The Changes in Cannabis Regs in Canada:
How Free Market Forces Will Now Drive Security
On January 25, 2018, the Government of Canada introduced two changes to security requirements under the existing ACMPRs. Licensed producers may now apply for an exemption license, and if approved, will be able to eliminate some physical security measures, like vaults and internal video surveillance.
Considering these new relaxed regulations begs the question, â€œIs the Canadian government recommending that an industry where a few hundred pounds of refined product may be worth tens of millions of dollars not be as concerned with its physical security?â€
We think not.
On the contrary, we believe that, in this transition to a legalized industry, the Canadian Government has acknowledged that certain aspects of how businesses proceed should be influenced more by free market forces, than by government regulation.
As with other legalized markets, we believe those free market forces, such as, general liability insurance requirements, and property and casualty insurance, will create the demand for vaults and other physical security solutions in an industry estimated to reach a hundred billion dollars annually.
Thus, cannabis producers will find themselves sharing business concerns with other legalized industries like banking, pharmaceuticals, retail jewelers, and vendors of precious metals. They will find that, despite relaxed government regulations, insurance underwriters will remain one of the primary drivers of specific security and vault requirements. Although not required by the government, proper securing of their assets will still be mandatory.
Whether you are in a legal and high-value property industry as a jeweler, a banker OR a cannabis producer in need of insurance coverage, one fact cannot be argued:
The higher the value, the higher the risk... the higher the security requirements.
So, while the Canadian cannabis industry will enjoy more freedom from government intervention as the door to the free market place is being opened, their assets still must be protected. Let us open the Vault Door for you, come on inâ€¦.