SPECIAL REPORT BUSINESS STRATEGY
5-STAR AWARDS: CANNABIS INSURANCE
REACHING HIGHER GROUND THE CANNABIS industry in Canada is growing up and gradually shedding stigmas. Back in 2018, when cannabis became legal across the country, the industry was a “baby,” says Kelli Hunt, vice-president of underwriting at Next Wave Insurance Canada. Road bumps, reorganizations and various amalgamations characterized this early stage, which was followed by the rise of micro and small business retailers, cultivators, and
“Insuring cannabis isn’t for the faint of heart. When the highs are high, it’s great, but when the losses happen, they are not small” Kelli Hunt, Next Wave Insurance Canada
WHAT’S MOST IMPORTANT TO BROKERS WHEN CHOOSING A CANNABIS POLICY? Policy coverage
100% Underwriting expertise
94% Claims/payment processing
88% Service to the broker
84% Ability to create bespoke policies
81% Policy pricing
72% Access to risk mitigation partners
63% Online platform
22% 0%
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processors. In 2019, the industry matured even further as ‘Cannabis 2.0’ launched edibles, beverages and other cannabis-infused products into the market. But all that change hasn’t happened without growing pains. “There has been a lot of criticism about the first few years, but I compare it to the restaurant world,” Hunt says. “Only 50% of restaurants survive their first year. Cannabis did better than that, and I think people forget that this is a new industry in the world that North America is leading. What happens in the rest of the world with cannabis will be because of the blood, sweat and tears of Canadians and Americans alike.” Midway through 2021, Hunt says, the Canadian cannabis industry is now in its “toddler phase.” Adult-use sales increased from around $1.2 billion in 2019 to $2.6 billion last year, and they’re on track to soar another 60% by the end of 2021, according to a recent report on the market from the Brightfield Group. That report credited retail openings and price cuts for driving growth and also noted a rise in US-Canadian partnerships.
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