Cannabis investors have been focused largely on the recreational market with the legalization of adult-use cannabis last year, but a growing body of research suggests that medical cannabis remains a compelling long-term opportunity. The biggest question mark has been surrounding insurance coverage, which could prove to be a game-changer by making medical cannabis a lot more affordable to a much wider patient population.
FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FFT: 0K9) has recognized these trends and recently hired an insurance expert to plan out its approach ahead of its sales license that’s expected later this year.
Canada’s Health Insurance Market
Canada has a public healthcare system that provides preventative care and medical treatment from primary care physicians along with access to hospitals and other medical services. While some prescription medications are available through public programs, most Canadians pay out of pocket or use private health insurance. Roughly two-thirds of Canadians have some kind of private health insurance for this reason.
Most private insurance companies don’t cover medical cannabis outright because it doesn’t have a Drug Identification Number, or DIN, which means that it’s not a fully-approved medicine. While they don’t provide outright coverage, many insurance companies do offer Health Care Spending Accounts, where money is set aside to cover expenses. The downside is that only a small minority of the population maintains these types of accounts.
The good news is that these trends are starting to change. For example, Sun Life Assurance Co., a major Canadian health insurance company, recently announced that it would add medical cannabis to its group benefits plan last year. The yearly maximums for the coverage will range from $1,500 to $6,000 with eligible symptoms that include cancer, multiple sclerosis, rheumatoid arthritis, HIV/AIDS, and palliative care.
FSD Pharma Targets Insurance Markets
FSD Pharma recently signed a consulting agreement with Joseph L. Romano, a well-respected lawyer with a strong track record in personal injury law where he has been assisting people with using medical cannabis to cope with pain. Under the terms of the agreement, Mr. Romano will provide consulting on the inner workings of third party actions, WSIB claim handling, first party coverage, and no fault benefits across Canada.
“We are very excited to engage Mr. Romano in advance of our anticipated sales license,” said FSD Pharma Executive Chairman and Interim CEO in the press release announcing the deal. “This is a very timely and important agreement for FSD Pharma to maximize the opportunities in the Canadian market for our products and fits well with our strategy of establishing the company as a leader in medical cannabis.”
As the company moves closer to obtaining a sales license, health insurance expertise could become invaluable in creating potential end markets. The company’s massive ~3.4 million sq. ft. former Kraft Foods facility is well positioned to not only enable significant cannabis cultivation levels, but also house processing, manufacturing, extraction, and research and development facilities to build incremental shareholder value.
FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FFT: 0K9) recently hired a health insurance expert to help it navigate insurance coverage issues for medical cannabis patients. As Canada’s policies continue to evolve, these insurance coverages could play a big role in making medical cannabis more affordable to patients in need, and accelerating the growth of the industry as it works to address underserved medical needs.
For more information, visit the company’s website at www.fsdpharma.com.