Covering marijuana under insurance policies has always been a grey area for most carriers. Here’s a breakdown of the current scenario when it comes to medical marijuana coverage.
Cannabis, also known as Marijuana, is classified as a Schedule I, psychoactive drug. Often regarded as a ‘gateway drug’, its use, for a long time has been deemed illegal in most parts of the world. However, in recent years, Cannabis has become widely accepted, with countries like Canada and Uruguay legalizing Cannabis completely, and the United States legalizing it in 11 states for recreational purposes and decriminalizing it in 15 others.
With such developments in the production, sale, and purchase of cannabis, the impact can be seen across major industries, including health as well as insurance. With more and more states in the USA considering legalization, the question that emerges is how exactly are insurance companies developing their policies with respect to the use of cannabis among its policyholders.
Even though various states are pushing for legalizing cannabis for recreational as well as medical purposes, the federal government still classifies it as a Schedule I controlled substance, thereby maintaining its illegal status. With state and federal acts on cannabis at loggerheads, carriers view cannabis insurance as a ‘risky’ avenue.
A booming industry, cannabis revenue, according to sources is at an all-time high of $13.7 billion in 2019, and is expected to cross the $22 billion mark by 2022. With such an emerging market for cannabis, insurance carriers would certainly like to develop appropriate policies to insure production, distribution, and sale of cannabis. However, the state policies remaining unclear on the legality of the drug makes it difficult to do so.
While Federal law classifies cannabis as illegal, Food and Drug Administration(FDA) has not approved cannabis as safe and effective for medicinal purposes either. This makes for another challenge for insurers to come up with policies that may help insure potential clientele who are in the cannabis business. Insurance companies thus face a lot of hurdles due to the strict regulations in the cannabis business.
However, if insurance carriers can face these obstacles, they can surely expect large coverages that the cannabis industry has to offer. With the developments in government policies with respect to the legality of cannabis, the prospects for medical marijuana coverages still seems like a debatable issue.