Marijuana reform was a key ballot initiative in seven states (as well as 17 municipalities and D.C.) this week, with more drug policy reform questions (most aimed at reforming or out outright repealing marijuana laws) on the ballot than at any time in the history of the country. In California, Proposition 47 was passed, transforming the lowest-level non-violent crimes like simple drug possession, from a felony to a misdemeanor, freeing up an estimated $1B per annum to be dedicated to useful things like crime prevention, school funding, mental health treatment, and victim services. Regulatory reforms like this are opening up sizeable markets for both private and public sector participants.
Also notable, the passing of Measure 91 in Oregon makes them the third state to legalize marijuana for adults outrightly, subsequently creating a statewide system to regulate production and sales. In Nevada, the state agency tasked with regulating the medical marijuana dispensary program has just released data on the limited number of dispensaries who waived confidentiality, indicating at least 40 dispensaries (12 in Las Vegas), as well as some ancillary facilities like cultivators and product testing labs, have received provisional licenses. The move by D.C. regulators to go even further than their existing decriminalization law, with voter-approval of Initiative 71 making it legal for age 21 and older adults to possess and even cultivate small amounts of marijuana, provides solid guidance on the potential upper market limits for hydroponic equipment manufacturers like Growlife (OTC: PHOT), GreenGro Technologies (OTC: GRNH), and Terra Tech Corp. (OTC: TRTC), as well as mPact™ Cleaning Antimicrobial System ozone technology developer, Amfil Technologies (OTC: AMFE).
Market Potential Outstripping Provider Traction
Given such data points, there appears to be unprecedented momentum in the U.S. to legalize marijuana and bring what is effectively an already-established, roughly $47B off-book market, into the realm of regulation and taxation. The ArcView Market Research analysis is quite telling here, with a 2018 projection for the industry of around $10.2B given prevailing regulatory winds of change and an observed 64% jump in the market last year, with 2014 estimates of some $2.34B. Oregon’s state financial estimate committee foresees tax revenues at anywhere from $17M to $40M as a result of decriminalization, with NerdWallet’s study going even further, indicating as much as $50M to $100M annually when all factors are taken into account. Medical marijuana cannabinoid medicines, such as sector powerhouse GW Pharmaceuticals’ (NASDAQ: GWPH) Sativex®, used to treat the symptoms of Multiple Sclerosis (as well as cancer/neuropathic pain), or the phytocannabinoid indications being developed by Cannabis Science (OTC: CBIS) for critical illnesses, also stand to benefit as American’s attitudes towards marijuana soften further, leading to more widespread receptivity/adoption by consumers and physicians alike.
One of the only things missing from the overall equation, especially when it comes to medical marijuana, is a well developed and affordable access market for patients that utilizes the same methodologies currently employed by the health insurance industry. Major insurance providers have been loath to enter the market due to complications created by federal classification of marijuana as a Schedule 1 Controlled Substance, despite the growing body of clinical data establishing the efficacy of marijuana strains rich in cannabidiol (CBD) when it comes to treating epilepsy, particularly among children.
Comprehensive Provider Network in Open Enrollment
Novus Acquisition & Development Corp. (OTC: NDEV) has hit the ground running to address the lack of comprehensive, fully compliant services in this area, with a cost-saving provider network model via their wholly-owned Novus Medical Group subsidiary. Novus MedPlan represents a substantial value proposition for both providers and patients alike and is the first cost savings plan in the medical marijuana space which incorporates a network of providers. The Novus MedPlan is designed to not only create affordable access for patients, but also offer providers direct market access to an established, growing body of enrolled patients. The company will generate ongoing sales at a low price point in a manner similar to the revenue model used by healthcare insurers and has even moved to include broader and holistic medicine offerings via a partnership with established Phoenix, AZ area integrative medicine provider, LifeGuard Wellness Clinic.
Watch a short CannabisFN Company Spotlight highlighting Novus Acquisition & Development Corp’s unique approach to reducing healthcare costs within the medical marijuana and wellness industries here https://vimeo.com/111004021.
The launch of open enrollment for the Novus MedPlan marks the debut of a unique insurance model which could revolutionize medical marijuana patient care, while providing an array of even more alternative treatment choices to a demographic already typically keen to pursue them. Connecting patients with alternative medicine providers who can address a variety of conditions, which many consumers increasingly feel are not and cannot be addressed by synthetic pharmaceuticals or other features of modern medicine, is a powerful way of uniting disparate elements in this burgeoning sector.
Marketing & Sales Tools, Plus Compliance Risk Mitigation
Providers benefit from the marketing and sales tools provided by Novus, like placement on their Novus MedPlan website where enrolled patients sign-up, as well as from patient referrals and the abundance of relationship/network building advantages available via the network’s access to growers, service providers, and other industry participants. An additional benefit to providers is a referral fee in states where it is legal. Novus MedPlan brings patients a large and growing menu of medical marijuana product options from a constantly evolving list of providers, all via a single portal which allows them to search, compare and contrast a range of medical marijuana products on a state-by-state basis, ensuring regional regulatory compliance while saving money. The Novus MedPlan site also enables patients to find doctors in any legal state who are receptive to prescribing/seeing medical marijuana patients, or who are open to prescribing other alternative treatment options.
Novus Acquisition & Development’s professional risk management services arm, NovusQC, further offers operators in all aspects of the medical marijuana sector, from employers and municipalities, to healthcare providers and others, comprehensive state and federal compliance capabilities, covering processes and procedures, with ongoing evaluation. Providers can generate credibility in the sector by working with a publicly traded company via Novus’ MedPlan and all sector operators can help mitigate their compliance risk using the company’s NovusQC services, which also promote the best clinical outcome for healthcare consumers who have been approved for a medical marijuana treatment plan, as determined by a licensed physician.
Marrying up consumers who are seeking medical marijuana and alternative treatments, with providers who share a common vision for helping individuals in need, is a recipe for mounting success as more and more states move legislatively to enable the transition of the market from off-book, to a tax revenue generating industry. Novus Acquisition & Development plans to be there to capture market share and presents a unique growth opportunity to investors as they continue to roll out their patient-focused Novus MedPlan in this still largely nascent industry.
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