Legalized marijuana and the implications for insurance

Insurance Insights | April 17, 2017

Legalized marijuana and the implications for insurance

With the federal government having revealed their plans for legalizing marijuana, everyone, including consumers, regulators, insurers, families and employers are eagerly asking questions about the coming changes. The legislation is expected to include a minimum age of 18 to purchase marijuana, allowing Canadians to grow four plants per household, licensing producers and allowing provinces and territories set prices.Because the fledgling pot industry is so new and has little to no legislation set in stone, marijuana consumers and non-users alike are faced with unique challenges as the landscape shifts. As with any manufactured or pharmaceutical product, there is liability risk involved with marijuana.It seems that initially marijuana related litigation may become more common, but the lawsuits won’t necessarily be successful. Regardless, insurance customers and their brokers should be aware of these issues and adjust their coverages accordingly.Coverages will lag behind developments on the ground as insurers play catch up, although some are looking at providing medical marijuana coverage. That being said, there are still a few hurdles in the way, not least the fact that Canada’s health ministry has yet to assign a drug identification number to marijuana. Health Canada assigns these numbers once it tests marijuana and is satisfied the drug is safe for medical use.Nevertheless, some companies are getting a head start as Shoppers Drug Mart and its parent Loblaws announced their intention to offer medical marijuana coverage as part of their employee benefit plans. This may not be an option for every employer because some will be uncomfortable covering marijuana and will demand to see the research and evidence supporting the safe use of medicinal marijuana. Others may be worried that employees will be consuming marijuana at work.However, the ball is rolling in earnest as Canada’s recreational and medicinal marijuana sales are expected to top $6 billion by 2021. With demand comes supply and we have seen marijuana insurers and suppliers moving into Canada. Of the latter, some are even publicly traded. The key insurance takeaway with impending legal pot is that policy coverages and choices may shift rapidly as providers adapt to changes. Moreover, you should remain highly vigilant regarding new marijuana legislation to avoid running afoul of any new laws and regulations.We will keep you posted about the latest marijuana legalization news and developments. In the meantime, comment below or tweet us @TheShepherdGroup to tell us what you’re planning when legal pot hits the shelves.