Reinsurance

August 9, 2019

Marijuana and Legalization

History

The origins of marijuana date back to the Han dynasty in China when it was used mainly for medicinal purposes to treat inflammation, nausea and malaria. It was brought to the West by the Spanish in the late 1500s, first to Chile and then to North America, where it was grown and its hemp fiber used for rope, paper and clothing.

Even though marijuana has been in use for centuries, the controversy associated with the legality of its use and the stereotype of its consumer exist to the present day.  With the recent legalization of recreational and medicinal marijuana in Canada, the first G7 country to do so, there is an expectation that non-users will change their stereotypical views of users and there will be more acceptance of the drug.  Other countries, especially our southern neighbour, will watch Canada carefully to move towards legalization and the economic benefits that this emerging market will bring.

Legalization

There are now 11 states in the U.S. which have legalized marijuana for recreational use, while 33 states, 4 U.S. territories and D.C. have legalized it for medical purposes and others likely to follow in the future.  Colorado and Washington state were the first to legalize marijuana for recreational purposes in November 2012.  Although legal in these states, marijuana remains illegal under U.S. federal law and is considered a Schedule 1 drug which classifies it as having “no accepted medical use and a high potential for abuse”.  Due to this classification, there are many barriers to conducting clinical studies on the drug.

Pharmacology

In a little-studied field, the long term health and psychological effects of marijuana are not completely understood. Marijuana is made from the dried flowers and leaves of the cannabis plant, the least potent of the cannabis products.  It is usually smoked with or without tobacco or made into edible cookies, candies or brownies. Marijuana contains more than 460 active chemicals and 113 different cannabinoids (the group of active compounds found in marijuana). The two known cannabinoids are the primary active ingredient, delta-9 -tetrahydro-cannabinol, referred to as THC and the second most prevalent compound in marijuana, cannabidiol (CBD).  Most of the other compounds are not yet fully understood. THC is the part of the plant that produces the “high”.  CBD, on the other hand, by itself does not exhibit any dependence potential and is non-intoxicating.

Hashish is another product made from the resin of the marijuana plant, which is dried and pressed into blocks and then smoked. Hash oil is the most potent, containing high levels of THC, and is extracted from hashish to be smoked. 

Cannabis is the genus for the plant and is used in legal wording.  In this article, marijuana and cannabis will be used interchangeably to mean the same.

Uses and Effects of Marijuana

Medicinal marijuana is used to treat a variety of conditions including cancer, Alzheimer’s, epilepsy, glaucoma, autoimmune disease, schizophrenia, post-traumatic stress disorder, multiple sclerosis, nausea and pain; however there is no evidence of its therapeutic effects for many of these conditions.  Each U.S. state will have a list of qualifying conditions for medical marijuana which a licensed doctor in a legal state could prescribe.  The FDA and Health Canada have so far approved a couple of synthetic cannabinoid drugs.  Some insurance companies will only consider marijuana as medicinal if ingested, not smoked, but in reality, medicinal marijuana can be smoked, inhaled through a vaporizer, applied as a cream or oil or ingested.  Vaporizing may be a safer delivery method than smoking, as it may deliver fewer harmful components, but the hazards of acute intoxication and long-term effects on the brain remain uncertain.

According to a World Health Organization (WHO) study conducted in 2015, the known long term effects of regular non-medical cannabis use are:

  • Users can develop a dependence on the drug;
  • Withdrawal syndrome is well documented in cannabis dependence;
  • There is a consistent dose-response relationship between cannabis use in adolescence and the risk of developing psychotic symptoms or schizophrenia;
  • Daily use in adolescence is associated with cognitive impairment;
  • Increased risk of using other illicit drugs;
  • Increased risk of depressive symptoms;
  • Increased rates of suicidal ideation and behaviour.

WHO also lists the conditions that may result from regular cannabis use but remain to be determined:

  • Symptoms of chronic and acute bronchitis as well as microscopic injury to bronchial lining cells;
  • Long term heavy cannabis smoking can potentially trigger myocardial infarctions and strokes in young users;
  • Smoking a mix of cannabis and tobacco may increase the risk of cancer and other respiratory diseases, but remains to be proven whether cannabis smokers have a higher risk than that of tobacco smokers;
  • Testicular cancer may be linked to cannabis smoking.

Life Insurance and Marijuana Use

How does this most widely used substance of abuse affect obtaining life insurance? The life insurance industry has always considered personal marijuana users as possible insurable candidates, whether recreational or medicinal. Since legalization in Canada, insurance companies are even offering non-tobacco rates for the qualified applicant.  The underwriting assessment is based on the frequency of use, the THC concentration, how it’s used and purpose, if for medicinal use. Also, important consideration is placed on associated avocation or aviation activity, driving history, use of other recreational drugs, any alcohol or lifestyle concerns, any psychiatric disorder and other medical impairments and, if applicable, the underlying condition that marijuana is used to treat.  Testing for the presence of marijuana is usually through urine but can also be done with blood, oral fluid and hair testing.  On cases of medical marijuana use, a physician’s report is a must.  Underwriters should be aware of the adverse health effects of marijuana mainly on the cardiovascular and psychiatric system. Most concerning is the adolescent use where the impact is on developmental and social issues.  Users in the age group under age 25 are usually not ideal candidates for life insurance. Underwriting guidelines will change as new research and development arise.

Going Forward

There is much to learn from the Colorado experience as they have had several years of legalization. Although these findings are based on the general population, the insurance industry could benefit from the trends and behaviour seen. Revenue certainly increased from the sale of marijuana but so did the number of emergency calls related to marijuana and the number of children hospitalized for marijuana poisoning from the edible products.  There is also a slight increase in marijuana-related DUIs, vehicle fatalities and elderly marijuana users.  Youth users did not increase and opioid use has fallen as users switched to marijuana.  Note that there is no test to detect if someone is driving under the influence of marijuana but law enforcement in Colorado have observed that short-term memory loss is a common finding to determine impairment.  The black market still exists as marijuana is transported to non-legalized states.

It is hoped that legalization will not only control the distribution and production of cannabis, set possession limits, restrict youth from accessing cannabis, regulate packaging to decrease appeal to youth and weaken the black market for the product but also promote more future research in the interest of public health.  Laws and regulations will continue to change and develop and the life insurance industry will follow suit with their guidelines while continuing to have a guarded approach to marijuana use.