word of mouth.
You know, reaching out to trusted resources and saying like, hey, you know, who do you use for insurance? Right.
I think a lot of that. It has to do with it. It comes with our interaction with the cannabis community and our contributions outside of just placing insurance policies.
us, honestly, like we've been doing it for quite some time, think a lot of times that it's the easiest part for us.
It really is just getting the foot in the door, which is no different than any business or any industry, right?
But that's why we try to be very present at conferences. We host events at our office space. We just did one last in August with the Women's Card Committee.
We're doing another event with the Card Coalition in October. We've done a lot of events with Trailblazers and other associations within the cannabis space, which I think is our way of giving back to the community in a lot of different ways and providing a platform where people can network and make connections.
It's something that we really take pride in. And we've been doubling down a lot on our SEO and our search, right?
content creation, I think, is super important. We launched a podcast as well, just to highlight great operators and people in the space.
It's not as good as highly objective, but we're trying. I think all of those things factor into how people hear about us.
And we are very... ... ... ... ... ... ... ... ... and you can go on like a base and submit an application without actually ever talking to an account executive.
Obviously, when they create an application submit, we're able to reach out and still provide that human element and that advisor level service, which we feel is going
It's still very important. But that's a great resource and I'm not sure if you've ever taken a look at an insurance application in the cannabis space, but it's pretty daunting.
they request a lot of information. so we tried to take all of those archaic PDFs and transpose it onto a digital format.
And what's great is year over year that data is stored. So when they come to us for renewal, it's an update.
And maybe they want to add a certain level of coverage. But all of that information is stored year over year.
So I think those are those are a lot of different ways that we try to elevate alpha root, really be a part of the community and a part of the campus community.
I can't stress that enough. We obviously understand that, you know, we're an ancillary provider. We're not going to pretend like we're an operator.
But I do think that we really try to invest into the cannabis space outside of just providing insurance. Now.
I think that's really been attractive for a lot of our clients, similar to what you're doing today. This podcast and a lot of the work that you do outside of your normal day-to-day.
That's how you are able to attract a lot of business and trust. It's a similar format which we try to follow.
@23:24 - Dai Truong (Arlington Capital Advisors)
Would you say you guys are probably the biggest when it comes to Canvas Insurance Brokerage or how would you rank where you stack versus the competition?
@23:34 - Eric Schneider (AlphaRoot)
Yeah, I don't know if we're the biggest. I would say we have a really wide variety of clients from a numbers perspective, from a pure revenue and premium perspective.
I'm not sure, but we work with early stage operators that are maybe just getting off the ground. Or all the way to some of the larger multi-state operators that are public in Canada operating in the US and really everything happening.
I would say we're probably, you know, a top 10 brokerage in the space. But obviously, without data of other brokerages and what their revenues are, it's kind of difficult to say.
We were recently nominated for an MJ, which is in tandem through MJ Bizcon. And we were one of six brokerages elected nominated for insurance, cannabis business insurance of the year.
So I think that kind of speaks to where we fall as well. But I would say, you know, that's my best guess without seeing, you know, the actual revenue numbers.
@24:38 - Dai Truong (Arlington Capital Advisors)
Yeah, you guys are certainly recognizable. You guys are at all the events, you know, Benzinga, MJBizCon, Trailblazers.
So certainly from a branding standpoint and community standpoint, I totally agree. You guys have done a great job. So on that point, I'm going to put you on the spot and kind of ask you, you know, what have been some of the more meaningful events in the space?
You know, there's a lot of events. know budgets are going down. People have sort of prioritized where they spend their money, where they attend.
So for your purposes, what's been kind of the best ROI?
@25:08 - Eric Schneider (AlphaRoot)
You give me a couple of the conferences or events. Yeah, I think for all of us, it's really been two main events.
Ben Zinga and Trebleysers are definitely the biggest investments that we have from a conference perspective. I think Ben Zinga does an unbelievable job of attracting really high caliber people in the room.
The challenge has been a little bit with Benzinga. We'll see with Benzinga Chicago coming up, but it's a lot of the same faces in Miami and Chicago.
So maybe we'll just go to one of those moving forward, but I do think that there is tremendous value.
And the Ben Zinga team, too, is just great. Our point of contact there, Nate. He's always willing to work with us and try to strategize a package that makes sense for us financially and also makes sense for.
Ben Zinga, they do a really, really great job in working with sponsors where some of the other events we haven't felt as much commitment from their side and love for us and building truthfully like a long lasting partnership that's not, hey, just sponsor this event and transactional.
And I would say similar to the Trailblazer side. Tyler Wakstein, who's one of the co-founders of Trailblazers, is our Strategic Advisor. And we've had a tremendous relationship with Tyler, I think Trailblazer is a little different. It's more of a retreat, very intimate.
So I think it's great for really crafting. And I think it's like, it's like, like, it's like, I think like, think it's like, think like, think it's like, like, I think it's like, think like, think like, like, think I
We have a lot of events that we host, and a lot of events that we're going to do. And we are really lucky with a great space, and we try to share that with the community.
I think we're going to be doing more and more events as bigger events start to come to New York.
We did a happy hour event in tandem with MJ Unpacked, but maybe we're not going to sponsor MJ Unpacked.
We're always looking at and refining year over year what yielded really quality results for us, and also just changed our approach a little bit.
Because as we grow, it's about going to these events, going to MJ Biz, not actually going into the event, but having meetings outside of it, that there's a space where everybody's
He says, hey, I'm going to go here for this one weekend and being able to schedule those meetings is really powerful as well.
So I would say MJBiz is great because typically everybody is there. You could schedule really quality meetings. Also, lot of carriers on the insurance side will go to MJBiz because then that's like the big one that everybody knows about.
But Ben Zing and trailblazers have been great for us as well.
@28:27 - Dai Truong (Arlington Capital Advisors)
Yeah, so it sounds like no plans to be at MJ Unpacked in Detroit. There is Business of Cannabis New York coming up in November. What are your thoughts on those two?
@28:41 - Eric Schneider (AlphaRoot)
Yeah, I think MJ Unpacked Detroit, we may skip or maybe send one individual, I think, with the challenge with MJ Impact is if you're not sponsoring for $5,000–$10,000 and they don't want you to buy it.
Take it as an ancillary provider. But Business of Cannabis, like I'm local in New York, so I may like to go and pop in, right?
But I don't think we're going to invest substantially into those two events.
@29:12 - Dai Truong (Arlington Capital Advisors)
And let's talk a bit more about two questions I wanted to ask you that we didn't get to.
So talk a bit more about the carriers you work with. You guys are a brokerage. So where do you typically send your business? Maybe tell me about your kind of top three top five carriers. And then what is that business model? So they insure the customer and you guys have a take rate on top of that.
So what's typically the take rate or how does that work for you guys?
@29:40 - Eric Schneider (AlphaRoot)
Alpha root to generate revenue? Yeah, absolutely. Obviously the carriers and the carrier relationships that we have are, you know, are our secret sauce.
But, you know, some of the ones that are involved in the space have been, you know, for quite some time.
It's QuadScore, amongst others, we also have relationships with a lot of wholesalers.
The way that the insurance market works is like you have a retail broker, which is AlphaRoot. We work directly with a client that is looking to purchase insurance.
And then typically a lot, because there's so many retail brokers, like outside of Alfred, just across the country, compared to the amount of insurance companies, insurance companies don't always want direct appointments with all retailers.
We're lucky because we specialize in the cannabis space and we send a lot of submissions. Because we have those relationships on the carrier side, we can get direct appointments, which means that client comes to us.
We send an application directly to an insurance company, less mouths to feed. It's just inherently a smoother process for the end purchaser, right, which is the cannabis operator.
Other times, if there's certain insurance companies that don't allow direct access, we have to use a wholesale brokerage. So there's a lot of different wholesale brokerages.
There's a lot of these wholesale brokerages that act as an intermediary between the retail broker being AlphaRoot and the end insurance company.
And unfortunately, that's just the nature of the insurance industry. It's pretty archaic still, which I'm sure you're not very surprised by.
It's one of the oldest industries, but what's great is insurance companies are dictated by state and local legislation, right?
So that's why insurance companies can write in the cannabis space, although it's federally illegal, because depending on the state, they can write in either medical or...
All or recreational states. And then in terms of our compensation, to your point, we need to make some money on the transaction and it is a designated percentage depending on the carrier relationship.
Right. So if we go directly to a specific insurance company, it could be, you know, 15%. It could be 10%.
It could be 7%. It really depends on the product and the relationship. If we have to use a wholesaler, I would say 7% to 15% is typically common compensation for retail brokers.
Some can take higher. But it really just depends. I would say that's where we typically fall.
@32:49 - Dai Truong (Arlington Capital Advisors)
How does that work with renewal? From my understanding, I think it's typically like an annual policy. So if a customer comes back for a policy with the same carrier they are used to.
So getting paid that 7% to 15% or do they come to AlphaRoot and say, “Hey, let's make sure we're so getting the best rates” and they just go through you.
@33:10 - Eric Schneider (AlphaRoot)
Yeah, I would say it's a similar commission structure. Some carriers like to reduce the commission on renewals and just give like larger amount for new business.
It, like I said, it really depends on the different carrier and what their specific rules around that are. But what we do every year is we take that same application and we remarket it, right, because we understand that the landscape is constantly changing, you know, who was really competitive last year.
May not be as competitive for our client this year. Our client may have grown substantially, right, and they may have different evolving needs.
So we typically remarket year over year. However, we will give the current carrier what's called a last look. What we try to do, and that's the benefit of working with a broker, like sometimes there's this misnomer that I need to reach out to four or different brokers to get four or five different quotes.
That's not the case, right? Because we have access to all these markets, we can provide all those different quote options, provide what the pros and cons are, do a coverage analysis, then ultimately allow the business to make the best decision.
Do they want the insurance company that's a little bit more expensive but has much more robust coverage? Or are they keeping things lean right now and they just want something to check a box?
I think it's important for us to educate on the pros and cons, and we obviously always push coverage first because that's our fiduciary duty to our clients, but we also understand that we're operating a business and you have a ton of more expenses.
We want to be able to provide a lot of different options on the spectrum and then empower the business to make the best decision.
That's our, but year over year, we're looking at getting a lot of competitive bids. And then at the end saying, hey, incumbent carrier who wrote the business last year, we received, you know, these different options.
Is this something that you're going to be able to compete on or are we going to be moving the business?
And it's a way that we can balance that relationship with the carrier, right? Because it's a hard job for us because we have to dictate and balance our carrier relationships.
But also at the end of the day, our first and primary concern is our clients, right? But at the same time, if we're constantly moving business and not doing the right thing on the carrier side, we're not going to be able to provide the best solutions for our clients.
So it's definitely a delicate dance. And going back to the four or five brokers. I think a big thing that a lot of, you know, that may have not purchased insurance previously is like, you're only allowed one broker for one carrier.
So what that means is, if you Reach out to AlphaRoot, he sends a submission to CannGen. And then that operator says, you know what, I want to get three or four other quotes from three or four of the brokerages.
It's a pretty limited space, right? And so what I would say is like the best way to go about it is to abuse interviews, see who you trust based on their capabilities, their servicing, their...
he ECK Bertschnez. And then either allow one or two in which carriers that they're going to, because you know if, you know, days, dispensary comes to us, and you reach out for a quote, we put a CannGen, you send an application with another broker, they reach out to CannGen.
They're going to say, sorry, other broker, we're already working with AlphaRoot on this. in order for you to gain access, you'll need what's called a broker record letter.
And what that does is that basically takes the access away from the health route and gives it a very powerful letter that is signed.
You're basically saying, hey, I want to go with you here. Right. So that's what we always think is like, again, education, transparency, and service are just like the three biggest pillars that we really pride ourselves on, and then allowing the operators to make the best decision for their business.
And, you know, we'd like to think based on our service and our expertise in the space. Now we'd like to hope that we're that solution, but at the end of the day, I just can't stress that enough to really vet brokers, decide who you wanna work with truthfully before the quoting process starts, because then what you're gonna happen is, you're gonna have a lot of brokers calling you, be like, hey, I'm blocked here, like what's going on?
And there's just a lot of, and then you're confused. at the end of the day, Ken Jen's getting submission from my two or three.
Brokers, so they're kind of frustrated because that's not showing commitment on their side. And at the end of the day, all that does is hurt the operator's image in the insurance marketplace.
And so, and that's just the truth that we try to just provide that education and transparency. And if they want to work with us, great if they have somebody local that they've been working with the years and you know they have that trust relationship, I can respect that.
But we really try to just provide that education and transparency to prospects.
@38:34 - Dai Truong (Arlington Capital Advisors)
Yeah, so it seems like really the name of the game in terms of being an insurance broker, whether cannabis or not, is about getting your brand recognized out there, you know, being everywhere.
So folks at least give you a chance. And then if you submit first with an out-p route, you guys are already in there versus any of the other competitors.
So it seems like content and a lot of stuff you guys are doing are more important than others.
@39:00 - Eric Schneider (AlphaRoot)
Yeah, no, absolutely. like the frustrating things at times is it could be like, first in has the advantage, not necessarily the best in.
Does that make sense?
@39:10 - Dai Truong (Arlington Capital Advisors)
Oh, yeah.
@39:11 - Eric Schneider (AlphaRoot)
Totally. Yeah. so, you know, if we reach out first and we're able to go to the market, that's great.
We have, you know, a competitive advantage. But, we may be the best fit for that client, but we're the fourth broker that they're talking to.
There's a lot of other brokers and businesses that are doing stuff somewhere to help. Right. and have access to cannabis specific markets.
You know, and that we, we understand that and we just try to deliver the best service that we can for our clients.
Provide that technology, provide that cannabis expertise and, you know, then The thing that we also really try to do is what other value can we add to our clients outside of insurance.
We built a nice little ecosystem of other ancillary providers to the cannabis space. like Dini Banking, do you need payroll and HR software?
Do you need a payment processor? Going to all these events and talking to all of these folks, we built out a nice little ecosystem of vetted trusted providers that we can point people in the right direction, aside from just insurance, because that's really like one small component of the overall business.
@40:37 - Dai Truong (Arlington Capital Advisors)
No, I think your site provides a ton of information. I know exactly what you're talking about in terms of partnerships.
You guys have BLAZE, Dama, C15 Solutions, Würk, and I know you're adding more. So certainly keep up the good work and keep getting the brand out there.
@40:53 - Eric Schneider (AlphaRoot)
Thank you so much for having me. It's been awesome. Keep doing what you're doing because the Highly Objective posts that you put out honestly are like the most informative content really out there and gives a great snapshot of what's going on in the industry across transactions capital raises, you know state legislation so we really appreciate everything that you're doing.