With full recreational legalization slated to arrive on October 17 in Canada, companies around the world are increasingly eyeing the growing potential of the cannabis market.
An industry going from black market to legal overnight will mean some growing pains, particularly as the question arises of which insurance companies will be willing to underwrite new ventures in the marijuana industry.
The insurance industry is keenly aware of the opportunities presented with legalization, but not all companies are interested in this burgeoning business sector. That skittishness was specifically discussed earlier this month at an industry briefing at the Sheraton Centre in Toronto.
As initially reported on by Canadianunderwriter.ca, the topic of insuring marijuana-related businesses was brought up by associate director Raymond Thomson of A.M. Best, a global credit rating agency focused on insurance providers.
According to the report, Thomson stated, “We have talked to companies in our rating meetings regarding cannabis specifically and the appetite is all over the spectrum.”
He went on to explain, “Some want no part of cannabis risk, other carriers see some opportunities if they can price it properly and mitigate risks.”
At the heart of those risks is Bill C-46, the impaired driving law in Canada. In addition to legalization with the Cannabis Act, Bill C-46 was amended to include drivers who test for more than 5 nanograms of THC in their blood while operating a motor vehicle.
With legalization just a month away, major questions continue to hang over both businesses and law enforcement ahead of the Cannabis Act taking full effect. In particular, it remains unclear if businesses who serve cannabis products will be liable for a customer involved in a vehicle collision in the same way as over-serving alcohol.
These questions will need to be addressed quickly, and will likely lead to swift legal action as major companies like Molson Coors and Coca-Cola are gearing up to join the legal cannabis market in Canada.
Impending legalization has also led to uncertainty in border crossing procedures, as senior US Customs and Border Protection officials have warned involvement in the marijuana industry may be grounds for being denied entry to the country.
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