marijuana closeup
Regulatory Compliance and Financial Stability

Marijuana in Canada:
Legalization & the Insurance Industry



Emma Amaral, Tom Jones, Chris Tomalty-Moeller, Cameron Torrens, & Laura Wickware

The Global Risk Observatory (GRO) is a student organization affiliated with the Master of Global Affairs Students’ Association at the Munk School of Global Affairs and Public Policy at the University of Toronto. This is a student organization that monitors risk, traditional and non-traditional, whether it affects the public sector, private sector, or civil society.

This organization is not affiliated with the Global Risk Institute. The authors are independent contributors to the Global Risk Institute and are solely responsible for the content of this article.

Executive Summary

The following risk brief will elaborate and analyze the threats and opportunities to the insurance industry that arise from the legalization of cannabis in Canada once legalization is finalized. The risk brief is outlined as follows:



The legalization of cannabis possession and production creates a sudden change in the risk environment for insurance firms, one which is problematic for lack of reliable actuarial data.

Insurers will have to adapt their models in order to optimize their coverage of risks particular to cannabis and claims that might not have been paid out previously due to cannabis-related ineligibility.


Popular opinions surrounding cannabis create risks for insurers who might face reputational problems in the eyes of some customers.

Legalization impacts a broad array of insurance products and insurers.

Key Stakeholders: licensed producers, dispensaries and cannabis clubs, auto insurance companies, home insurance companies, health/life insurance companies.


Based on the GRO intensity scale outlined in our methodology document, we describe and prioritize scenarios into first, second, and third order events.

Risk Management

Firms should be constantly working with their lawyers to ensure compliance with the new regime.

Firms should iterate coverage options as they work to comply with the law despite the lack of actuarial data.

Insurance companies should try to integrate cannabis coverage into their regular insurance products.



Marijuana production was a significant but previously uninsurable activity, and the ability of a market player to gain a first-mover advantage could enhance its position in the marketplace overall. Any strategy to capitalize on this opportunity, however, should be conservative and fully realize the risk and uncertainty that is inextricable from the issue.

Download the PDF of this Risk Brief published by Global Risk Observatory.

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Global Risk Observatory

The Global Risk Observatory (GRO) monitors traditional and non-traditional risks to the public sector, private sector, and civil society. We bridge the gap between social scientific and quantitative modelling and aspire to change the conversation around risk governance. Our products include comprehensive risk briefs, enhanced risk perception data analytics, op-eds, and industry outreach assignments.