How will cannabis legalization reshape the insurance industry?
For the first time in more than a decade, the state of New York faces a budget deficit of more than $6 billion. In his recent state of the state address, Governor Andrew Cuomo strongly pushed for cannabis legalization, which he claims will generate more than $300 million in tax revenue annually.
Governor Cuomo is not alone. Increasingly, more states and governors are exploring weed legalization for retail use. They, too, face similar budget shortfalls and argue, beyond revenue generation, that marijuana laws, as currently constituted, generate adverse effects, with many in minority communities disproportionately and adversely impacted for possessing relatively small quantities of cannabis.
While this no doubt will continue to be a polarizing issue, the reality is the explosion of vaping products, like Pax and Firefly vaporizers, paired with the establishment of retail dispensaries in states like Illinois and Massachusetts, will necessitate insurance policies that adequately cover associated risks.
The insurance industry is sailing into new and unfamiliar waters, which will profoundly affect how, when and where they communicate with their stakeholders, including journalists, clients, prospects, employees and regulators. So, what does that mean for marketers and corporate communicators responsible for shaping these messages? Let’s explore.
A dual breathalyzer for marijuana and alcohol
NFP, a leading insurance brokerage and long-running Hot Paper Lantern client, established a new venture fund focused on strategic partnerships and investments in the emerging Insurtech, Fintech and HR Tech arenas. The launch of this fund coincided with the establishment of NFP’s Innovation Lab, which supports the fund through ongoing market research.
A telling example demonstrating how NFP is interacting with stakeholders on cannabis-related issues is a recent investment NFP Ventures made in Hounds Lab, a technology startup focused on developing the first marijuana breathalyzer. Here’s the idea as Business Insider put it: “If successful, the technology could help employers and police detect people who are currently impaired from the type currently available. The tool also measures alcohol like a standard breathalyzer.”
From NFP’s perspective, some of its clients and prospects currently work in the transportation, logistics, and construction spaces. If, hypothetically, a worker tests positive for cannabis use on the job, but legally used cannabis on the weekend, this could be perceived as an unfair practice. In an interview with Business Insider, Shawn Ellis, managing director of NFP Ventures, provides NFP’s rationale for investing in the startup:
Ellis “sees Hound’s device as a potential solution to poor hair- and urine-based drug testing methods currently used across industries like construction and trucking. Those tests can’t distinguish between someone who just smoked and someone who used several days before.”
“It’s a huge leap forward to move away from hair and urine testing.”
This is just the beginning
As you can see from the above example, NFP and Mr. Ellis identified a clear need in the marketplace and shared objective, data-driven insights that were of use to Business Insider, other media and prospects looking for practical information about insurance products connected to the cannabis industry.
Good content can take many forms – whether as a series of short informational videos on the most pressing questions facing business connected to cannabis use, to thought leadership articles on implications for retail dispensaries looking to set up shop.
Each insurance brand, whether a broker or carrier, has unique challenges, needs and goals. However, amid contentious policy debates and hyperbolic exchanges prone to misinformation, customers, prospects and employees will be looking for impartial, fact-driven content to educate and inform about cannabis legalization.
Corporate communications and public relations professionals, within the insurance industry, need to create a multi-stakeholder strategy (e.g., regulators, employees, customers, prospects, journalists, investors) that digs in to the unique concerns, pain points and opportunities for each. Sensitive cultural perceptions should be balanced with pragmatic business implications – rooted in education-oriented communications from which stakeholders can glean helpful insights. This approach will enhance credibility, which, by extension, will make the media more likely to reach out to your brand, strengthen your company’s reputation and elevate brand awareness.