Business
Canadian medical cannabis companies look to benefits-covered patients for growth
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.
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 didn’t pan out.
“It’s almost like tumbleweeds,” said Sullivan, CEO of Toronto-based employee benefits consultancy Cubic Health.
“There are very, very few of these plans that have moved ahead with medical cannabis coverage.”
Medical cannabis benefits strategies
Alberta-based Aurora Cannabis has refocused its business on medical marijuana, with a particular reliance on insured consumers whose benefits cover MMJ.
The company has a leading Canadian medical cannabis market share of 24%, CEO Miguel Martin told MJBizDaily.
Aurora says sales to “insured patient groups” accounted for about 80% of the company’s 23.4 million Canadian dollars ($17.4 million) in Canadian medical cannabis net revenue in its first quarter.
“Those that are in an insured program, by their very definition, buy more consistently, stay with similar pieces of medication for longer periods of time,” Martin said.
“… The noninsured patients do appear to have a little bit of a smaller basket size, a little less interaction, and to be a little more variable.”
Privately held Nova Scotia cannabis producer Aqualitas told MJBizDaily about 75% of its medical sales are covered by insurance.
George Scorsis, CEO of Ontario cannabis company Entourage Health (formerly WeedMD) said about 90% of the company’s medical cannabis clients are covered by insurance benefits.
Entourage, which is phasing out its cultivation business, reported medical cannabis net revenue of about CA$3.1 million in its most recent quarter.
The company’s medical cannabis strategy is anchored by a partnership with the Laborers’ International Union of North America (LIUNA), whose Canadian pension fund owns more than 30% of Entourage’s equity and is also a major lender to the company.
Scorsis said LIUNA locals offer dedicated medical cannabis benefits with coverage of CA$1,000 to CA$2,500 annually.
He also said Entourage’s Starseed Medicinal medical marijuana platform has relationships with other construction and trade unions whose benefit plans cover MMJ, arguing that focusing on selling medical cannabis to laborers makes sense as a safer pain treatment alternative in light of the opioid drug crisis.
Entourage puts patients “on a proper treatment plan, which is X amount of dose, X amount of times a day, of a certain product,” Scorsis said.
“So the stickiness of them, and retaining them within our model, is significantly higher. … They’re consistent with our brand throughout the entire journey from education all the way to the end of treatment and don’t leave our portfolio for a multitude of reasons.”
However, Scorsis said profit margins on medical cannabis aren’t necessarily higher than for adult use, even though medical marijuana doesn’t involve the “wholesale middleman” common in Canada’s provincial adult-use cannabis markets.
Entourage absorbs the costs of educating patients and physicians as well as patient call centers, reducing medical cannabis margins.
“Just to give you an example, we go to actual union halls and spend days (discussing) cannabis as a medical alternative,” Scorsis said.
Aurora CEO Martin said medical marijuana margins, on average, are roughly twice that of recreational cannabis.
But, like Scorsis, Martin said that margin advantage is offset by significant costs.
“Everything from the clinical work, the filings, the product development, the packaging, the testing, (to) all of the call center stuff is very, very expensive,” he said.
“And so there’s puts and takes to the business model, and I don’t think margin, in isolation, is the right way to look at the health of the business.”
Who has cannabis benefits?
Canada’s medical cannabis market was worth CA$93 million in the third quarter of this year, according to Statistics Canada, implying a CA$372 million annualized run rate.
Military veterans appear to represent Canada’s most significant group of benefits-covered medical marijuana patients: The Department of Veterans Affairs forecasts spending CA$195.2 million on cannabis reimbursements in its 2022-23 fiscal year.
In terms of private-sector cannabis benefits coverage, no one knows exactly how many Canadians are covered, according to benefits insider Sullivan.
Employee benefits plans fall into two main categories, Sullivan explained:
- Self-insured, or self-funded, plans in which employers underwrite their own benefit costs. These plans tend to be used by larger employers.
- Fully insured plans put the risk of coverage on the insurer and tend to be used by smaller companies.
Sullivan added that some benefits plans might also cover medical cannabis through employees’ health care spending accounts, but the annual spending caps for those accounts tend to be relatively small.
In comparison, open cannabis benefit coverage would treat medical marijuana “the same way as a prescription drug, where, if it’s approved, you can have coverage up to thousands of dollars a year, or potentially unlimited,” Sullivan said.
“There are very, very, very few plans that have that.”
Sullivan knows of no fully insured Canadian benefits plans that cover medical cannabis as an open benefit off the shelf, meaning cannabis coverage wouldn’t be a default benefit option for employers who use those plans.
However, he has seen employers choose to add medical cannabis coverage on top of fully insured plans – albeit with a requirement for “some form of prior authorization” or review.
Although medical cannabis market leader Aurora said it earned roughly CA$18.7 million in medical marijuana net revenue from benefits-covered patients in its previous quarter, Sullivan sees that quarterly total as a drop in the bucket in the context of the overall benefits market.
“There’s CA$15 billion-plus a year paid by benefit plans for prescription drugs,” he said.
Growing the benefits-covered medical cannabis market
Ned Pojskic is vice president of pharmacy benefits management at not-for-profit benefits provider Green Shield Canada, Canada’s fourth-largest benefits company.
Like benefits consultant Sullivan, Pojskic said early interest in benefits coverage of medical cannabis failed to lead to broad coverage.
In recent years, Pojskic said, human resources leaders and other benefits decision-makers have been focused on other problems such as rising drug costs, issues surrounding the COVID-19 pandemic as well as diversity, equity and inclusion efforts.
In the meantime, he said, “the maturity of the evidence on medical cannabis simply hasn’t grown” – and that evidence base would need to be stronger to justify increased benefits plan coverage of medical cannabis.
“I haven’t seen a single multisite, randomized, controlled trial emerge that has demonstrated the safety and efficacy of medical cannabis. … In the benefits-plan industry, we’re very much focused on the evidence, because we have these massive dossiers of clinical trials and information we receive from pharmaceutical companies to make decisions around coverage of their drug.”
Benefits expert Sullivan said that after adult-use legalization in 2018, Canadian cannabis companies lost their focus on medical marijuana.
“If you want to go after that market, and if you want to add value to that market, you have to dedicate time and effort and resources to understanding it,” he said.
Green Shield’s Pojskic said convincing the benefits sector to embrace medical marijuana would require the cannabis industry “to reengage the (benefits) industry anew on that.”
“Because they engaged the industry in 2017, 2018, 2019, but in a way, that clearly demonstrated their lack of preparedness to do so,” he said.
“They brought some doctors who were basically working for the cannabis industry, they brought others, but it was clearly unconvincing to our industry that what they were selling was good enough to buy.”
Aurora’s Martin agreed with Pojskic that more high-quality research could help increase the benefits industry’s acceptance of medical cannabis.
But he expressed optimism that such research is underway.
“You’re seeing it in key markets with key universities, and a variety of different agencies,” said Martin, citing the success of plant-derived cannabinoid medication Epidiolex in clearing regulatory hurdles.
“So, it absolutely can be done.”
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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