In June 2018, the Cannabis Act finally passed the Senate and the House of Commons, paving the way for marijuana legalization in Canada. The date was quickly set. Cannabis would become legal for recreational use on October 17, 2018.
As Canadians and cannabis advocates celebrated, others were left with a number of pressing questions. Now that marijuana is legal, people are still looking for answers to those questions. One of the most pertinent has to be how marijuana legalization will affect businesses and different industries.
One of the industries most likely to be affected is the insurance sector. How will insurance companies cope with legalized cannabis, and what kinds of changes will they need to introduce to insurance policies across the country?
Homeowners Policies Will Need to Be Revised
One of the things under debate as the Cannabis Act was drafted and refined was the legal status of allowing people to “grow their own” cannabis in their homes. Some proponents wanted people to be able to cultivate their own cannabis plants, while others suggested a number of reasons home cultivation shouldn’t be allowed.
Home cultivation is allowed under the Cannabis Act, which means it falls to insurance companies to decide how a homeowner’s decision to grow cannabis could affect the value of the home and the coverage they receive.
Most policies are currently under review. Cultivating cannabis indoors can cause mould growth, as well as present a fire hazard if powerful lights are used to encourage growth. Cannabis also has a strong smell, so homes used for cultivation may develop an odour.
Smoking in a home also has to be considered. Smoke damage from cigarettes usually isn’t covered under insurance, and clauses in policies are being updated to include damage from cannabis smoke as well.
Driving under the Influence Has an Expanded Meaning
Auto insurance is another avenue being affected in the wake of marijuana legalization. Currently, most insurance companies are expanding their definition of driving under the influence or impaired driving.
There is a concern that people may choose to operate motorized vehicles while using cannabis. Cannabis can impair judgment, as well as affect alertness, concentration, and focus. Driving while using cannabis is never advisable.
Insurance companies are acting to limit their liability, which will hopefully discourage people from driving while under the influence of cannabis. Most provinces are also reviewing their laws on the topic.
Keeping the roads safe is paramount.
More Companies Consider Coverage for Medical Marijuana
Although medical marijuana has been legal in Canada for quite some time now, the legalization of recreational cannabis has spurred new interest from insurance companies.
In February 2018, Sun Life announced it would be adding coverage for medical cannabis to its policies. Eligible individuals can claim up to $6,000 each year for medical marijuana costs. Other insurance providers appear poised to follow suit.
The changing legal status of cannabis appears to have been key for insurance companies on this front. Medical cannabis is becoming more legitimate in many circles, but its complex legal status left many hesitant over its use.
More Changes to Come
There are likely other changes that legal marijuana will require from the insurance industry. One example might be business insurance policies for those involved in the cannabis industry. Life insurance policies, short-term disability, and even long-term disability coverage may also need some revisions as more information about cannabis use becomes available.
One thing is for sure. Marijuana legalization in Canada will usher in a number of sweeping changes, affecting a wide array of diverse industries.