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Own Your Risk. Own the Outcome.

A selective, member-owned captive insurance structure for established cannabis operators seeking greater control over claims, retained underwriting results, and long-term capital formation.

See If Your Company Qualifies Request a Confidential Review

Expanded Coverage Options

Coverage structured around cannabis operations — not standard carrier exclusions.

Delivered through a fully regulated captive insurance framework.

Member-Controlled Claims

Claims are funded by the captive members, aligning incentives from the outset.

All claims subject to underwriting approval and claims development.

Underwriting Profits Return to Members

Excess premium remains within the captive instead of being transferred to a carrier.

Illustrative outcomes depend on loss experience and program performance.

Select Risk Captive is purpose-built for best-in-class operators with disciplined risk management. Participation is limited and subject to underwriting approval.

Who SRC Is For

  • Established single-state or multi-state cannabis operators
  • Demonstrated loss control or documented risk management practices
  • Leadership teams operating on a 5–10 year horizon

Who SRC Is NOT For

  • Startups
  • Distressed risks
  • Short-term cost shoppers

Designed for established, best-in-class cannabis operators.
Not available to startups or distressed risks.

Video cover
$100
$1.06M

5-Year

$150
$2.7M+

10-Year

Ownership Changes the Outcome

The difference is not how much insurance you buy — it is who owns the financial result.

Guaranteed Cost

SRC Captive

What Happens to Your Insurance Dollars Over Time?

Most cannabis operators view insurance as a sunk cost. Best-in-class operators treat it as a long-term financial strategy.

In a traditional guaranteed-cost insurance program, premiums are paid, losses are covered, and any underwriting profit belongs entirely to the carrier. Even when losses are low and risk management is strong, the financial upside never accrues to the insured.

A captive insurance structure changes that equation.

With SRC, qualified members retain ownership of their underwriting results. When losses are well-managed, excess premium is not lost—it is retained, invested, and ultimately returned to the members over time, subject to claims development and program guidelines.

The difference is not how much insurance you buy.

The difference is who owns the result.

Guaranteed Cost Insurance

  • Insurance spend is a recurring expense
  • Underwriting profits accrue to the carrier
  • No compounding of retained value
  • No long-term capital formation

SRC Captive Structure

  • Insurance spend becomes a risk-financing strategy
  • Underwriting results remain member-owned
  • Capital is invested during claims development
  • Value may compound over time
  • Potential contribution to enterprise value

Over a multi-year horizon, this distinction can represent the difference between funding an external carrier — or building a durable internal asset tied directly to operational performance.

See If Your Company Qualifies

Select Risk Captive is available only to established operators with strong risk discipline.

Compounding Is the Strategy

Insurance isn’t the cost. Ownership is.

Admin Cost: 40%

Illustrative Captive Surplus Over Time (Subject to Claims Development)

  • Flat annual premium of $500,000
  • Program costs estimated at 40% of premium
  • 60% allocated to the loss fund at the beginning of each year
  • Loss ratios applied to total premium
  • Unused loss funding carries forward year-to-year
  • 5% illustrative annual investment return
  • Subject to claims development, reserve requirements, and regulatory constraints

Illustrative Case Studies by Loss Ratio

Examples below demonstrate how different loss experiences may impact underwriting results and projected captive surplus over time.

llustrative only. Not a guarantee of results.

Operator Profile

This operator represents a mature, best-in-class cannabis business with disciplined risk management and a strong safety culture. Loss controls are embedded across operations, claims are infrequent, and volatility is minimal. The business operates with a long-term mindset and views insurance as a strategic financial tool rather than a yearly expense.

Program Structure (Annual)

  • Annual Premium: $500,000
  • Admin / Program Costs (40%): $200,000
  • Claims Fund (60%): $300,000

Claims Experience

  • Loss Ratio: 25%
  • Annual Claims Paid: $125,000
  • Half-Year Claim Payout: 62,500

Claims are paid as losses occur throughout the year. The claims fund is more than sufficient, resulting in meaningful excess premium.

Annual Underwriting Result

  • Excess Retained Annually: $175,000

This excess premium remains owned by the captive members, invested while claims mature, and ultimately emerges as retained equity.

Capital Emergence — 5-Year View (Illustrative, 5% Return)

YearBeginning BalanceAnnual RetainedGrowth @ 5%Ending Balance
1$0$175,000$8,750$183,750
2$183,750$175,000$17,938$376,688
3$376,688$175,000$27,584$579,272
4$579,272$175,000$37,214$791,486
5$791,486$175,000$48,074$1,014,560

≈ $1.06M retained equity (rounded for claims development)

Capital Emergence — 10-Year View (Illustrative)

YearEnding Balance
6$1,240,288
7$1,486,302
8$1,755,117
9$2,049,873
10$2,370,867+

≈ $2.7M+ over a full 10-year horizon

Outcome Comparison

HorizonGuaranteed-Cost InsuranceSRC Captive
5 Years$0 retained~$1.06M retained equity
10 Years$0 retained~$2.7M+ retained equity

Key Insight

At a 25% loss ratio, SRC converts insurance spend into a multi-million-dollar internal asset. Guaranteed-cost insurance delivers identical claims protection—but no ownership, no compounding, and no retained value.

Operator Profile

This operator reflects a typical, well-managed cannabis business. Safety programs are in place, claims occur periodically, and losses remain predictable. While not best-in-class, risk performance is stable and insurable.

Program Structure (Annual)

  • Annual Premium: $500,000
  • Admin / Program Costs: $200,000
  • Claims Fund: $300,000

Claims Experience

  • Loss Ratio: 35%
  • Annual Claims Paid: $175,000
  • Half-Year Claim Payout: $87,500

Claims are fully funded, and excess premium remains after losses are paid.

Annual Underwriting Result

  • Excess Retained Annually: $125,000

This retained amount is invested and compounds over time within the captive.

Capital Emergence — 5-Year View (Illustrative, 5% Return)

YearBeginning BalanceAnnual RetainedGrowth @ 5%Ending Balance
1$0$125,000$6,250$131,250
2$131,250$125,000$13,125$269,375
3$269,375$125,000$19,969$414,344
4$414,344$125,000$26,467$565,811
5$565,811$125,000$34,041$724,852

≈ $725K retained equity

Capital Emergence — 10-Year View (Illustrative)

YearEnding Balance
6$888,095
7$1,072,500
8$1,281,125
9$1,516,931
10$1,781,778+

≈ $2.7M+ over a full 10-year horizon

Outcome Comparison

HorizonGuaranteed-Cost InsuranceSRC Captive
5 Years$0 retained~$725K retained equity
10 Years$0 retained~$1.9M+ retained equity

Key Insight

At a 35% loss ratio, SRC still delivers meaningful capital accumulation. Guaranteed-cost insurance produces the same claims outcome—but none of the retained underwriting profit.

Operator Profile

This operator experiences higher claims frequency but remains within underwriting expectations. Losses are elevated but manageable, and the business remains insurable within a captive framework.

Program Structure (Annual)

  • Annual Premium: $500,000
  • Admin / Program Costs: $200,000
  • Claims Fund: $300,000

Claims Experience

  • Loss Ratio: 45%
  • Annual Claims Paid: $225,000
  • Half-Year Claim Payout: $112,500

Claims are paid in full, though less excess premium remains..

Annual Underwriting Result

  • Excess Retained Annually: $75,000

Even at this loss level, capital continues to emerge.

Capital Emergence — 5-Year View (Illustrative, 5% Return)

YearBeginning BalanceAnnual RetainedGrowth @ 5%Ending Balance
1$0$75,000$3,750$78,750
2$78,750$75,000$7,875$161,625
3$161,625$75,000$11,831$248,456
4$248,456$75,000$16,423$339,879
5$339,879$75,000$20,744$435,623

≈ $435K retained equity

Capital Emergence — 10-Year View (Illustrative)

YearEnding Balance
6$532,404
7$646,024
8$778,825
9$933,766
10$1,114,454+

≈ $1.15M+ over 10 years

Outcome Comparison

HorizonGuaranteed-Cost InsuranceSRC Captive
5 Years$0 retained~$435K retained equity
10 Years$0 retained~$1.15M+ retained equity

Key Insight

Even at a 45% loss ratio, SRC continues to generate retained value over time. Guaranteed-cost insurance still produces zero retained equity, regardless of loss experience.\

SRC Legacy Wealth Calculator

Illustrative only. Not an offer of insurance or a guarantee of results.

Assumptions

  • Admin / Program Costs: 40%
  • Claims Fund Allocation: 60%
  • Investment Return: 6.5% annually
  • Claims Tail: 3 years
Captive Equity

$—

Carrier Profit

$—

Total Premium

$—

Serving the Full Cannabis Operating Ecosystem

Coverage structured for compliant, best-in-class operators across cultivation, manufacturing, laboratory, and retail operations.

855-507-2622

manufacturing

Dispensaries

distribution

automation

Before You Decide

Key questions operators typically review when evaluating a transition from guaranteed-cost insurance to a captive structure.

What is Select Risk Captive (SRC)?

Select Risk Captive (SRC) is a member-owned captive insurance program created exclusively for established cannabis operators. It is designed to replace traditional guaranteed-cost insurance with a structure that delivers broader coverage, transparent claims handling, and long-term capital retention—while remaining fully compliant with regulatory requirements.

How is SRC different from traditional cannabis insurance?

Traditional insurance treats premiums as a fixed expense and transfers underwriting profits to the carrier. SRC restructures insurance into a regulated risk-financing strategy, allowing qualified members to retain underwriting results, invest excess capital, and build enterprise value over time.

What types of risks can be covered through SRC?

SRC is structured around the real operational risks of cannabis businesses, including property-related exposures. Coverage terms are customized within the captive framework and are not constrained by the exclusions and limitations common in standard carrier policies.

Is SRC compliant with insurance regulations?

Yes. SRC operates within established captive insurance frameworks and is structured to meet all applicable regulatory, governance, and reporting standards. Participation is subject to underwriting approval and program guidelines.

How are claims handled under the SRC program?

Claims are administered within a member-aligned structure, ensuring transparency and accountability. Unlike traditional carriers, SRC’s claims approach prioritizes long-term financial outcomes and disciplined risk management—not short-term profit extraction.

Who ultimately funds claims in a captive structure?

Claims are funded from the captive’s pooled capital, which is built from member premiums. This alignment incentivizes proactive risk mitigation and operational discipline across the membership.

Does SRC reduce claims oversight or protections?

No. SRC maintains formal claims administration protocols and professional oversight. The difference is governance—not reduced protections—giving members clarity and control over how claims affect long-term capital.

What happens to unused premium in SRC?

When losses are managed effectively, excess premium is retained within the captive, invested while claims mature, and ultimately returned to members—subject to development periods and program terms. In guaranteed-cost insurance, this value is permanently lost to the carrier.

Why is compounding a critical advantage of SRC?

Over multi-year participation, retained underwriting profits can compound into meaningful captive equity. This creates a balance-sheet asset tied directly to your organization’s risk performance rather than an ongoing sunk cost.

Is the SRC Wealth Calculator a guarantee of returns?

No. All projections are illustrative only and do not represent a guarantee of performance or insurance coverage. Actual results depend on loss experience, participation duration, and adherence to program requirements.

Who qualifies for Select Risk Captive?

SRC is available only to financially stable, operationally mature cannabis operators with demonstrated risk controls. The program is not available to startups, distressed businesses, or operators with unmanaged loss exposure.

Why is SRC selective about membership?

Captive performance depends on disciplined participation. Selectivity protects existing members, ensures regulatory integrity, and preserves long-term capital outcomes across the program.

How do I begin the qualification process?

The first step is a confidential SRC review, where your operational profile, risk history, and financial structure are evaluated. This assessment determines eligibility and outlines potential outcomes—without obligation.

What happens after qualification?

Qualified operators receive a customized captive analysis, allowing leadership to evaluate SRC as a strategic alternative to traditional insurance before making any commitment.

See if this applies to your operation?

Get Your Custom SRC Analysis

A confidential, no-obligation review designed for qualified cannabis operators evaluating long-term risk and capital strategy.

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    The difference isn’t risk. It’s who keeps the result.

    SRC is designed for operators who think beyond renewals and view insurance as a capital strategy.

    Request a Confidential Review