Alberta’s legislative framework, and the Federal Government’s Bill C-45, the “Cannabis Act” concerns the legalized recreational use of cannabis and how it will affect businesses and the economy.

Bill C-45 is accompanied by Bill C-46, An Act to amend the Criminal Code (offences relating to conveyances) and to make consequential amendments to other Acts, which sets out three new drug-impaired driving offences as follows:

Having a THC level between 2 and 5 ng, punishable by a fine of up to $1,000;
Having a level above 5 ng, punishable by a fine of $1,000 for a first offence and escalating penalties for repeat offenders;
Having a blood alcohol concentration of 50 milligrams per 100 mL of blood in addition to a THC level superior to 2.5 ng, with the same penalties as the previous offence.

Bill C-46 would amend section 253 of the Criminal Code by adding the above-blood drug concentration limits. While perhaps its most obvious potential impact is on motor vehicle claims, the legalization of recreational marijuana has the potential to also affect life and health insurance, commercial general liability insurance (for Licensed Producers), and property insurance.

The Homeowners’ Policies

With the Cannabis Act allowing individuals to grow up to four cannabis plants in their home, insurers will need to consider how to treat theft or damage claims with respect to marijuana plants.

Should theft of marijuana plants be considered part of the policy? Are they personal property of part of the landscape? And is this “usual to the ownership or maintenance of a dwelling”? What about the increased risk of fire or environmental damage due to a “grow” situation?

With Canada’s new legalized cannabis framework, the presence of marijuana plants in a household may very well be considered “usual to the ownership of a dwelling”, or such other analogous wording that can be found in homeowners’ policies.

Cannabis Impairment and Automobile Insurance

One of the main concerns about the impact of legalizing cannabis on motor vehicle accidents and motor vehicle accident claims is that a definitive, uniform method of testing cannabis impairment has not yet been developed. Driving while impaired by drugs is treated the same as driving while impaired by alcohol, for criminal law purposes and insurance purposes, but the effect that drivers impaired by cannabis will have on the frequency of accident claims, or how they are handled, remains unclear.

Note that individuals authorized by Health Canada to use medical marijuana do not have a duty to inform their insurer that they are using it, as it is treated the same as other prescribed medication. Bill C-46’s creation of three separate offences dealing with varying amounts of drugs, or drugs and alcohol, in a person’s system that are to be added to section 253 of the Criminal Code will presumably also trigger an exclusion under Section C of the Standard Automobile Policy.

The New Landscape of Legalized Cannabis

This kind of uncertainty highlights how insurers will need to reassess and perhaps revisit the coverage and exclusion clauses of their policies that may be impacted by the legalization of recreational cannabis. It is likely that there will be an increase in litigation over coverage issues when it comes to how legal marijuana is to be handled across the many different insurance sectors.

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