High Times in the Maritimes.

It’s time to be blunt about the legalization of recreational cannabis.

October 17th, 2018 went down in history as perhaps one of the happiest hump days recorded. October 18th, when many shops ran out of supplies, perhaps the most historic downer. The legalisation of recreational cannabis use has been long anticipated, and insurance companies have been finding creative ways to be ready. With Canada being the first developed country to completely legalise the recreational use of cannabis at the national level, Canadian insurance companies were faced with the monumental task of being the first to draft rules and coverages that no other country has implemented (granted, these updates vary from province to province).

It’s an exciting time to be a part of the insurance community that’s leading the way in shaping policy wordings for this budding industry. Barinder Rasode, president and CEO of NICHE Canada, has applauded the insurance industry on being ahead of the game when it comes to legalisation, and suspects that a large part of the cannabis industry’s success in transitioning to legalisation will be as a result of the insurance industry’s preparedness¹. Cannabis and hemp have been untapped resources in Canada for far too long, and we are eager to see the domino effects of legalisation.

Once legalized, Canadians of legal age will be able to purchase, consume, and grow cannabis. The personal possession limit is approximately 30g of dried cannabis per person, and four plants per household². According to Stats Canada, our province is on the lower end of the spectrum when it comes to recreational cannabis use, sitting at 14%. This is low in comparison to Nova Scotia, which topped the list at 23%. Regardless of whether you find yourself in the 14%³, legalisation will bring about changes in everyone’s insurance policies.

On the property side, many companies are changing their wording to include special limits on cannabis-related losses. These limits are specific to each company and are often subject to a deductible. So if you plan on growing or possessing cannabis plants, be sure to take note of the following:

1. The special limits of insurance for cannabis related losses and whether or not this can be applied to plants in your possession (grown indoors vs. outdoors); and
2. The deductible to which this special limit is subject.

It is important to note that many “Outdoor Trees, Shrubs, Plants, and Lawns” coverage extensions have been updated to exclude outdoor cannabis plants. Also, depending on the type of property policy you have (homeowners vs. tenant’s, vs. condominium), coverages may vary drastically.

In terms of auto insurance, there has been no indication that legalisation will affect auto rates. Studies conducted in the United States recorded a 3% increase in accident claims after cannabis was legalised in Colorado and Washington⁴ , but also found that there was no increase in fatal crashes associated with legalisation⁵. That is not to say that driving while under the influence of cannabis should be seen as a low-level threat. The Federal government has introduced three new impaired driving conditions, and many insurance companies will rate drug-impaired convictions the same as they do alcohol-related convictions. On top of that, if it is found that the driver of a vehicle was under the influence of cannabis at the time an accident occurred, that is grounds for the insurance company to deny a claim, should one be opened.

Although common discourse surrounding cannabis use has often portrayed it as the “safer” inebriant when compared to excessive alcohol consumption or the recreational use of harder hitting drugs, it is important to remember that all impaired driving is regarded as equal. Please respect yourselves and others by not driving under the influence.

¹ Insurance Business Magazine: What will change after cannabis is legalized on October 17?
² Legalizing and strictly regulating cannabis: the facts
³ National Cannabis Survey, 3rd quarter 2018
⁴ Legalizing recreational marijuana is linked to increased crashes
⁵ Crash Fatality Rates After Recreational Marijuana Legalization in Washington and Colorado