In five to 10 years, annual cannabis sales in Canada will be anywhere from $5 billion to $10 billion.
In 2018, Canadian lawmakers legalised recreational marijuana. They were the first industrialised country in the world to do so. For this reason, Canada is creating the blueprint for future legalisation.
The market is expanding, but it’s new territory. Make sure you protect yourself and your business by selecting appropriate cannabis insurance.
What makes insuring a cannabis company different? Keep reading to learn more about the industry and arm yourself with the knowledge to combat the risks.
Risks Marijuana Companies Face
The legalisation of marijuana has long been a controversial topic. For this reason, liabilities for new cannabis-based businesses are high.
The industry is still fresh. No one quite understands the risks yet. So, selecting the right insurance products to minimise liabilities continues to be a challenge.
There are two main primary insurance risks associated with a cannabis-based business. These are product liability and the misinterpretation of current regulations.
Product Liability
Contamination is the cause of many marijuana recalls. It’s common to see issues relating to pathogenic moulds, fungus, and pesticides.
The fungus and mould can cause allergic symptoms, including sneezing, coughing, sneezing, runny nose, and itchy eyes.
In February, one company had to recall 2,180 units of product sold between December and January of 2019. This recall was due to CBD capsules and dried cannabis strains with incorrect labels.
Mislabeled products may cause unexpected effects produced by more significant quantities of THC.
Cannabis is a psychoactive drug, capable of causing personal injury and property damage. For these reasons, you must be careful when labelling cannabis products.
Without proper insurance, your company could face lost damages as a result of a massive product recall.
Misinterpretation of Regulations
There are several laws and regulations related to cannabis in Canada. These laws create a strict legal framework surrounding the sale and purchase of marijuana.
Most of these regulations include rules to protect youth and public health.
The Cannabis Act seeks to discourage youth from using cannabis. One way it does this is by banning cannabis packaging or labelling it in a way that makes it appealing to youth.
The act prohibits the promotion of marijuana altogether. In rare circumstances, it’s allowed in areas where those who are underage can't see the advertisement.
These laws are specific and tough to navigate. With such a new and evolving industry, it is easy for new business owners to make mistakes.
Finding Cannabis Insurance in Canada
Cannabis-based business is booming, but insurance options in Canada remain limited. Only a handful of companies offer insurance that will cover the various risks associated with a cannabis company.
When vetting potential insurers, choose a broker that understands the cannabis insurance ecosystem. Legal professionals who are comfortable with laws and regulations protect your operation.
While getting a new venture off the ground, it’s essential to put your energy towards your company. Search for insurance brokers that offer comprehensive solutions to protect your business. You want to maximise growth and profit while experts take care of the rest!
Finally, go for an insurance plan that protects your inventory, equipment, liability, and business income. In the unfortunate event of a loss, you should feel safe knowing you’ll be rerunning your business as usual.
We’ve Got Your Back
Whether you’re looking for a licensed dealer, marketing guru, or consultant, our team has you covered. When it comes to finding top-notch cannabis insurance, we can help you with that, too.
We’re committed to helping you thrive in this industry. Contact us with any questions and start building your flourishing business today!