Does the Industry for Cannabis Provide More Challenges in Its Insurance Provision?: A Case of Global Perspective

Introduction

Insurance or so-called cover relates to a tool of risk management which is utilized by organizations namely insurers and banks or individuals whether it is traditional or conventional . The term insurance is so common these days that it is classified to be a decent legal service that is proposed to the various stakeholders including the public as a whole. Life or long-term assurance, for instance, was considered to be rude to many religions as buying an insurance policy was seen to go against the divine forces in the 1700s (Clark & Clark, 1999). However, Britain allowed life insurance to develop, mainly because the protestants needed to find some measures of generating some type of life cover to protect their families in case of an unexpected hardships. It was motivated that long-term life insurance is equipped with many benefits, thus a culture was then generated of having a long-term cover to bet on third persons’ life. The enactment of a piece of legislation namely, Life Assurance Act of 1774 by parliament required a subscriber to convey an “insured interest” on the life of an insured, then started the conventional regulatory and supervisory balance of allowing insurance to receive socially and mentally beneficial-related results and simultaneously regulating the insurance industry to reduce challenges. The roots of insurance embodied important principles and measures that keep on informing conventional regulation of insurance through supervisory, judicial and legislative efforts to counteract the unwanted consequences that cover has on behavior of people. For instance, a subscriber of an insurance life policy having another insured on his policy can have a motive of bad faith to end that person life and received all the benefits of the policy. Tackling the concept of moral hazard has been an important aspect of regulation in the insurance sector. In South Africa the long-term insurance Ombudsman deals with these scenarios and in other countries there is a pool of funds that is put by the government to assist the victims for his public good in case the insurer refused to pay the claim.

Over the years, several important life insurance principles have been brought into the relief and arena of the law of insurance and have even been applied especially now that the cannabis market of several legalized states has emerged recently with so much determination in some countries. The so-called famous cannabis also known as marijuana, is a term used interchangeably in different contexts. Marijuana contains a psychoactive component known as Tetrahydrocannabinol (THC) derived from the cannabis plant. Over 100 different cannabinoids have been identified in the cannabis Sativa plant (Bogdanovic, Borisev, & Ivana, 2017). Cannabidiol (CBD) contains chemical substance and is meant for therapeutic use by an authorised prescriber. Native to South Asia and central Asia, cannabis has over the years been utilized for entheogenic, recreational and traditional medicines purposes.

On a worldwide font, the need and importance to understand the requirements of a respective cannabis market and also consider the steps to address insurance needs in their respective state markets in their integral terms has never been felt like nowadays in view of their challenges. In an attempt to stimulate future growth, it is needless to mention that many regulators of cannabis related insurance have emphasized the needs to encourage successfully the participation of insurers to offer the legal cannabis business providers some sort of cover. Although the participation rate and level of cannabis business providers has increased, there is still a huge insurance gap related to cannabis in many parts of a country or states where it has been legalised. Cannabis has been classified as a product that is unique. Any product, including a cannabis product that is marketed with a claim of therapeutic benefit, or with any other disease claim, is considered to be a drug . Generally, a new drug must be approved by the Food and Drug Administration (FDA) for its intended use before it may be introduced into the activities of inter- states. The United States Food and Drug Administration (FDA or USFDA) is a federal agency of the Department of Health and Human Services. The FDA is responsible for protecting and promoting public health. It Protects the public from harmful products Many parts of the country consider cannabis as not legal in the United States. The Development of drugs has focused on using particles in cannabis: Cannabidiol(CBD) and Tetrahydrocannabinol (THC)