Canadian company to offer coverage for pot producers

Seizing upon what looks to be a definite growth industry, one man is stepping forward to be the first to offer liability insurance for producers of prescription pot.

Risk Management News

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Seizing upon what looks to be a definite growth industry, one man is stepping forward to be the first to offer liability insurance for producers of prescription pot.

“What we’re doing with Creative Edge Nutrition is specifically in the marijuana liability insurance and risk management area for North America, for licensed producers, dispensaries, grow facilities, and the prescribers,” says Bill Chaaban, CEO of Creative Edge. “Creative Edge Nutrition is now the first truly Canadian diversified marijuana company with four major divisions including insurance, marijuana, hemp and vitamin nutritional supplements.”

The biggest challenge is finding the right underwriting for what is not only a new product, and newly legal product.

“Our past experience has always shown that when you are dealing with alternative treatments, that being biomedical hormones,” says Edward J. Kuhn, an agent with Wellness Medical Protection Group/Liability Insurance Solutions, “hCG medical weight loss, botox aesthetics and injectables, that new alternative treatments come into the marketplace, there is a large degree of initial consultation in terms of liability and compliance of regulation and risk management.

“This is really no different. The Wellness Medical Protection Group specializes in the unique liability and risk management features, in particularly, the medical cannabis business.”

Kuhn says that it will take two or three years for claims to potentially develop to realize where the underwriting should truly be.

“Look at laser hair removal. It was introduced and now today it is being sold on a wide scale,” Kuhn told Insurance Business. “The claims developed and now burn claims that have caused permanent scarring have settled between $50,000 - $75,000 typically.” (continued.)
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It was back in June that Creative Edge Nutrition announced it was entering into a joint venture with RXNB Inc. to offer exclusive marijuana liabilities insurance for North America through the Wellness Medical Protection Group.

“Because each case is going to be different starting out, at some point there are going to be hundreds of these dispensaries, the coverage will become a little more uniform, and little more standard,” he says. “But that will come as claims develop – or don’t develop.”

Creative Edge Nutrition will have four major divisions including insurance, marijuana, hemp and vitamin nutritional supplements. The divisions will consist of:

- marijuana insurance division;
- marijuana production division of up to 1.3 Million lbs. (589,670 kilograms), with facilities ready for government inspection to sell first in Canada and later in America when laws ease;
- hemp production division through its subsidiary, Hemp Technologies in America, Canada and New Zealand to meet the needs of this $1 trillion global hemp market; and
- vitamin and nutritional supplements division.

“The high end of it will be the large growers, because of their exposure with the products liability and the transportation and the security,” he says, “The low end will be the small mom and pop type dispensaries. So you would be looking at a premium range of $5,000 to $100,000 a year – and that’s typical commercial insurance.”

The growth of the market should be considerable, says Kuhn.

“The premium potential in the next two to five years should be $5 million to $10 million,” he says, “and that might be woefully low.”

 

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