Alex Hearding and Red Wolf Risk aim to help operators navigate risk management in the cannabis industry
When Alex Hearding entered the cannabis industry, it wasn’t with the intention of becoming a risk management expert. With a background in science, engineering, and occupational safety, Hearding initially envisioned himself as an operator, securing one of Colorado’s first recreational cultivation licenses. However, early experiences with regulatory and operational challenges revealed a larger gap in the industry. A critical need for proactive risk management tailored to cannabis businesses.
“My background is in science, engineering, and occupational safety. I originally entered the cannabis industry as someone passionate about applying those disciplines to an industry that lacked formal infrastructure and standards,” Hearding said. “Over time, I shifted my focus entirely to risk management, not from the outside as a regulator or insurer, but from within the industry, helping operators protect their people, property, and businesses.”
Navigating an underserved market
Through Red Wolf Risk, Hearding works to address the deep flaws he identified in the cannabis insurance market.
“Insurance in this space, really, to be frank with you, is subprime,” Hearding told Greenway. “There’s a lot of exposure that these businesses are seeing, and they’re also getting really unfair premiums. When carriers don’t understand something, when underwriters don’t fully understand the risk, they fill that void with more premiums.”
Cannabis operators often find themselves paying sky-high rates for limited coverage while facing safeguard endorsements that can limit or even eliminate payouts.
“Most insurance agents really don’t understand cannabis operations and how to properly explain coverages and their impact,” Hearding said. “They don’t fully understand the right questions to ask, the limitations of policies, or the nuances of safeguard endorsements.”
Red Wolf Risk
With a strong foundation in worker safety and operational compliance, Hearding began developing what would become Red Wolf Risk’s flagship program, the Operational Preparedness System (OPS). Originally consulting in areas like OSHA compliance and inventory control, he expanded his expertise to create a comprehensive operational risk assessment model.
“I developed this huge spreadsheet that identified 400 different processes and controls in the industry,” Hearding said. “I was able to assess a full operation, not just worker safety, but everything from design-build, implementation through operations and continuous improvement.”
After years of refining his methods, Hearding partnered with Danielle Hernandez of Gilbert Insurance to create OPS, a revolutionary risk management program tailored for cannabis businesses.
“OPS is a comprehensive program that helps cannabis operators take control of their operational risks in a structured and measurable way,” Hearding stated. “It integrates safety, compliance, and property risk into one system. We back it with ongoing support, monitoring, and insurance advocacy.”
Transforming cannabis risk management
Red Wolf Risk doesn’t just mitigate operational risks. It transforms them into financial advantages. Through OPS, detailed assessments, facility improvements, documentation, and validation provide operators with tangible leverage in negotiating insurance terms.
“When a cannabis business completes OPS, they walk away with a detailed risk profile, controls implemented, documented training, equipment logs, and verified improvements, all of which can be shared directly with underwriters,” Hearding continued. “We’re presenting proof.”
That proof yields real savings. A recent client operating a full-vertical cannabis business saved nearly $170,000 on insurance premiums after implementing Red Wolf Risk’s program, reinvesting over $150,000 back into operations.
“The OPS program cost them less than 12% of those savings, which is a return on their investment of less than seven weeks,” he said.
Fractional risk management
Hearding sees Red Wolf Risk as offering more than just compliance consulting. The company positions itself as a fractional risk management solution for cannabis businesses.
“When I’m the fractional risk manager of a business, what I can do is an assessment and I can find the beneficial controls,” Hearding said. “I identify issues, recommend fixes, and advocate with carriers based on operational improvements.”
OPS Intelligence Reports produced by Red Wolf Risk provide operators with actionable insights while building negotiating leverage with underwriters.
Partnerships to strengthen protection
Key to Red Wolf Risk’s success is Hearding’s collaboration with Hernandez, whose approach to insurance mirrors his operator-first philosophy.
“Danielle is one of the few brokers who truly gets it. She understands the nuances of cannabis operations and knows how to structure policies that protect businesses, not just sell them,” Hearding said. “OPS does not exist without her, and she is our exclusive agent for this program.”
Together, Red Wolf Risk addresses major gaps in cannabis insurance coverage, identifying overlooked areas like equipment breakdown and ensuring comprehensive protection.
“There’s a tremendous amount of exposure we’re finding,” Hearding said. “So many businesses aren’t covered on equipment breakdown. That’s one of the biggest losses and claims right now.”
Claims advocacy and expert support
Hearding has been vocal about safeguard endorsements and policy exclusions that leave operators vulnerable.
“These are the things that are basically like rules of engagement to get paid in a claim,” Hearding said. “If you’re not doing X, you’re not going to get paid, most of the operators we speak to don’t know these are on the policy because their agents haven’t explained what’s in their policy.”
Safeguard endorsements and exclusions, particularly those excluding cannabis key coverage, remain a hidden risk in many policies.
Red Wolf Risk sets itself apart through a commitment to claims advocacy. Unlike traditional agents who are often removed from the claims process during litigation, Red Wolf ensures operators have expert support when it matters most.
“At the time operators need the most help, traditional agents are often sidelined,” he said. “We have the best cannabis claims adjuster in the country on our team. We stay involved throughout the process to fight for the proper valuation and ensure operators receive the payouts they deserve.”
This advocacy is built into the OPS model, offering clients peace of mind that their interests are protected long before and during any claim.
Chronic risk education
Beyond immediate financial savings, Red Wolf Risk is committed to a larger vision of cannabis industry education.
“I love the idea of creating a ‘chronic risk’ education platform,” Hearding said. “Let’s talk about why insurance sucks, what to do about it, and how to protect yourself.”
Red Wolf Risk plans to contribute regular insights to help operators understand coverage pitfalls, identify high-risk claims areas, and implement best practices before disasters strike.
Red Wolf Risk doesn’t stop at assessing risk. The company helps operators integrate best practices into daily operations.
“Preventative maintenance is huge,” Hearding said. “Every piece of high-risk equipment, extraction systems, HVAC, dehumidifiers, should have a maintenance log, cleaning record, and safety procedure tied to it.”
Red Wolf Risk also encourages stronger vendor management practices and continuous compliance documentation to strengthen insurance profiles.
“If you’re doing the right things but it’s not documented, it doesn’t exist,” Hearding said. “We give operators the tools to quantify their efforts and advocate for themselves.”
As regulations evolve, Red Wolf Risk is helping operators adopt Quality Management Systems (QMS) that not only improve operations but also impact insurance outcomes.
“Our strategy translates to more preferential insurance placements”Hearding said. “By showing a commitment to quality and risk reduction, operators can create new advantages when negotiating policies.”
Red Wolf Risk works with clients to strengthen their compliance programs, often incorporating QMS frameworks that help mitigate potential claims and streamline recall management processes.
Emerging risks
Looking ahead, Hearding emphasizes that cannabis businesses must prepare for emerging risks that extend beyond traditional hazards.
“As businesses scale and automate, equipment failure and cyber risk are becoming bigger issues,” Hearding said. “Insurance carriers are demanding more documentation not just for safety but also for sustainability and vendor compliance.”
Red Wolf Risk continues to adapt OPS and its educational outreach to ensure operators stay ahead of these growing concerns, reinforcing resilience across the industry.
Building a safer, smarter cannabis industry
At its core, Red Wolf Risk is about more than premiums and payouts. It is about building a safer, more sustainable cannabis industry.
“Red Wolf Risk exists to make the cannabis industry smarter, safer, and more profitable,” Hearding said. “OPS isn’t just a service. It’s a shift in mindset. By bridging the gap between operations and insurance, we’re giving cannabis businesses the control they’ve always deserved. Our mission is simple: help operators reduce premiums, prevent losses, and get paid when it matters most.”
Through Red Wolf Risk, Hearding aims to show that that proactive risk management isn’t just good business. It is essential for the future of cannabis.
