Lloyd’s of London OKs Insuring Canadian Cannabis Companies
On many fronts, the cannabis industry is booming with record revenues and stock prices exceeding expectations. Of course, many serious issues remain, even for Canadian companies, where their home nation is about to legalize cannabis for all adults this October 17th, including the fact that some insurers still shy away from cannabis. However, cannabis companies received good news from the Lloyd’s of London, as the insurance market approved its members to take on Canadian industry clients, so long as they are complying with local and federal law, as Reuters reported:
Lloyd’s said in a notice to its 80-plus syndicate members that after taking legal advice, it was satisfied that providing insurance for cannabis in Canada would not breach the UK Proceeds of Crime Act.
“It is important that managing agents ensure that any cannabis risks have Canadian risk location only,” the notice said.
A Lloyd’s spokesman said by email that Lloyd’s “does not intend to prohibit syndicates…from underwriting cannabis- related business in Canada, provided that syndicates themselves ensure all of their activities meet local and international laws”.
While this is a positive step for cannabis businesses in the Great White North, a good development that will eventually filter throughout the international industry, Lloyd’s decision still shows that there is much more work to be done. Lloyd’s memo to its underwriters mandates that the companies only have Canadian locations, but what about nations that have legalized medical cannabis federally now or will soon end prohibition federally?
Lloyd’s has been known to be rather cutting edge, so we can expect it to adapt with the times. Hopefully, sooner than later, it won’t be a big deal when insurers or banks choose to do business with the cannabis industry. The way that the global momentum for legalization is picking up more and more steam, complete normalization is on the horizon.
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Canadian cannabis, cannabis industry, insurance, Lloyd's of London, UK Proceeds of Crime Act