Right now, U.S. federal prohibition on cannabis stands in the way of establishing any comprehensive nationwide policy or real legitimacy for the emerging American cannabis industry.
But, by the time you read this, prohibition could be over. Developments in mid-April—strangely enough, right around unofficial cannabis holiday 4/20—have some thinking the tipping point is near.
First, former Speaker of the House John Boehner, a Catholic Republican, announced a week before 4/20 he would join the board of Acreage Holdings, a cannabis sector investment firm. Boehner, who smokes cigarettes, also has served on the board of tobacco giant Reynolds America in an advisory capacity.
Then, days later, Colorado Senator Cory Gardner, also a Republican, announced he had secured a promise from President Donald Trump that states will be allowed to establish their own cannabis policies. That may have been a signal Trump will nix Department of Justice action against cannabis businesses operating legally in legal states.
On 4/20, Senate Minority Leader Chuck Schumer (D-NY) announced his intention to introduce legislation that would decriminalize cannabis nationally. Over the 4/20 weekend, news network CNN announced the latest installment in its Weed docuseries, hosted by chief medical correspondent Sanjay Gupta. The first segment of the series, in 2013, almost singlehandedly changed the national cannabis conversation by introducing CBD to the American viewing mainstream as an alternative treatment for pediatric epilepsy. In the newest episode, Gupta looked at how cannabis could be used to battle the U.S. opioid crisis amidst growing demand for alternatives to slow the increasing rates of opioid addiction, overdose, and death.
The Food and Drug Administration in April also accepted public comment on cannabis, which will be reported to the World Health Organization. The comments will be taken into consideration when WHO reviews potential reforms to its international cannabis policy.
In his comment to the FDA, Acreage Holdings founder and Chief Executive Officer Kevin Murphy wrote,
“Considering its high degree of medical utility and low potential for abuse, cannabis is wholly unfit for Schedule I controls, which impede not only its medical use but also further research. The WHO Expert Committee on Drug Dependence has repeatedly recognized this fact, having called for a move to Schedule II or IV on multiple occasions.
“We would suggest, however, that cannabis should not be on any schedule,” Murphy continued. “Like alcohol and nicotine, it is simply not the type of substance for which control is appropriate; its widespread use, and the high degree of uselessness and wastefulness associated with its prohibition, should lead the FDA to recommend to the WHO that cannabis no longer be controlled under international law, freeing member nations, as well as regional and local governments, to legalize and regulate this extraordinarily useful plant as they see fit.”
Additionally, the FDA seems poised to approve the first cannabis-based medication, Epidiolex, on June 19. Developed by U.K.-based GW Pharmaceuticals, the medication is plant-derived CBD oil (containing no psychotropic cannabinoid THC) that treats specific, extreme forms of pediatric epilepsy, including Dravets and Lennox-Gastaut syndromes. GW Pharmaceuticals’ other cannabis-based medication, Sativex, a 1:1 blend of THCA to CBD, is formulated to treat spasticity related to multiple sclerosis and is available in thirty countries. The U.S. is not one of them.
So…what’s it going to take to convince U.S. lawmakers to reschedule cannabis?
CannaKids founder, chief executive officer, pediatric medical cannabis advocate, and cancer mom Tracy Ryan thinks education and more pushing will be required, even if that means her daughter, 5-year-old cannabis patient Sophie, has to projectile vomit all over officials.
What’s the problem?
Status as a Schedule I drug means cannabis has no medicinal value, as far as the WHO and U.S. government are concerned. THC—the psychotropic cannabinoid in marijuana—is defined as “hazardous” like fellow Schedule I narcotics cocaine and heroin (also plant derivatives). The designation for cannabis means any research necessary to document potential benefits (or adverse effects) of cannabis plant compounds is prohibited, with research organizations, scientists, and academics unable to access even basic raw materials—namely, federally illegal, medicinal-grade cannabis.
Beyond just trying to keep up with a hodgepodge of regulations that vary from state to state and jurisdiction to jurisdiction, the lack of federal guidelines for cannabis crops also makes it difficult for cannabis companies to implement standard practices or effectively regulate hundreds of areas of specific concern.
To end U.S. cannabis prohibition, federal authorities will have to reschedule marijuana, allowing national legalization to follow. That would open the doors for companies, especially those already heavily invested or pursuing costly patents for FDA-approved cannabis-based medicines, to nationalize their businesses, access banking, diversify into other sectors, conduct increased research and development, and compete in the global markets like any legal industry.
But, in many ways, lifting prohibition would be only the start of the often slow-moving process of dealing with the federal government.
“I think we’re a long way from talking about a global cannabis market,” said litigation and real estate attorney Brad Blommer of Portland, Oregon-based Green Light Law. His experience in the highly regulated area of real estate law gives him insight into how complex regulations could become for cannabis.
“Here in Oregon, there have been significant challenges marrying the new recreational cannabis regulations [with] the existing zoning and occupancy laws on the state and county levels,” he said. “Each of the states with recreational programs has created significantly different regulatory schemes, and I imagine that will continue as each new state passes laws to establish a recreational marijuana program. Consequently, even when marijuana becomes legal at the federal level, it will remain regulated by each state in the context of its own regulatory program. Before interstate commerce can begin in the cannabis industry, the creation of some type of uniform regulations will need to occur.”
From a recreational perspective, the FDA cannot and will not approve whole-plant cannabis as a pharmaceutical, because its effects and dosage are hard to measure and vary greatly from individual to individual. But producing pharmaceutical-grade cannabis medications is a wholly different and very expensive kettle of cannabis oil. By the time a new FDA-approved medication reaches pharmacies, the product can have cost its manufacturers more than $2 billion in development, testing, and marketing.
While on its face legalization in the U.S. seems to be inextricably linked to recreational use of cannabis and its potential liabilities, that’s increasingly outweighed by the promise of billion-dollar tax revenues and employment possibilities. That said, regulation for the recreational sector probably would look a lot like alcohol regulation at the state level.
The global cannabis market largely is focused on medical cannabis, its compounds and applications, in forms that can be considered for governmental and regulatory approval.
As an advocate and mother, CannaKids’ Ryan turned to cannabis oil when Sophie, not yet one year old, was diagnosed with an aggressive, non-malignant, tumor called an optic pathway glioma. With dim prospects for Sophie’s quality of life even with conventional cancer treatment, Ryan and her husband sought alternatives.
In the four years since, Ryan has traveled the world on behalf of cannabis medication research for treatment of pediatric conditions including cancer, autism, and epilepsy. Her efforts to conduct clinical trials on her own daughter’s tissue samples illustrate the difficulties presented by federal prohibition in the U.S.—and the limitations on conventional pharmaceutical research for little-known diseases.
Two years ago, Ryan hand-delivered tissue samples from Sophie’s original tumor biopsy to researchers in Israel for genomic sequencing and so the scientists could observe specific effects and reactions of cells to treatment with cannabinoids in an effort to block mutations in Sophie’s tumor. That kind of research is impossible to do in the United States because of prohibition.
This year, to further the research, Ryan is working with Israel’s prestigious Technion Institute on a project partially funded by Oxnard, California-based Cure Pharmaceuticals.
“One problem area that we have is finally operable, though the rest of the disease has been pretty stable for a while now,” Ryan said. “[The mass], which is in the temporal lobe, is easy to access, easy for them to operate on… So, [Sophie] is going to have this mass removed, not only to relieve the pressure in her brain but also so we can understand what new mutations are in this tumor.
“I’ve solidified a relationship with a research scientist who is going to implant Sophie’s tissue into [mice],” Ryan continued. “We are then going to have those mice flown to Israel, to the Technion Institute, and we are finally going to get my daughter the research she deserves; that no one else will do for her because she has pediatric cancer.”
Even if there were no prohibition on cannabis, Ryan isn’t sure the research for Sophie’s type of cancer would be conducted in the U.S. There isn’t much demand for medicines to address rare conditions like the aggressive glioma assaulting Sophie. Most children diagnosed with so-called “orphan diseases” have a low life expectancy, so most pharmaceutical companies aren’t eager to spend billions to develop new treatments.
That’s why Ryan won’t stop pushing back against prohibition. Sophie traveled with her mom and dad on a recent trip to speak to lawmakers in Hawaii. During the trip, Sophie developed a sinus infection. Her parents didn’t know until the three of them were aboard the plane in mid-air.
Upon landing, the family was rushed to the hospital with Sophie projectile-vomiting and generally miserable. An emergency MRI was required to obtain a definitive diagnosis when sinus fluids made initial X-rays cloudy and inconclusive for possible tumor growth.
Veterans of emergency rooms and navigating hospital protocols, the Ryans were calm until staff informed the family the hospital couldn’t administer the cannabis-oil medicine used to relieve the side effects of Sophie’s cancer treatment. Even though Hawaii approved medical cannabis in 2000, laws prohibit hospitals administering cannabis medicines to patients.
Ryan pointed out the hospital was able to administer morphine when Sophie complained of a headache. Ryan refused the opioid medication, saying Sophie’s headache did not seem severe enough to require narcotics.
Later, when speaking to Hawaiian legislators and officials at a conference sponsored by dispensary Lau Ola LLC, Ryan relayed the whole scary, frustrating story. She explained why it was imperative Sophie and other children like her have access to their cannabis medicine no matter where they are.
“Some of the most powerful decision makers in Hawaii were sitting right in front of us, and I let them all know what had happened,” Ryan said. “I used [the address] as a learning opportunity to have us take a look at how we’re treating patients in America—offering children morphine but denying them cannabis, when cannabis is helping us target the opioid crisis.
“Now that we have done this and told our story in front of Hawaii, [lawmakers] are working on legislation to let patients consume cannabis inside hospitals,” she continued. “It’s something they never thought of, because we are so behind. We just don’t understand how we can be using this plant in so many different ways.”
‘Grow roots where you’re planted’
One thing astute entrepreneurs and researchers have learned from global trade in other industries: There’s more than one way to prune a plant, so to speak. American cannabis companies are doing their strategic best to establish early in every market, despite the risks attendant upon operating in legal limbo—even if the strategy means going overseas to do research, strike licensing deals, or partner with multinational cannabis companies in Israel, Canada, Australia, and other progressive nations. The U.S. market may be fifty shades of gray, but the global potential for big business is red-hot and green.
“Our researcher in Israel is currently part of thirteen human trials that are being conducted in hospitals, where patients are healing from [taking cannabis medications],” Ryan said. “But this isn’t just in Israel, though Israel is definitely way, way ahead of the rest of the world because they’ve been [researching] longer than anyone else. We’re working in Australia now, because CannaKids has been licensed in Australia.”
In fact, according to a 2018 report by IVC Research Center in Tel Aviv, seventy Israeli companies operate in the medical cannabis space. Israeli researchers are leading studies and clinical trials on using cannabis medications to treat cancer, chronic pain, epilepsy, asthma, insomnia, autism, post-traumatic stress disorder, inflammatory bowel disease, Parkinson’s, Crohn’s, and multiple sclerosis, among others. The list of conditions that show potential for further research is growing rapidly.
On the business side, big Canadian cannabis companies with legally established vertical integration, global partnerships, and ticker symbols on the Toronto Stock Exchange anticipate legalization of adult-use cannabis in early August. Canadian multinational cannabis company The Cronos Group recently partnered with U.S.-based dispensary chain MedMen to develop retail storefronts in Canada.
Aurora Cannabis, another Canadian mega-company, expects to produce up to 270,000 kilograms of cannabis by 2019. One hundred thousand kilograms will be grown at Aurora’s Sky facility, a state-of-the-art grow located on the property of Edmonton International Airport and developed in a joint venture with Denmark tomato grower Alfred Pedersen & Søn (also known as Aurora Nordic). The partnership also will yield a one-million-square-foot, fully automated, high-tech grow facility in the Netherlands, which the companies believe will be the largest cannabis production facility in Europe. The first phase of construction, 200,000 square feet, is expected to be complete by the third quarter of 2018.
America, the world is waiting.
