Clearing The Smoke: Ambiguous Marijuana Exclusions In Insurance Policies

In Busato case (2025 BCCA 79), the British Columbia Court of Appeal considered the applicability of an exclusion clause in a homeowner's insurance policy concerning marijuana cultivation. The case centered on whether coverage for a total loss fire claim could be denied based on the exclusion's wording and its application to legal, licensed medical marijuana cultivation.

Background

The Appellant, a licensed medical marijuana user, suffered from chronic pain following multiple surgeries between 2006 and 2013. In June 2013, he obtained a Health Canada license permitting him to cultivate up to 73 marijuana plants for personal medical use. This license was renewed and remained active "until the court orders otherwise".