Cannabis use can carry a variety of benefits and risks for recreational consumers, patients, doctors and businesses. And where there is risk, there is often liability and insurance. But acquiring insurance for cannabis prescriptions, sales and other activities can be tricky because it remains a federally illegal substance under the Controlled Substances Act (CSA), which classifies it as a Schedule I drug.
INSURANCE FOR PATIENTS
No cannabis products are covered by health insurance, and insurers likely won’t fill this role until the substance is reclassified. Some insurers do cover legal alternatives like the synthetic THC Marinol. As High Times reported, some states are easing the costs of doctor visits that involve medical marijuana certification or reducing some of the fees for getting a medical card.
In New York state, a bill currently in committee would require publicly funded health programs to treat medical cannabis like any other legal prescription drug for coverage purposes. “Patients should not be deprived of their medicine due to high costs and lack of coverage, while other conventional medications are covered by most public health insurance programs,” the advocacy group NORML stated in support of the measure.
INSURANCE FOR DOCTORS
Do doctors who prescribe cannabis or treat patients who take cannabis need specialized insurance protections? Ian Stewart, a partner in Wilson Elser and chair of the law firm’s cannabis law practice team, discussed this question with Insurance Journal.
“I think if you were to ask, you know, just an emergency room physician, for example, five years ago whether or not he or she needed separate coverage for cannabis-related wrongful acts or risks, the answer would be probably not,” he said. But, he said, these days, especially in places like California, where cannabis is fully legal, physicians are seeing more people take medicinal or recreational cannabis. “We’re seeing more and more issues of interactions... it can be really difficult for physicians now to tread those waters, get informed consent, adequately advise their patients, and in some cases even offer CBD or marijuana instead of opiates, for example,” Stewart said. He mentioned “cannabis hyperemesis syndrome” as another issue for doctors. This is a state of illness and nausea that can come from heavy cannabis use, and it is unfamiliar to some physicians.
Stewart sees a “really strong need” for specialty insurance for medical professionals as well as businesses.
INSURANCE FOR BUSINESSES
Cannabis businesses face many risks -- according to the National Association of Insurance Commissioners, some of the biggest involve “theft, general liability and product liability.” Selling cannabis-infused products like edibles can increase issues like mislabelling, liability or safety recalls.
Federal law prevents many cannabis businesses from accessing banking services and full insurance coverage. Golden Bear Insurance Co. in California represents an exception -- in 2018, it was approved to lower insurance rates, improve coverage and offer services to more cannabis businesses.
Stewart recommended people who want to learn more about this topic check out the National Cannabis Industry Association or, in California, the California Cannabis Industry Association. “Those are both good organizations for all sorts of professionals – lawyers, accountants, other consultants, brokers – to join and really educate themselves about what’s happening at the ground level with licensed operators.”