One battle might be over, but the war is just beginning. Days after the Canadian Senate passed the Cannabis Act with 46 amendments, sending C-45 back to the House of Commons for approval, the government now plans to reject several of the key changes.
Those include asserting the provinces’ right to ban home cultivation of marijuana, banning branded promotional items showing the logos of cannabis producers, and creating a public registry of directors, officers, controlling parent corporations or trusts and their directors, shareholders and members at marijuana companies.
Within the regulatory framework that’s been proposed, responsibilities of retail distribution and retail sales have been handed off to the provinces, which will make commercial cannabis operations unique depending on the region they’re in, though there are also similarities across the country that are important to pay attention o for those in the insurance industry.
“One thing that is consistent across the country is that governments have chosen to be the sole distributor through a distribution warehouse similar to alcohol, and so from that perspective, is there going to be added insurance for people transporting the product, are you going to have to bond certain people?” said Barinder Rasode, president and CEO of NICHE Canada, who will be leading an Insurance Business webinar on regulation and distribution of marijuana on June 21. “Those are the considerations that will fall onto the insurance agencies around the supply chain and the ancillary businesses that are attached to the distribution centre.”
With aspects of the cannabis sector still up in the air, writing coverages based on regulations can be, to some extent, a guessing game.
“Insurance companies and their clients are going to look for some measurable metrics and that is one thing that we are lacking right now,” said Rasode.
Yet despite the hurdles in solidifying the regulatory framework and determining its implications for insurance, cannabis legalization is about opportunity, added the NICHE executive.
“We look at Colorado – for government, it’s half a billion [dollars] in taxes, 127,000 jobs. For all industries, it’s a new target client and that’s the same for the insurance industry. Even though there might be some challenges initially trying to sort out what coverage looks like and how all of this is going to be regulated, certainly it is an economic opportunity in terms of new clients coming on board.”
The learning process will nonetheless be ongoing, which is why insurance professionals need to be in the loop on the entire sector and its incoming rules.
“Keeping up with regulations, and also to take the time to learn more about not only the product but the type of people that are coming into the industry. Unfortunately, I think there’s still a lot of stereotypes on who’s involved in the cannabis industry and I think for the insurance industry, there’s definitely some reframing that’ll probably have to happen,” said Rasode. “Staying on top of the regulations is going to be the number one priority right now.”
Barinder Rasode will be leading a webinar on the regulation and distribution of cannabis on June 21. For more details and to register, click here.
