This is a follow up to my article, "Marijuana and Colorado, a Doctor's Perspective". The venture capitalists are moving in. This was inevitable, as I talked about it in my article. It has become difficult for any investor to ignore the glaring reality of an American "Medical Cannabis economic boom" coming sooner than most are ready for. Start paying attention.
The latest on Novus from Venture 17 and The Trinity Venture Capital Group. Read on.
Novus (NDEV) Aims to Fill Key Void in Cannabis Industry
The U.S. legal cannabis industry is expected to reach $2.34 billion in size by the end of the year, according to ArcView Market Research. With additional states expected to legalize the drug over the next five years, the same group believes that the U.S. industry could reach $10.2 billion in size by 2018. These growth rates have attracted both investors and lawmakers interested in shoring up tax revenue.
Despite these gains, cannabis continues to be classified by the federal government as a Schedule I Controlled Substance alongside drugs like heroin and cocaine. Conflicting federal and state laws surrounding the burgeoning industry have been a source of widespread confusion, which has led many insurance companies to refuse coverage for medical marijuana treatments for patients in need.
In this article, we'll take a look at a company that aims to change those dynamics by introducing a health insurance program geared towards medical marijuana patients.
Lack of Insurance
Medical marijuana has been shown to be effective in treating a wide variety of different medical conditions, including pain, nausea, and appetite. In addition to these conditions, companies like GW Pharmaceuticals plc (GWPH) are extensively studying the drug for its potential use in treating major conditions like childhood epilepsy, Crohn's disease, and certain types of cancer.
Since many health insurance companies work with federal programs like Medicare and Medicaid, they must adhere to all federal laws including those that classify medical marijuana as a Schedule I Controlled Substance. The result is a significant lack of insurance coverage for patients that require medical marijuana, legal on a state level, to treat serious medical conditions like childhood epilepsy.
Novus Acquisition & Development Corp. (NDEV) aims to capitalize on the void in the marketplace by establishing a health insurance program for medical marijuana patients. These efforts are being led by Ms. Andrea Lopez, MSM, AHFI, who has more than 15 years of experience in healthcare compliance, delivery, and development of insurance policies for large companies.
Novus Acquisition & Development Corp. also aims to provide structured protocols for physicians that are compliant with each state's regulation and federal recommendations in order to ensure they are on the level. The team conducts full-scale risk management analyses in order to mitigate business liability and promote workplace safety for employers, municipalities, and businesses.
With its focus on the healthcare side of the business, the company's solutions differ from compliance related solutions provided by other publicly traded companies like Integrated Cannabis Solutions Inc. (IGPK). ICS provides regulatory assistance to new and existing legal cannabis businesses, including dispensaries, that are trying to navigate their way through the heavily regulated industry.
The healthcare compliance side of the business also represents significantly less risk for investors than the growing side of the business. While growing operations under Canada's new MMPR are relatively safe, including companies like Abattis Bioceuticals Inc. (OTC:ATTBF) or Creative Edge Nutrition Inc. (FITX), there may be risks associated with companies operating dispensaries in the U.S.
Growing Need for Compliance
The need for effective healthcare insurance and compliance solutions are only likely to increase as the medical benefits of cannabis become more apparent. GW Pharmaceuticals' cannabinoid based Sativex® has already been approved in 25 countries and received Fast Track status from the FDA and plans to release top-line Phase III cancer pain data toward years end.
With medical cannabis use being increasingly justified, there's also growing concern among the public about the risks involved. Two high-profile Colorado deaths were recently tied to the over-consumption of cannabis "edibles" containing high levels of THC. These developments underscore the importance of additional risk management practices, especially in a new industry with few existing rules.
Businesses are also increasingly in need of compliance solutions. Employers cannot discriminate against employees simply because they possess medical marijuana cards, and no employer wants to face the prospect of a lawsuit for unlawful termination of an employee. Compliance solutions from companies like Novus can help businesses avoid these types of situations.
And finally, medical marijuana patients are in great need of insurance programs to help lower their costs and provide affordable coverage. The proven use of medical marijuana to treat conditions like childhood epilepsy has left many parents without a lot of options financially, which has created strong demand for insurance programs like the ones being developed by Novus.
Stay tuned for continued posts on this important issue.