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Medical Cannabis Insurance Could be the Next Big Thing in Canada

By Ayanna Rutherford
May 31, 2018

Now cannabis companies are entering into the medical marijuana insurance business.  One company is Toronto based Starseed, who produces cannabis product. They are focusing on offering Canadians medical marijuana insurance through group policies.  Unlike other cannabis health insurance programs, Starseed wants to focus on groups instead of individuals exclusively. One group that they have focused on is the Laborer’s International Union of North America also known as LIUNA.

Group Plans Offer Opportunities

This partnership offers many opportunities.  One area is the size of the consumer population.  LIUNA is one of the largest construction unions in the country with over 120,000 members.  Another benefit of this relationship is that construction workers could use medical marijuana for treatment of pain which is an issue in this line of work.  Stephen Ng, the chief financial officer of Starseed, explained to Financial Post, that “[c]onstruction workers typically over-index towards chronic pain and injuries, so it was sort of right time, right place.”

The partnership between LIUNA and Starseed takes a different approach to medical marijuana insurance.  According to Business Insider “[r]ather than chasing individual medical patients, Starseed intends to partner with health-plan sponsors — unions and other large employers — to get preferential access to large groups of potential customers who have marijuana covered by their insurance plans.”

The partnership extends beyond insurance.  Financial Post reports that LIUNA’s pension plan is a “significant shareholder” in Starseed.

Germans Are Using Insurance For Medical Marijuana

Germans are also utilizing insurance coverage for medical marijuana at a rapid rate since becoming legal March of last year.  A study conducted by Techniker-Krankenkasse or TK, a German insurance company, and the University of Bremen found “that as of February nearly 16,000 patients nationwide had applied to be reimbursed for medical marijuana costs, compared to around 1,100 before the law came into effect” according to Business Insider.

Patients who submit paperwork for reimbursements must go through the insurance company’s review process for payment.  Part of that process includes justifying the health benefits and effectiveness of the treatment. While TK approved around two-thirds of medical marijuana reimbursement requests, the company is questioning whether cannabis is an effective treatment option which could be to limit reimbursement rates.  Currently, cannabis treatment is more costly than conventional medicine. That cost is "more than four times as much as alternatives in the form of drops or tablets” according to Business Insider.

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