By: Luke Jones, Published on June 22, 2018 03:13 PM, Last Update on June 22, 2018 12:15 PM
As promised, the Liberal federal government will introduce legalization of recreational cannabis throughout Canada. The confirmation comes as Bill C-45 the Cannabis Act, was passed. As a result, Canadians will be able to legally buy and consume marijuana from October 17, 2018.
While the impending legalization has been known about for a long time, the insurance industry, law enforcement, and local governments are largely unprepared. Specialty lines MGA Special Risk Insurance Manager (SRIM) is among the first to be offering cannabis insurance in the nascent market. Still, problems are inevitable.
“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.”
SRIM says it has turned to the USA for some inspiration, specifically states like California, Nevada, and Washington, where cannabis is legal. Still, the market in Canada will be different because provinces will administer the legalization, resulting in 10 separate legal jurisdictions.
“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.