James Whitcomb: The Visionary Leading Cannabis Insurance Innovation in 2023

In this exciting episode of Proud to Work in Cannabis, host Karson Humiston is joined by special guest James Whitcomb, Founder & CEO of Frontier Risk. Learn how Frontier Risk is redefining cannabis insurance, while getting deep insights into one of the industry’s greatest pain points, made less painful with the expertise of James and his team – Let’s jump in!

The Background on Frontier Risk

First things first, James and the exceptional team at Frontier Risk have something big to celebrate. They've recently raised their Seed Round, and what's more impressive is that they did it in a year where VC funding for cannabis technology has been scarce. It's a testament to their innovation and dedication to making a difference in the cannabis industry.

James acknowledges the rollercoaster ride VCs have had, but he's optimistic about the future. With the support of investors like Casa Verde, he's laying the foundation to transform cannabis insurance. His goal? To create a massive balance sheet and become a carrier, a reinsurer behind all policies, not just offering risk management expertise. This visionary approach aims to solve the capacity problem that has long plagued the cannabis industry.

Why We Need a Cannabis-Specific Insurance Business & the Problems Frontier Risk Solves

James encourages us to dissect cannabis insurance's intricacies, understanding the problem to appreciate the solution. The problem? Cannabis insurance is expensive, primarily because of limited options and capacity among insurance carriers willing to work with cannabis companies.

The cannabis industry's novelty adds another layer of complexity. Traditional insurance relies on historical industry data to assess risk, something the cannabis industry doesn't have. What's more, cannabis companies that do find insurance often fear submitting claims, disrupting the data insurance companies rely on. This leaves the insurance industry in the dark about cannabis risk.

James brings a unique perspective, having launched a plant-touching MSO, Parallel. He knows the pains and questions leaders face daily, allowing Frontier Risk to design better policies and ask more relevant underwriting questions. This approach bridges the gap between what's perceived as risky and what truly poses risks in the cannabis industry.

At Frontier Risk, they understand the importance of properly classifying each worker to ensure companies don't overpay for insurance. As Karson humorously shares from her experience at Vangst, insurance companies often struggle to classify unconventional roles, leading to skyrocketing premiums. Frontier Risk, however, knows the right questions to ask to avoid these pitfalls.

Backing It Up: James' Journey Before Cannabis & How He Got Into Cannabis

Many in the cannabis industry aspire to start their own business, just like James did. He had a thriving career on Wall Street when he received a call that would change his life. An investor in Florida's first cannabis-licensed company wanted James to join and help build the business.

James shares a captivating anecdote about his transition from Wall Street. He recounts the moment a Senior Partner from his team expressed doubts about his ability to secure kindergarten spots for his children, highlighting the conservative mindset often found in old-school corporate settings. This remark, as James puts it, added an extra layer of anxiety to his already daring decision. It's worth noting that although his children aren't of kindergarten age yet, they successfully navigated a competitive preschool admission process without cannabis playing any role in the equation.

From there, James dedicated himself to Parallel, wearing multiple hats from CFO to CEO. His experience in the industry and passion for helping others navigate it set the stage for Frontier Risk.

Building Frontier Risk

While James wasn't an original founder of Parallel, his hands-on role from the start gave him the founder's experience. The cannabis industry is like a perpetual startup, and every day brought new challenges that paralleled day zero of running a business. For James, success boils down to the right thesis, perfect timing, and scalability. Frontier Risk has the first two, and time will tell about the third.

Several former colleagues from Parallel followed James to Frontier Risk, selected for one trait: resilience. They share James' dedication to overcoming challenges in the ever-evolving cannabis industry.

James' Views of the Current State of the Industry

As for the current state of the industry, James is cautiously optimistic. While federal cannabis banking policies have failed numerous times, this time feels different. He believes it's about priorities now, and cannabis leaders must stay engaged and advocate for change.

The recent HHS letter caught many by surprise, suggesting that federal cannabis reform might happen sooner than expected. It's an exciting time for the industry, but as James warns, it's crucial to keep the pressure on representatives and ensure cannabis reform becomes a reality.

Proud to Work in Cannabis

James Whitcomb's journey, insights, and unwavering commitment to the cannabis industry have made this episode an absolute must-listen. Whether it's peeling back the layers of cannabis insurance complexities or gaining insider knowledge about how Frontier Risk is reshaping this vital aspect of the industry, this episode will undoubtedly broaden your understanding of the current cannabis landscape. So, don't miss out on this valuable opportunity for insight and education. Tune in now to learn more!