In October 2018, Canada became the second country in the world to legalize the sale, possession and use of cannabis for non-medical purposes by adults. In your opinion, did the passage of Bill C-45, the Cannabis Act, have a decisive impact on Canadians’ usage habits?
According to a survey conducted by Statistics Canada, between 2018 (before legalization) and 2019, cannabis use increased, especially among people aged 25 and over (from 13.1% to 15.5%) and among men (from 17.5% to 20.3%). The corresponding rates among young people aged 15 to 24 (from 27.6% to 26.4%) and among women (from 12.3% to 13.4%) remained constant, while those among young people aged 15 to 17 went down (19.8% to 10.4%).*
In light of these findings, Assurances Multi-Risques wanted to inform you of the impact that cannabis possession and use can have on your homeowner’s insurance!
Summary of legislation
Before getting to the heart of the matter, here’s a brief reminder of what’s allowed and not allowed with respect to the sale, possession and use of marijuana in Quebec:
Sale of cannabis
Only the Société québécoise du Cannabis (SQDC) can engage in the retail sale of cannabis in Quebec, and only the following products can be sold: fresh and dried cannabis, cannabis oil.
Cannabis used for medical purposes
The sale and distribution of cannabis for medical purposes is still the responsibility of the federal government. A person using cannabis for medical purposes must have a medical document authorizing such use, and they can possess the lesser of a 30-day supply or 150 grams.
It is strictly prohibited to grow cannabis for personal use or to own a cannabis plant.
– Possession of cannabis is completely prohibited.
– 30 g in a public place
– 150 g in a private place such as your residence (150 g are allowed, regardless of the number of adults living there).
In addition, the possession or use of cannabis around certain areas is prohibited (schools, childcare centres, playgrounds) and in closed public places (as for tobacco products).
How does insurance come into the picture?
It was inevitable that the 2018 law would impact the general insurance industry—in fact, home, automobile and business insurance, as well as the liability of the insured, were all affected by this change. Why? Because the possession and use of cannabis constitute an additional risk for insurance companies.
As part of their work, insurance companies try to quantify, to the best of their ability, the risk they are prepared to take on in order to determine what premiums to charge clients. The sum of all policyholders’ premiums is used to pay out to clients for claims when an insured event occurs.
Therefore, additional risk (fire, theft, vandalism, etc.) means higher premiums.
Is cannabis considered insurable property?
Because adults can now possess up to 150 grams of cannabis at their home, of which the value can be as much as $1,000, cannabis is considered a movable asset, in the same way as its accessories are.
Therefore, the limits included in a homeowner’s insurance policy apply to this property, and any exclusions, such as the use of the premises, vandalism and illegally acquired or held property, will also continue to apply, in accordance with the Government of Quebec’s legal framework concerning the possession and cultivation of cannabis.
Conclusion: to receive compensation, you must comply with the law!
For example, if you possess more than the 150 grams of cannabis allowed by the law and your house burns to the ground in a fire, you won’t be reimbursed by your insurance. You’ll lose EVERYTHING!
If, on the other hand, you possess 130 grams at the time of the fire, you will receive compensation under the terms of your insurance policy and the estimated value of your cannabis will also be reimbursed.
However, it’s important to remember that the Cannabis Act is very recent in Canada and it is still uncharted territory for insurance companies. You may hear different interpretations from one company to the next. Our advice is to contact your insurance broker, because they are in the best position to advise you in this regard. Don’t hesitate!
*Source: Statistics Canada