Canada’s commercial marijuana insurance market gets big backers

Two multinational insurance companies have given the green light to underwriting cannabis-related businesses in Canada, allowing companies in the burgeoning sector to grow their operations while reducing risks and liabilities.

Lloyd’s of London and Hub International both announced plans to enter the cannabis industry in Canada.

In a bulletin, Lloyd’s said it would offer insurance to cannabis-related businesses in Canada, subject to compliance with the provisions of the Cannabis Act.

Recreational marijuana becomes legal in Canada on Oct. 17, opening the door to a multibillion-dollar industry.

“It is anticipated that this legalization of cannabis-related activities will give rise to new opportunities for insurers considering writing related risks,” Lloyd’s said in the bulletin.

“Lloyd’s is satisfied that, if properly done, Lloyd’s underwriters are well positioned to write Canadian cannabis business subject to compliance with local Canadian requirement.”

The new guidance applies only to Canadian cannabis companies.

Lloyd’s announcement came two weeks after Hub International – a global insurance brokerage based in Chicago – launched cannabis insurance and risk services for medical and recreational cannabis producers, distributors and retailers.

Hub’s insurance products will provide “proper protection and specialized solutions to reduce risks in all aspects of their operations,” according to a news release.

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