Mark your calendars: after a tumultuous back-and-forth between the House of Commons and the Senate, Bill C-45 has finally been passed, which means Canadians will be able to consume marijuana recreationally starting October 17.
Legalization has been a long time coming and an event that many companies in the insurance space have been diligently preparing for. The specialty lines MGA Special Risk Insurance Managers (SRIM) has stepped up to the plate in terms of bringing coverage to businesses in this emerging market –it’s already providing insurance for some cannabis facilities.
“With this cannabis program coming at us fast and furious, we’re having to move at speeds not typical to the insurance market,” said Mark Woodall, SRIM’s president and CEO. “The whole issue of cannabis is changing, it’s coming. The main markets are quite unsure about it, so we’re doing a lot of work, a lot of research, a lot of risk management, and we’re going to make product offerings because the marketplace does need coverage.”
Looking to the US is one tactic that SRIM has used – insurance examples from California, Nevada, and Washington have all helped the MGA figure out where to avoid missteps. There will, of course, be differences in the marijuana marketplace back at home. The federal government has legalized recreational cannabis, but the provinces will administer it, so there will be 10 different legal jurisdictions.
Still, the questions around the sector are seemingly endless and won’t necessarily be clarified until months or even years into legalization. How to detect impairment, important to determining social host and commercial host liability, is one of those. What lawsuits, if any, will arise from cannabis use, and will there be a legal minefield, like in the case of tobacco, is another. Even the number of expected cannabis users is difficult to pin down.
“Right now, there’s approximately 260,000 legal cannabis users in Canada that have medical certificates, so day two, after cannabis is legalized, how many consumers are we going to have? We’re guessing somewhere in the area of 2.5 million to five million, so it’s that broad,” said Woodall, adding that if it’s five million people, the insurance market needs to ramp up quickly.
“A lot of these we don’t know and we’re just trying to figure it out as we go,” he said.