When cannabis was legalized in Canada in 2018, the industry entered the formal economy without one crucial advantage: data. Insurers are typically cautious, conservative entities, trained to evaluate risk based on mountains of historical claims information. But for cannabis, there was no actuarial record, no predictive benchmarks – just a patchwork of assumptions and cautious trial-and-error.
Seven years later, the picture has shifted considerably.
According to Kelli Hunt (pictured), executive vice president at CannGen Canada, the property side of cannabis insurance has come into much clearer focus.
“I think on the property side, we’ve got a pretty good idea,” she said, pointing out that many of the biggest risks align with what’s already familiar to Canadian underwriters: extreme weather events. “The biggest peril in Canadian insurance is pretty much the Canadian weather, which really has nothing to do with cannabis at all.”
Still, some risks are unique to the cannabis sector – especially when it comes to lighting. Fires sparked by grow light systems have become a consistent source of concern. “They will continue to be a problem... just by the inherent nature of what it is,” Hunt said.
Whether in Alberta or elsewhere, improperly managed lighting systems have led to catastrophic losses. The key to managing this risk lies in rigorous, top-tier risk management protocols, which Hunt said many producers have already implemented.
Early on, underwriters attempted to compare cannabis to other sectors – pharmaceuticals, liquor, agriculture – but quickly realized it was a category unto itself. “Cannabis was never going to fit into... a healthcare and life sciences box... or a liquor liability box. It’s really going to be its own beast,” Hunt said.
This uniqueness presents a challenge: unlike sectors that can pool together broad categories of risk data, cannabis businesses must stand on their own, Hunt said.
With more data emerging and risk practices improving, the cannabis sector is increasingly seen as legitimate and viable by insurers. But Hunt warned that businesses can’t afford to treat insurance as a passive formality. Instead, she urges operators and brokers to be proactive – and deeply personal – in how they present themselves to underwriters.
“I always tell people to tell their story,” she said.
Too often, insurers receive sterile applications that overlook the human side of the business. “Behind every cannabis application or business is a story... It’s usually a family-run business, a small business in a small community.”
This isn’t just feel-good advice. Hunt believes that better storytelling – through detailed submissions, broker engagement, and transparent communication – can materially impact underwriting outcomes.
“If you knew that somebody had put their entire life savings into this company and employs all their family and all their friends, wouldn’t you want to insure that a little bit more than a bank that has a big mortgage on it,” Hunt said.
Looking ahead, Hunt sees a cannabis insurance market that’s growing both in stability and competitiveness. Capacity is expanding. Reinsurers and carriers are no longer sitting on the sidelines. The sector has proven its credibility, both operationally and financially.
“I think the cannabis industry is going to become more mainstream, insurable, and they deserve that,” Hunt said. “They deserve to be... considered as the legitimate, billion-dollar business that they are.”
That recognition, however, doesn’t mean companies should take their insurability for granted. Strong risk management, clear documentation, and active partnerships with brokers and underwriters will remain critical for accessing favorable terms – especially as insurers begin to stratify the market between best-in-class operators and riskier outliers.
At its core, the story of cannabis insurance in Canada is one of self-made credibility, Hunt said. From zero data and systemic skepticism, she adds that the industry has built an insurable profile – based not on luck, but on transparency, collaboration, and tenacity. Insurers now have models. They have loss history. And most importantly, they have a clearer picture of who they're covering.
“There was a stigma about what the cannabis industry is... and it just proved not to be that at all,” Hunt said.
