It is impossible to predict what impact the legalization of recreational-use cannabis will have on Canadian society - there are far too many unknown entities and legal frameworks that need to be ironed out before the planned legalization in July 2018.
However, what is certain is that authorization of recreational-use cannabis will create huge opportunities for growth in the cannabis market. As the cannabis industry expands, so will its complex insurance coverage demands. But how can the industry prepare for such an unknown entity?
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The first step to tackling this new challenge in the insurance industry is learning how to talk about cannabis, according to Scott Campbell of Cubic Health.
“We need to learn the product,” he said. “There has been very little education about cannabis and slim to no general knowledge around the topic. For recreational-use cannabis to be legalized, there’s going to have to be a huge general education program across the country.”
So, what key terminology defines the cannabis industry? Brokers and insurers need to be thinking about variability in strains and dosages, according to Campbell. Different levels of tetrahydrocannabinol (THC) and cannabidiol (CBD) affect people in different ways and could affect responses to medical cannabis once recreational-use is widely legalized. This could impact on people’s behaviour in the workplace and in public, and could lead to new risks and liability frameworks.
It is also important to consider the supply chain and distribution route of recreational cannabis and how it might affect the medical cannabis market. Medical suppliers might move into the recreational market if the price and legislative framework is more attractive, which could create issues. On top of that, Canada already has a thriving black market and recreational users may continue to use these illegal supply chains if they feel priced out of the legal market.
“People don’t really understand how recreational and medical cannabis interact, or how cannabis interacts with other drugs,” said Campbell. He described this as an area that needs “a lot more education” before legalization.
Campbell added: “It’s going to be tough for brokers and insurers because there has never been a product enter the market with such wide-spanning and complex variables as both recreational and medical cannabis. Brokers should use their resources to stay as well educated on the topic as possible. It is also useful to look at the challenges and successes we have seen in the US and learn from them.”
Hear more from Scott Campbell at the upcoming Cannabis Cover Masterclass, which is taking place on October 10, 2017 in Toronto at the St. Andrew’s Club & Conference Centre. The event will feature a host of leading insurance influencers from the likes of Next Wave, CUBIC Health, and HKS Strategies, bringing together key perspectives on regulation, cannabis-specific risk, business growth and how legalization could affect the insurance market. Visit cannabiscover.ca for a full list of speakers, the full agenda and to register for the event.
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