Marijuana and insurance

Since many countries, South Africa included (through the Cannabis for Private Purposes Bill), decriminalised the private use and growing of cannabis, its recreational use is increasing.

Cannabis can be consumed in many ways – smoking, vaping, ingesting or through the skin. This means the number of products that can be made with it are bountiful. From lotions, chocolates, beverages, bath salts, lotions, “weed” tampons to dog treats with full legislation, many expect recreational use to grow phenomenally.

But how will this affect the SA insurance industry? Will this trend increase even further once the law comes into effect? Before we answer those questions let’s look at some of the facts.

Tetrahydrocannabinol (THC) and cannabidiol (CBD) are the two primary cannabinoids that occur naturally in the cannabis plant. Both substances interact with the cannabinoid receptors found in the human body and brain, but they differ dramatically in their effects.

CBD is non-psychoactive which means it will not get the user “high” whereas THC is the exact opposite. The effects of THC include relaxation, altered senses of sight, smell and hearing, fatigue, hunger and reduced aggression.

Evidence is still inconclusive regarding the health risks and potential benefits of smoking marijuana.

On one hand, no deaths have been reported due to acute marijuana poisoning, and no studies have clearly documented increased mortality from its use.

On the other hand, there’s no consensus among qualified experts that marijuana is safe and effective for use in treating a specific, recognised disorder. Further studies will be necessary to reach a definitive conclusion on the longterm health and mortality impacts of marijuana consumption.

The insurance industry must carefully consider the underwriting implications of more widespread marijuana use.

The key underwriting considerations will include the frequency, purpose, and admission of use, as well as the type of marijuana used, the applicant’s age, history of accidents, risky behaviour and other substance abuse.

Given the many different forms of marijuana (vaporisers, oils and ingestibles, etc), an underwriter needs to be able to quantify not only the dosage, but the strength of the substance involved.