Insurance industry changes ahead with legalized marijuana
There will be a number of differences on their way, and within more than one sector.
From the moment that marijuana was legalized in the United States, some of the largest cannabis derived food and drug developers saw their shares skyrocket, as other sectors, such as the insurance industry, began a notable transformation in several directions.
This legislation affects policies, companies providing related services, and even equipment producers.
What had previously been an environment that was completely in the black market has now emerged to implicate everything from the insurance industry to regulations, developers of products based on cannabis, and even those supplying everything from grow lights to dispensing machines. In January, alone, many of these companies have seen an explosive growth, among which quadrupling of share prices was not entirely uncommon.
There have been two primary impacts on the insurance industry from the legalization of marijuana.
Two of the greatest impacts of this legislation are in commercial insurance and health insurance. In the former of those two sectors, a new form of specialty coverage has now emerged. The reason is that the legalization of marijuana has brought with it a number of different niche markets which each require their own forms of coverage and protection. Entire new companies have been formed in order to provide the range of specialty commercial insurance products that are needed in this area.
Similarly, it is certain that the health insurance industry will be affected by this new trend. While some have indicated that there could be an increasing need for rehab following marijuana addiction – as has been the case with alcohol abuse – it is not yet known how the marijuana statistics will move in that area. Furthermore, prescriptions of the substance have the potential to generate an entirely new drug plan cost for insurers.
These changes to the insurance industry from the legalization of marijuana are only the start of what will likely be a growing wave of shifts that will be experienced as time passes. In a sector that is already undergoing massive changes as a result of the health care reform, this is yet another area that will be sure to keep insurers, policyholders, and investors on their toes.