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SA Hospitality Industry Take Note: Canna-Tourism the Next Big International Travel Thing

SA Hospitality Industry Take Note: Canna-Tourism the Next Big International Travel Thing

As the United States legalizes cannabis state-by-state, so other opportunities in the value chain emerge. The latest trend picking up is that of canna-tourism, and it’s finding a sweet spot in the millennial market, as this report from 420 Intel reveals.

402 Intel

16 September 2022 at 10:30:00

Cannabis tourism, or more colloquially, “cannatourism,” is a billion-dollar and counting industry that includes everything from cannabis lounges to posh winery-tour style getaways with 4-star meals and messages.

It’s a novel and unique industry with promise, and of a fair share of developing and yet to be fully understood risks and perils.

We covered the industry and where it’s going and the associated risks in the latest episode of our Insuring Cannabis podcast.

For that podcast we spoke with Georgi Bohrod Gordon, a principal with GBG & Associates, and membership chair of the Cannabis Travel Association, and Lee Woodruff, vice president of business development for Jencap, who is a specialized cannabis insurance broker.

Following are takeaways from that conversation.

Gordon describe the cannatourism universe as broad and unique. For those interested in more details on this emerging industry, the Cannabis Travel Association puts out an annual “State of Cannabis Travel” report with data on who partakes in this kind of travel, what the travel entails, and an array of data on these businesses and their practices.

It turns out that cannabis tourists are not much different from other mainstream tourists.

“They skew a little bit more to experiential travel and experiencing new cuisines. Of course, food is always important when it comes to cannabis. And they’re motivated to travel by wellness programs, lifestyle programs,” Gordon said.

“They’re also very environmentally conscious and they enjoy outdoor adventure, love music, of course, and they skew much higher in pet friendly. Their demographics are also like other travelers. There are a few more women than men, but it’s probably based on the number of who’s booking what, because women do make travel decisions.”

Millennials, of course, are the leading generation interested in this type of travel.

Gordon was asked what motivates people to try this type of travel.

“Cannabis enhances any travel experience or any experience for that matter. And as the acceptance of cannabis grows, cannabis travel will grow,” she said.

“But what’s interesting is that many people come into the cannabis consumer way of life through cannabis tourism because it’s the first time they experience enjoying cannabis on a trip or visiting an art museum or going out for kayaking.

So, they learn about cannabis when they’re not in their day-to-day life. And because of this, we’re seeing a growth in cannabis consumption and at the same time, cannabis tourism. So, there is big money in it and there will be bigger and bigger money in it.”

Woodruff has been specializing in helping to insure these canna-tourism undertakings. He expects this to be a bigger and bigger part of their business over there at Jencap, with events and consumption lounges starting off quicker.

And, for the more cultured affairs like stays at inns and winery-style experiences, Woodruff says he expects those to start becoming huge opportunities for insurers soon after.

“Right now, in the Midwest where I’m located, we’re seeing a lot of events,” Woodruff said, adding that the businesses of bed-and-breakfasts and hands-on tours of outdoor cultivation facilities are “areas that are going to start to explode over the next one to five years.”

These businesses are getting insurance primarily from the surplus lines industry, and the majority of the policies they’re buying are the same policies that any other business operation would have, according to Woodruff.

“There’s nothing really unique as far as the lines of business or anything,” he said. “It’s still your property, your GL, your product liability, your auto liability, those really common coverages.”

He added: “What’s unique about it is that there’s a limited number of carriers that are actually writing in that space. We’re a little bit at the mercy of their forms and their required exclusions on this industry.”

This has brokers doing the extra work of figuring out where there may be gaps and exclusions, and explaining them to the clients, or looking for ways to help those clients mitigate some of those risks.

Woodruff believes the business for them will eventually be “huge.”

“It’s hard to quantify exactly how many of these consumption lounges are going to be out there. If you look around in areas that have legalized marijuana both medically and adult use, you’ll see dispensaries all over the place,” he said.

“I think it’s only natural that the next phase is that there’s public places where people can go and enjoy the products that they’re purchasing at the dispensary.

I think that there’s also a big opportunity because a lot of the people that are purchasing and consuming marijuana products for maybe the first time, they maybe don’t feel great and comfortable to go out into a public setting and consume.”

As cannabis becomes more normalized and socially accepted, more people will want to go out and enjoy these products with friends in a public setting.

“More like going out to the bar and having a couple drinks, and then going home,” he added.

Report from 420 Intel.


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