September 12, 2019 by Greg Meckbach
Business clients in the cannabis industry are having a hard time finding some insurance coverages, A.M. Best Company Inc. warned in a report released Thursday.
“Coverage available to canna-business owners remains in short supply,” A.M. Best said in its annual Canadian Market segment report. “Cannabis continues to be an area of opportunity for carriers, though many remain hesitant to take on this burgeoning risk.”
The Oldwick, N.J.-based credit rating firm released its report in advance of its annual Canadian market briefing scheduled Sept. 13 at the Sheraton Centre in Toronto.
Federal legislation that took effect in October 2018 removed some criminal offences from the books, making it legal for people 18 and older to possess and share up to 30 grams of dried cannabis. The new law opened new opportunities for insurers, particularly when it comes to large-scale commercial operations involved in the manufacture and distribution of cannabis.
However, many insurers are reluctant to jump into the cannabis coverage market because they are unfamiliar with the risks, A.M. Best said in the report.
At the same time, companies involved in the business of either growing or dispensing cannabis are seeking more extensive coverage with higher limits and greater customization, observes A.M Best. “Business owners are finding it a challenge to obtain sufficient property, liability, and other [business owner policy]-related coverages to meet their needs.”