In the context of a shrinking medical marijuana market, some Canadian companies are focusing on selling medical cannabis to patients whose purchases are covered by employee health benefit plans, citing improved customer retention and consistency.
Major licensed producer Aurora Cannabis and several other players have adopted a benefits-focused medical strategy, which comes as prices have fallen in Canada’s fragmented, competitive recreational marijuana market.
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Although the benefits-focused strategy suggests an avenue for higher-margin growth in maturing medical marijuana markets, cannabis companies say serving benefits-covered clients comes with high costs for education, customer service and research.
Plus, adoption of medical cannabis benefit coverage has been relatively low in the grand scheme of Canada’s health industry, according to Canadian employee benefits expert Mike Sullivan.
Before adult-use legalization in October 2018, Sullivan expected benefits coverage for medical cannabis would become “an enormous area for these self-insured (benefits) plans.”
That prediction
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