Cannabis is a unique product to insure because it straddles both the recreational and therapeutic markets.
With cannabis legalization just around the corner, discussion among the Canadian insurance industry is primarily focused on legislation, liability and the drug’s complex insurance coverage demands. A lot of debate has revolved around the legalization of recreational-use marijuana and how this will affect Canadian society. But what’s going to happen to the medical market?
“Of course, there is going to be huge interest on the recreational side of things,” said Ivan Ross Vrana, senior account director at HKS Strategies. “But that is likely to calm down and open up opportunities to focus on research and development (R&D) around cannabis’s health benefits and how it can be used for medical purposes.
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“A lot of people think the medical cannabis market could struggle once recreational-use is legalized. However, many companies are starting to think about the therapeutic benefits of cannabis and how it might be used as an alternative to traditional pharmaceuticals. I think the medical cannabis market can survive and can be a robust market.”
The possibility for R&D in the cannabis industry is “very exciting” but it will require a “large concerted effort” from interested companies, according to Vrana.
“Can we dispel some of the myths about cannabis?” he asked. “I think there’s tremendous R&D in this whole area and the potential for many alternative therapeutic products.”
Despite being optimistic about the future of the medical cannabis market, Vrana admitted it could be “a bit of a rocky ride” so start off with. The overall cannabis market is likely to be large as many producers have had ample time to plan and prepare for legalization. The size of the market could apply pressure on price of the drug.
The insurance industry will also have to consider the issue of people using medical and recreational cannabis together. There needs to be a widespread “educational campaign” to teach people about the “therapeutic benefits” of cannabis and the possible interactions the drug might have with other medication, according to Vrana.
“Like anything, cannabis can be abused and I do worry about that. It could provide therapeutic health benefits but there could also be negative health connotations. It’s all in moderation,” said Vrana.
Hear more from Ivan Ross Vrana at the upcoming Cannabis Cover Masterclass, which is taking place on October 10, 2017 in Toronto at the St. Andrew’s Club & Conference Centre. The event will feature a host of leading insurance influencers from the likes of Next Wave, CUBIC Health, and HKS Strategies, bringing together key perspectives on regulation, cannabis-specific risk, business growth and how legalization could affect the insurance market. Visit cannabiscover.ca for a full list of speakers, the full agenda and to register for the event.
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