Insurance industry faces impact in “virtually every line of business” from marijuana legalization

Published: November 28, 2017

Updated: July 24, 2018

Author: Luke Jones



Canada’s Liberal federal government will legalize marijuana for recreational use in the summer of 2018 and the insurance industry is scrambling to create a framework around the legislation. However, an industry expert has warned the legalization of cannabis will “impact virtually every line of business” of insurance and create a maze of risks.

“If you buy a cookie at Mrs. Smith’s cookie shop with cannabis, is she going to be required to define the THC levels within there?” asked Mark Woodall, president and CEO of Special Risk Insurance Managers in Langley, B.C., discussing the main plant ingredient in cannabis. “Don’t know. It’s coming so fast and [it’s] such a broad range topic, it’s going to impact your liability, your accident benefits, your employee benefits, and your property [insurance].”

“If everybody is now modifying their electrical system to allow for hydroponics of four or 24 plants, and they do it themselves and ultimately burn the premises down, is it covered or not covered?” Woodall questioned. “Who wants to cover, who doesn’t want to cover?”

Arguably one problem is the individual approaches being taken by provinces, with no central frameworks from federal government. However, no provinces or federal organizations have created an appropriate level for THC levels.

“What is the potency level of the product and how does an individual react to it?” Woodall wonders aloud. “Can you buy a cookie from Mrs. Smith that’s got a minimal level of THC impact from it, and then you go across the street and you’ve got one that is totally different?

“Once you get the impact of the drug in your system, how long does it stay? What is the down time period? In alcohol, we’ve got it fairly defined.”

Away from direct insurance, law enforcement is also facing problems with impending marijuana legalization. Specifically, police have not created a sure-fire method for measuring cannabis impairment in drivers.