With widespread legalization of recreational cannabis just around the corner, what can Canadian brokers expect – and should they turn an eye to the US for guidance?
We spoke to Ivan Ross Vrana (Vice President - Public Affairs, Hill+Knowlton Strategies) – who is speaking at the upcoming webinar
‘Cannabis cover: current needs and future opportunities’ on February 08 – for the latest insights.
What are the general differences between the cannabis insurance market in Canada and the US?
I think it’s fairly simple. Cannabis for medical purposes is legal federally, and then we’re going to have legalization for recreational purposes. In Canada you can provide coverage, whereas in the US it’s a little trickier and you have to go state by state … and your company could be potentially in the sights of federal prosecutors.
Insurance Business: So you think overall a broker in Canada would have a more streamlined experience branching out into this field than a broker in the US?
Ivan Ross Vrana: Yes, absolutely. Canada will have laws in place. So, you won’t have any kind of prohibition hanging over you, whether it’s at the federal or provincial level.
The big difference is that Canadian brokers are dealing with a company that is national in scope. And they’re dealing with a national population. I think the level of oversight is more unified and a little bit larger.
IB: And what about other worldwide territories where this change in cannabis legislation has happened? Would you say they’re more similar to the Canadian approach or the US approach?
IRV: Good question! I think a lot of other companies are trying to figure it out. I think Australia would be looking at something similar to the Canadian approach because obviously we have a similar form of government, based on the Westminster model. They will get something in place even though it’s not there yet. I know the Germans are looking at this too, though they have no concrete plans for legalization yet. I really do think a lot of the world is waiting to see how Canada rolls this out. Then you’ll start to see more nations move along.
IB: What are your predictions for how that roll-out will happen in Canada? Any stumbling blocks?
IRV: I think there will be stumbling blocks – I just don’t have the foresight to necessarily see them! I think that’s only natural though. I think that everyone is trying to put their best foot forward to understand this the best we can. The government will try to get something in place by July, everything is going through our government process – but what everyone has to be aware of is that changes are going to be required. This is brand new territory for everybody. What I would like to see is flexibility for stakeholders to move to adapt to what this new reality is, once we start to see how it plays out in society.
I think in terms of demand there might be a shortage at first – there’ll be a spike and then the distribution system will iron out. It all depends on what the provinces have in place and how well they have that system mapped out … and I don’t think they’ll be 100% ready, I think it’s impossible for them to be. As we saw in California – we always use that model as a proxy for Canada because it’s roughly the same population size – there’ll be line-ups and shortages, but I think there’s a number of licensed producers in Canada whose expansion plans will help smooth it all out, and I think that will happen more quickly than people think.
Brokers already have a huge market on the medicinal side of cannabis, and they’re now going to see that transfer over to the recreational side if they’re going to be insuring producers.
IB: Would you say – what with the way the Canadian government controls alcohol distribution – that they’re inherently taking a more ‘careful’ approach with this than the US?
IRV: Health Canada has a long history of alcohol and tobacco awareness, so they will be applying the same kind of policies to cannabis. That will apply to how the branding happens. They need to find the right balance between promoting it as a lifestyle thing and not making it as rigid as tobacco as there is a medical component to it.
I think the government’s view has always been “we want to be a little more restrictive now because we can’t go backwards.” Officials in Canada have been talking to officials from all over the US and have learned that it’s very hard to implement something post-restrictive, once restrictions have been lifted. So, I think the view is that – based on lessons from the US – they can become less restrictive if needed, but it’s better to start more closed-off and open things up over time.
IB: Are there differences in ‘cannabis culture’ between the US and Canada in general – differences that brokers will have to uniquely research in Canada?
IRV: I think ‘cannabis culture’ is pretty much the same as in the US, as with our cousins in the UK. We’re very similar on that. There’s always going to be different nuances, but generally I think it’s the same.
To hear more, check out ‘Cannabis cover: current needs and future opportunities’ on February 08.
Related stories:
Time running out for cannabis markets to be ready for legalisation
Province reveals cannabis legislation
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