ARS Implements Captive D&O Arrangement for Cannabis Industry Company

Risk management consulting company Alternative Risk Strategies (ARS) has implemented a captive insurance arrangement for a large, vertically integrated cannabis company.

As part of the arrangement, ARS successfully secured the placement of $10 million of directors and officers (D&O) captive insurance coverage through its ARS Captive Program.

The captive insurance program offered by ARS is designed to give the company's clients a competitive advantage in the marketplace in terms of both the cost of coverage and the ability to afford larger amounts of D&O insurance at significantly lower rates than are available in traditional commercial insurance markets.

Obtaining that D&O coverage allows cannabis companies to attract and retain key management talent, lower their costs, improve cash flow, and accumulate cash and other assets.

"We are pleased to have designed and implemented this effective captive insurance solution for our client in the cannabis industry," Eric Rahn, managing director at ARS, said in a statement. "The interest in our captive program has been remarkable but was not unexpected, as cannabis companies struggle to find affordable and adequate levels of insurance for their business needs and realize attracting and retaining management talent is related to adequate insurance."

The ARS Captive Program is part of an arrangement that ARS has with an insurer with an "A" rating from A.M. Best, which provides ARS and its clients with maximum flexibility in designing and insuring their captives in high-risk and highly-regulated industries, such as cannabis, construction, and transportation.