Cannabis is a rapidly growing industry and manufacturing and selling the substance for recreational purposes — in all forms — has been legal since last October. But because of government-mandated insurance requirements it has proved challenging for Canadian cannabis businesses to find the insurance coverage they need.

The cannabis sector is not new in Canada, after all the substance has been legal for medical purposes since 2001. And in many ways, that paved the way for recreational cannabis insurance products. But what is new is the manufacturing, distribution and retail of recreational cannabis.

While the federal government wrote cannabis laws and regulations, it gave provinces and territories the authority to decide how the product is sold, including where stores can be located, how they are operated, who is allowed to sell cannabis — and how much insurance businesses have to carry.

For the cannabis sector, manufacturers and retailers alike, procuring insurance is still a challenge. An added complexity was the legalization of edible cannabis products in the fall of 2019. Edible cannabis can include adding the substance to a variety of products ranging from beverages to cosmetic products, creating larger risk exposures and adding to the wide variety of risks businesses operating in the sector already have to contend with.

In Ontario, the provincial government imposed legal requirements for recall limits of $15 million. Required minimum commercial general liability for retailers is also costly. These requirements can pose a struggle for brokers to place insurance for their clients as the product and its availability is still maturing in the Canadian insurance market.

As the insurance industry catches up with the need for cannabis insurance, many brokers are looking to specialty markets to find solutions to their cannabis clients’ insurance needs. At CHES Special Risk, underwriters help support brokers and work collaboratively to identify unique risk exposures and engage insurance carriers to find inspired solutions to the complex insurance needs of the cannabis sector.

To find out more about our bespoke insurance coverages and how a CHES Special Risk policy can better respond to your clients needs, please speak to your CHES underwriter or email us at