LEGAL FRAMEWORK

Adult-use cannabis will be legal in Canada as of October 17, 2018. Provinces will regulate age, distribution, public use, private culture and others.

FEDERAL LEGAL FRAMEWORK

Four sets of regulations enacted under the Cannabis Act, assented to June 21, 2018

  • Cannabis Act (Police Enforcement Regulation)
  • Industrial Hemp Regulations
  • Qualifications for Designation as Analyst Regulations (Cannabis)
  • Cannabis Regulations (to replace Access to Cannabis for Medical Purpose Regulations)

Key personnel of licensed producers will be required to hold a security clearance delivered by the RCMP and the appropriate ruling government body. Cannabis producers must obtain one of the following six classes of license and comply with the cannabis regulations:

  • Cultivation
  • Processing
  • Analytical testing
  • Cannabis drug license
  • Sale for medical purposes
  • Research

The regulation also establishes plain packaging labelling for all cannabis products.

IMPACT ON THE INSURANCE INDUSTRY

ANTICIPATED ISSUES FOR INSURERS

  • Legality across and between jurisdictions, especially outside Canada to be challenging (e.g. transport between US and Canada considering federal ban in the US).
  • Types of insurances that are most likely to be affected:

    • Home insurance: claim risk likely to be higher where private culture is authorized (fire, flooding...);
    • Motor vehicle insurance: accidents likely to be more frequent;
    • Health insurance: medical use of cannabis likely to be covered;
    • Life insurance: premium likely to increase for smokers.
  • Cannabis business insurance needs and claims to be mostly similar to any other businesses':

    • D&O insurance (e.g. Cronos Group class action lawsuits related to misleading public announcement regarding distribution agreement)

COMMERCIAL INSURANCE

  • The insurance needs of authorized producers will be similar to those of commercial greenhouses enterprises:

    • Commercial General liability
    • Operating and exploitation losses and additional expenses; Equipment and building coverage; Inventory insurance
    • Crime
    • Product liability and product recall, product liability for by-products sales
    • Cyber insurance
  • Cannabis dispensers and clubs are likely to be exposed to commercial host liability and will need products in the line of:

    • Civil, commercial liability and inventory insurance
    • Wrong labelling and product recalls

RECENT INSURANCE NEWS

  • HUB INTERNATIONAL launched cannabis insurance and risk services for the Canadian market, under Hub's agribusiness and farm specialty practice. Also available in the US. It provides medical and recreational cannabis producers, distributors and retailers with protection and specialized solutions to reduce risks in all aspects of their business.
  • LLOYD'S OF LONDON also announced that it will allow its member firms to underwrite cannabisrelated business in Canada if they meet local and international laws. Lloyd's did tell its managing agents to ensure that any cannabis risks have Canadian risk location only.
  • DESJARDINS INSURANCE AND SUN LIFE FINANCIAL have recently announced that they were adding medical cannabis coverage to there supplementary health care coverage for group insurance plans.

PROVINCIAL REGULATIONS*

Yukon
Minimal age :
19+
Distributed through:
Government stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Private property / at home
Personal Possession:
30g, no limits at home
Alberta
Minimal age :
18+
Distributed through:
Private stores / online stores
Grow limit:
4 plants per household (banned
outdoors)
Where to smoke:
Where tobacco is permitted
Personal Possession:
30g, no limits at home
British Colombia
Minimal age :
19+
Distributed through:
Private stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Where tobacco is permitted
Personal Possession:
30g, no limits at home
Northwest Territories
Minimal age :
19+
Distributed through:
Private stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Private property / at home
Personal Possession:
30g, no limits at home
Manitoba
Minimal age :
19+
Distributed through:
Private stores / online stores
Grow limit:
Not permitted
Where to smoke:
Private property / at home
Personal Possession:
30g, no limits at home
Ontario
Minimal age :
19+
Distributed through: Government
stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Private property / at home
Personal Possession:
30g, no limits at home
Newfoundland and Labrador
Minimal age :
19+
Distributed through: Government &
private stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Where tobacco is permitted
Personal Possession:
30g, no limits at home
Quebec
Minimal age :
18+*
Distributed through: Government
stores / online stores
Grow limit:
Not permitted
Where to smoke:
Where tobacco is permitted except on
university and other campuses
Personal Possession:
Up to 150g at home, 30g on a person
New Brunswick
Minimal age :
19+
Distributed through: Government
stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Where tobacco is permitted
Personal Possession:
30g, no limits at home (user required to
lock away marijuana when it's in their home)
Prince Edward Island
Minimal age :
19+
Distributed through: Government
stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Private property / at home
Personal Possession:
30g, no limits at home
Nova Scotia
Minimal age :
19+
Distributed through: Government
stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Where tobacco is permitted
Personal Possession:
30g, no limits at home
Nunavut
Minimal age :
19+
Distributed through: Government &
private stores / online stores
Grow limit:
Not permitted
Where to smoke:
Where tobacco is permitted
Personal Possession:
30g, no limits at home
Saskatchewan
Minimal age :
18+
Distributed through:
Private stores / online stores
Grow limit:
4 plants per household
Where to smoke:
Private property / at home
Personal Possession:
30g, no limits at home

*May be in conflict with federal law, judicial review upcoming.

*This information was taken out of CBA, Spring 2018 ed., available online http://www.nationalmagazine.ca/NationalMagazine/media/MediaLibrary/pdf/canada-s-pot-laws.pdf

*The government in place plan to change the laws established.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.