The wheels have been set in motion for the proliferation of Canada’s cannabis industry, with the legalization date set for October 17 and provinces now working on determining tax structures for the sales of recreational and medical marijuana.
Not all insurance professionals are new to this fledging space – Burns & Wilcox Canada’s team has been underwriting the cannabis sector for over four years now, and has had time to consider the product as well as business owners’ needs long before the plant’s recreational use became legal.
When they started out in the space, there were a handful of licensed producers. Today, there are 113 working within the cannabis industry, according to Andrei Munteanu, special risks analyst at Burns & Wilcox Canada.
“Burns & Wilcox has an advantage in that we’ve been doing this for a long time and have been constantly adapting to changes,” he told Insurance Business. “We are already prepared to provide solutions to all the provinces.”
As expected, the team has seen increased excitement from new entrants into the cannabis market following the federal government’s announcement in June.
“Ever since the legalization, we’ve seen a number of new applications for businesses, such as the large commercial growers, dispensaries, building owners who will be leasing their buildings to dispensaries as well as product recall requests,” said Allison Sinha, property and casualty underwriter for Burns & Wilcox Canada.
“It’s more or less giving everybody the green light,” added Munteanu. “There’s a lot less speculation involved, there’s a lot less risk, so I think more people are comfortable now taking that step forward, and going out and following through on their commitments.”
There are signs that more brokers are also looking to get into the cannabis insurance industry.
“We’ve had a lot of calls and emails inquiring about our capabilities and what we’re able to offer,” explained Sinha. “We’ve spoken to a number of brokers who are looking to go exclusively after this business.”
Paul Clarke, Burns & Wilcox Canada’s national underwriting director, said that his team is offering education to retail brokers through webinars and other methods of instilling knowledge about the products and coverages that brokers have access to.
“We’ve been working on this for a long time, so we’re poised to be able to serve the insureds and the retail brokers,” said Clarke, adding that the products Burns & Wilcox has to offer this market segment include property, stock, business interruption, general liability, product recall, D&O, cyber liability, transit, kidnap and ransom and terrorism coverage, among others.
After all, those new businesses that will actually be bringing cannabis products and services to the market need guidance too, which is why broker education is so crucial.
“The education is key,” remarked Munteanu. “Companies impacted are large and small. They may not have the inside counsel, the inside expertise to deal with certain risk management issues that an organization growing that quickly might have, so for the broker to go in there and offer insights is huge, and it really helps them win over the business. That’s where we can help educate them.”