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Own Your Risk. Own the Outcome.

A selective, member-owned captive insurance program designed for established cannabis operators to retain underwriting profits, control claims, and build long-term capital.

See If Your Company Qualifies Request a Confidential Review

Expanded Coverage Options

Coverage designed around cannabis operations—not carrier exclusions.

Unlike traditional guaranteed-cost insurance programs.

Member-Controlled Claims

Aligned incentives: members fund claims, not outside carriers

Claims paid subject to underwriting approval and claims development.

Underwriting Profits Return to Members

Excess premium compounds continuously, instead of disappearing

Delivered through a fully regulated captive insurance structure.

Select Risk Captive is designed for established, best-in-class cannabis operators. Not available to startups or distressed risks.

Who SRC Is For

  • Established multi-state or single-state operators
  • Strong loss history or risk controls
  • Long-term operators (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 isn’t how much insurance you buy—it’s who owns the 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 pure operating expense
  • Underwriting profits accrue to the carrier
  • No retained capital
  • No compounding
  • No long-term enterprise value created

SRC Captive Structure

  • Insurance spend becomes a risk-financing strategy
  • Underwriting profits remain with the members
  • Capital is invested while claims mature
  • Value compounds over time
  • Equity is created at the enterprise level

Over a multi-year horizon, this distinction can represent the difference between continuously funding an external carrier—or building a meaningful internal asset tied directly to your organization’s risk performance.

See If Your Company Qualifies

Select Risk Captive is built exclusively for established cannabis operators with strong risk discipline. Not available to startups or distressed risks.

Compounding Is the Strategy

Insurance isn’t the cost. Ownership is.

Admin Cost: 40%

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, and retail.

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Before You Decide

Key questions operators review before moving from guaranteed-cost insurance to SRC.

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

Confidential. No obligation. Designed for qualified operators only.

    Latest Insights on Cannabis Risk & Capital Strategy

    Strategic commentary for CFOs and risk leaders thinking beyond annual renewals.

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    The difference isn't risk. It's who keeps the profit.

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

    Request a Confidential Review
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