In a press release published last week, Shimadzu Scientific Instruments announced a partnership with MoCann Testing, a division of EKG Labs. MoCann Testing is the first state-certified medical cannabis testing lab in Missori.
It sounds like the partnership involves Shimadzu supplying MoCann with instruments and supporting their testing efforts with training, method development and maintenance, though the press release does not mention any details.
“We are excited to support MoCann’s mission to help individuals across the state of Missouri have access to safe medical marijuana through accurate sample testing and quality results,” says Bob Clifford, Ph.D., general manager of marketing at Shimadzu. “Because selecting the right analytical solutions is a critical investment, we provide more than just advanced instrumentation and software. We assist with method development, instrument training and maintenance that keep systems operating at the highest level.”
MoCann Testing is certified by Missouri, accredited to ISO 17025 and they offer the full gamut of testing services for growers and manufacturers in Missouri.
Cannabis reform is proceeding globally right now in some interesting places, and in an oddly syncopated schedule yet again.
Namely, in the last few weeks, change has been moving forward not only in the U.S., but Europe too. That this effort in the EU came literally weeks before the American presidential election where as of now, no matter who will occupy the White House, even more states move into the adult use camp is also surely no accident. Particularly given the results.
In South Dakota’s case, voters agreed to legalize both a medical and recreational market in a single election. In New Jersey, the referendum that passed authorized a market that is moving quickly to get implemented. This is equally intriguing. Namely that to the average person right now, no matter where they are, the continued delays and gridlock to get going, no matter the problems along the way, are increasingly unpopular politically. That too, is showing up at the ballot box.
Indeed, cannabis reform is now absolutely one of the most pressing and yet unaddressed issues in several countries at present. See New Zealand (where the voter mandate for adult use reform failed during their Presidential election last week).
Europe Seems To Be Following New Zealand’s Caution As Germany Delays Further Reform But…
Last week, a proposal on adult use cannabis reform failed in the German Bundestag (Parliament). With the exception of the far right Alternativ für Deutschland (AfD), every other political party agrees that there needs to be forward motion on the topic, but nobody seems to want to fully address it. This is no surprise. Indeed, the recent appointment of a former German minister last month to a Swiss cannabis company seems, certainly in retrospect, to presage the same. As well as the many protest votes on the topic emanating from Berlin, one way or the other.
However, in the aftermath of what is expected to be a widely influential medical case here (namely the regional approvers may not interfere with a doctor’s right to prescribe to qualified patients), it may be that the government wants more time to grow its medical program while Denmark, Holland and Luxembourg (if not Spain) figure out the logistics on the ground.
French medical trials expected to begin Q2 of 2021
Given that France has finally committed to a national medical trial to begin no later than the second quarter of next year, and further one where it punts the majority of the cost onto the industry itself, this would create a solid “medical cannabis” bloc in Europe’s most affluent states. Not to mention the first real, nationally authorized patient trial in Europe that is not commercial.
But even this is not the whole story. While dickering about the certifications and scheduling of the plant go on now at the highest international levels, let alone federal ones domestically, hemp products are clearly entering the consumer market here – from upscale CBD stores in city centers to hemp seed oil and hemp-infused mayonnaise appearing on the shelves of German mainstream grocery stores. Not to mention hemp infused alcohol of at least the vodka, gin and rum varieties.
And then of course there is Italy.
The Italian Market May Be The Dark Horse In Europe Everyone Has Been Waiting For
Within literally the month of October, all in public view, the Italian government circled on the topic of legalizing the CBD/hemp market. As of last week, the Ministry of Health finally decided that cannabidiol sourced from hemp is not a narcotic.
CBD in Italy went from widely available to banned and back to available again.
Given the fact that home grow now is not illegal, and medical cannabis is technically available, it would seem that Italy is positioning its hemp market to survive if not thrive at least domestically and further thread the needle of industry continuity against fluid and further rapidly changing European and international regulation right now.
In the meantime, like Germany, however, the country is clearly angling to create an industry infrastructure – and further beyond the pharmaceutical vertical – via “other” channels before taking the final plunge. Cannabis Lite fits that bill perfectly.
What Does This Mean For 2021 And Beyond?
No matter the official denials, it is very clear that recreational cannabis reform at the American and Canadian ballot box is moving the conversation forward globally, even if at a different pace.
With the WHO now poised to weigh in on the issue, more American states signing up, an expanding medical market across the world and adult use upstarts everywhere, 2021 is absolutely sure to be a meaningful year just about everywhere on the cannabis front.
Editor’s Note: This article has been updated to include the presidential and congressional election results.
While the votes continue to come in for the presidential and congressional elections and we have some concrete results materializing, cannabis legalization has emerged as a clear winner across the board. Five states had initiatives on the ballot to legalize cannabis in one form or another and voters in all five states approved those measures by wide margins.
As of this writing, 15 states now have legalized adult use cannabis and 36 states have legalized medical cannabis. That is a significant portion of the United States with some form of legal cannabis, even without counting the emergent hemp markets across the country.
After a tight race and mail-in vote counts diminishing President Trump’s lead days following the election, Joe Biden has won the White House. Most cannabis industry stakeholders see this as a win for cannabis as both Biden and Vice President-Elect Kamala Harris have voiced support for federal decriminalization of cannabis. The vocal support is very much so tied to their campaign on ending racial injustices and systemic racism, citing the failed war on drugs for disproportionately harming communities of color.
While it is looking like the Democrats will retain control of the House of Representatives, it is still unclear which party will control the Senate. That question likely won’t be answered until January 2021, when voters in Georgia will decide on two Senate seats in runoff elections that will decide which party gets the majority. With a Democratic majority in the House and Senate, it is entirely possible that the Biden administration could decriminalize cannabis on a federal level within the next four years. Without that majority, however, it is possible reform could come at a much slower pace.
As more states legalize cannabis, their neighbors see the potential economic benefits and want to cash in on the movement. Just take a look at the West Coast.
Comments made by politicians leading up to the election in the Northeast also shed some light on the alleged domino effect coming to the United States. In late October, about two weeks before the election, New York Governor Andrew Cuomo was asked when his state will legalize adult use cannabis. His answer: “Soon, because now we need the money.” Back in September, Pennsylvania Governor Tom wolf specifically asked the state legislature to legalize adult use cannabis. Governor Wolf said “people will go to New Jersey” to purchase cannabis once it becomes legal in the neighboring state.
Question 1 in NJ won by a very wide margin
Well, New Jersey legalized adult use cannabis. So now it appears we are in a waiting game to see which neighboring state will move forward before the other. Alyssa Jank, consulting services manager at Brightfield Group, predicts cannabis sales in New Jersey to reach about $460 million in 2021, up from about $94 million this year. She says the market could reach $1.5 billion by 2025.
Sam D’Arcangelo, director of the Cannabis Voter Project, a division of HeadCount, says the New Jersey measure is pretty bare-bones, so the legislature will need to pass enabling legislation that actually creates the adult-use program. “It’s tough to tell exactly what that legislation will look like or how long it will take to pass, but it’s possible it will be approved pretty quickly,” says D’Arcangelo. “Tonight’s results could set off a domino effect that inspires lawmakers to move forward with legalization in a number of states throughout the region.”
Let’s take a closer look at Arizona: Back in 2016, Arizona had a measure on the ballot to legalize adult use cannabis that failed to get enough votes. Things have clearly changed in the state in the last four years because Prop. 207 (the 2020 ballot initiative to legalize adult use cannabis) won 59.8% to 40.2%. Arizona now joins a massive West Coast bloc of states slowly creeping inland that have legalized adult use cannabis, including, Washington, Oregon, California, Nevada and now Arizona, not to mention Montana. Drug Policy Alliance’s Emily Kaltenbach believes that New Mexico will follow suit as well, with three out of four voters in the state in favor of it.
Voters in Mississippi approved a medical cannabis program by a wide margin with almost 74% in favor. Even more encouraging, voters in the state rejected the legislature’s attempt to hijack the initiative with their own alternative measure that would have involved developing their own program as they see fit without any sort of deadline.
While Montana can tend to lean slightly Democrat, it is surrounded by heavily Republican-dominated states like Wyoming and Idaho. With both Montana and South Dakota voters approving adult use legalization measures, this presents a potential inroad for cannabis to reach far more conservative states in the Northern Rockies and beyond.
Greg Kaufman Partner at Eversheds Sutherland and frequent Cannabis Industry Journal contributor, says this election puts considerable pressure on Congress to take some action on one or more of the cannabis-related bills currently pending. “In several states, cannabis was more popular than the winning presidential candidate, regardless of the party of the winning candidate,” says Kaufman. “This suggests that cannabis is not a partisan issue, nor should it be.”
The 15 states that have legal adult use cannabis now represents about 34% of the population in our country. “During the most divisive election in modern U.S. history, Americans demonstrated unity around at least one issue – cannabis policy reform,” says Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association. He says the victories we saw this week are commendable and will lead to a lot of new jobs, tax revenue and thousands of fewer arrests, but there is still a lot of work to be done. “We look forward to building on this progress as we continue to work with Congress to end the conflict between outdated federal laws and the growing number of states with regulated cannabis markets, and help undo the racially and economically disparate harms caused by prohibition.”
While we wait to hear who will control the Senate in 2021, which will have a massive impact on cannabis reform, we leave you with this great quote from Aaron Smith: “There is still a lot of work to do, but the wind is at our backs.”
Five states had cannabis reform on the ballot yesterday for the 2020 election: Arizona, Mississippi, Montana, New Jersey and South Dakota. All five ballot initiatives won by a clear margin, with some races ending in landslides. Stay tuned for coverage on congressional and presidential elections and the impact on the future of the cannabis industry.
For now, here are which states legalized cannabis last night, as well as some details on the five (well, technically eight) state ballot initiatives:
Arizona – Prop. 207 (Adult Use)
Results: 59.8% Yes, 40.2% No
Details:
Legalizes cannabis for adults over 21
Puts a 16% tax on retail sales of cannabis and cannabis products
Develops a process for expunging records of cannabis-related drug offenses
Arizona already has an established medical cannabis program
Mississippi – Initiative Measure 65 & Alternative Measure 65A (Medical)
Results: 67.9% Yes for either, 32.1% No against both
Details:
Both initiatives theoretically legalize medical cannabis in the state.
There is a legislature-proposed alternative on the ballot, which makes things a bit confusing and gives voters the option of voting for both, neither or one of the two.
Initiative 65 would give the state’s department of health a mandate and authority to establish regulations for a medical cannabis program by August 2021. This initiative lists 22 qualifying conditions.
Initiative 65A gives the legislature the power to come up with their own program as they see fit and does not include any sort of deadline.
Legalizes, taxes and regulates cannabis for adults over 21
Requires the state’s department of revenue to license and regulate cannabis businesses
Puts a 20% tax on retail sales of cannabis and cannabis products
Develops a process for expunging records of cannabis-related drug offenses
Montana already has an established medical cannabis program
Initiative 118:
This just allows the language of the initiative to call an adult over 21, instead of 18 as it is stated in the Montana constitution.
New Jersey – Question 1 (Adult Use)
Results: 66.9% Yes, 33.1% No
Details:
Legalizes, taxes and regulates cannabis for adults over 21
New Jersey already has an established medical cannabis program – this ballot measure gives authority to the regulatory body currently overseeing the medical program, the five-member Cannabis Regulatory Commission.
Only applies the 6.625% state sales tax and prohibits additional sales taxes.
South Dakota – Constitutional Amendment A & Initiated Measure 26 (Adult Use & Medical)
Details:
Constitutional Amendment A Results: 53.4% Yes, 46.6% No
Legalizes, taxes and regulates cannabis for adults over 21
This also requires the state legislature to set up a medical program as well as a hemp program by April 2022.
Puts a 15% tax on retail sales of cannabis and cannabis products
Gives local governments authority to allow or ban cannabis businesses
Initiated Measure 26 Results: 69.2% Yes, 30.8% No
Establishes a medical cannabis program in South Dakota
It does list a few qualifying conditions like severe nausea, chronic pain, seizures and more, but it gives the state’s department of health the power to add more conditions to that list.
SD Department of health would have 120 days to set up regulatory framework.
As more nations across the globe embrace the benefits of legal cannabis, to say the business is booming is an understatement. But with cannabis going corporate in a big way and marketing standards still hit or miss, the reality of unethical marketing practices that manipulate consumers and run roughshod over small businesses threatens to do harm if not brought under control.
Enter Cresco Labs, a major player in the international cannabis industry. Contrary to what you might expect, and bringing in a breath of fresh air, this giant is pushing to install marketing standards that protect the ethical interests of all cannabis businesses.
In this article, we will take a look at some key elements of ethical advertising in the cannabis industry and explore the Cresco Labs proposal.
This dispensary ad appeared on Variety.com
The Power of Advertising
Advertising is a powerful medium for rebranding and influencing public perception. The messages conveyed by ads reflect the changing moral, ethical, and consumer opinions of society – and often create them in the first place. For cannabis, an industry rife with stereotypes, ads present a strong opportunity to change the popular face and perception of cannabis as nothing more than a vehicle to get high.
Today’s numbers tell a different story with a full 19% using it for pain relief and another 37% to relax. Even one successful ad campaign can change the mind of a skeptical consumer. So how to ethically harness this power?
Cannabis rebranding generally works best when it draws on four main elements:
Emphasize health and wellness benefits. Most new customers who are interested in cannabis these days are attracted by the inspiring health and wellness possibilities that cannabis products present. By redefining cannabis as a medical product suitable for families, the elderly and patients suffering from various ailments, and not simply as a way to get high, cannabis companies can target the audiences that will most benefit from their products.
Replace typical “juvenile” imagery with sophisticated graphic design approaches. With so many options for how to use and consume cannabis these days, it is no wonder that brands are embracing trendy, sophisticated, contemporary design techniques. Logos featuring minimalist and elegant fonts more accurately express the narrative behind products such as cannabis teas, cannabis-infused oils and edibles.
Highlight the science behind the products. For those naysayers still determined to limit cannabis to its recreational usages only, to the exclusion of its many health benefits, exploring the science is vital. By citing legitimate research studies and findings, and explaining the scientific processes at play when using cannabis, ads can debunk false myths while educating the public.
Tell a compelling, relatable story. Like all good advertising, the narrative is key to engaging audiences. Framing cannabis within the powerful context of a compelling story is a strong approach to making a memorable impact on consumers.
Wild West Advertising
Because cannabis is such a new industry, only recently becoming legal in many states (and countries), advertising agencies have been reticent to sign on with these companies. The lack of regular advertising standards means that cannabis advertising has been compared to the “wild west,” where anything goes. While some companies struggle to promote a more wholesome, consumer-friendly image of cannabis, marketing to broad audiences, other companies embrace stoner stereotypes and industry myths, often resulting in ads that depict unethical content.
An example of a warning letter the FDA sent to a CBD company making health claims
Unofficial social media ads may target underage customers, with slogans featuring symbols like Santa Clause, or presenting underage people in their ads next to cannabis products, as in a recent Instagram ad from one brand, Dogwalkers. The ad shows a person holding a pre-rolled joint on the beach with a caption that reads “let the good times (pre) roll.” The image also features young-looking surfers in the background, an implied invitation to underage consumers to sample these products.
Without regulation, businesses are also free to create advertisements rife with false claims. Vulnerable people, patients with chronic illnesses, senior citizens and others may be susceptible to the claims presented in these ads. The FDA has recently begun to crack down on this spread of misinformation, but putting in place industry-wide advertising standards would also have a strong effect.
Cresco Standards
Operating in nine states in the U.S., Cresco Labs is a vertically integrated, publicly traded company that has recently released a proposal for establishing marketing rules for the cannabis industry. The proposal, entitled “Responsible Advertising and Marketing Standards for the U.S. Cannabis Industry” outlines a vision to hold the U.S. cannabis industry to a higher professional and ethical standard than is the current norm, thus legitimizing the industry.
Some specific rules in the proposal stipulate that ads depicting over-consumption as a fun or desirable outcome should violate industry standards. Additionally, the widespread adoption of this proposal would ban any marketing approaches that target underage consumers, ensuring that companies are better able to enforce legal age restrictions.
The company, alongside other large cannabis organizations, has released this proposal as part of an attempt to normalize the industry, allowing it to bring in top ad companies to help promote their brands. While cannabis retains the pop culture imagery of stoner culture and its associations with reckless behavior and teenage cannabis usage, regular advertising sources will remain skeptical about getting involved.
Changing Tides
As the industry continues to evolve and expand, more regulation will be useful in terms of establishing dominant narratives to help redefine how cannabis appears in the popular imagination and what kind of clientele is attracted to cannabis products. But by redefining the acceptable standards of advertising, there is also a risk that cannabis will lose some of the intrigue and novelty that currently makes it a popular, trending topic.
Still, if rebranding campaigns can shift the story so that cannabis appeals to the masses, then everyone in the cannabis industry ultimately benefits.
While we’re pleased to report that 2020 is almost over, 2021 will be a mixed bag. New jurisdictions will open their doors to cannabis and consumption will continue to rise, but competition from new operators and illicit supplies will increase. As California’s cannabis industry matures and turns the page on a bizarre year, market uncertainty will linger as the pandemic drags on and overtaxation and regulation strangle profits. But let’s remember, cannabis has been cultivated for over 6,000 years and has withstood far worse—this market isn’t going anywhere and will continue to grow and become more impactful.
Access to Traditional Finance Services
The U.S. Senate will likely pass legislation providing cannabis businesses access to traditional banking and financing services. This will be a game changer for the industry. Valuations will go up. Increased liquidity will smooth transactions. Companies will look to affordable debt to expand their footprints and capacity to compete on a new scale. Full federal legalization could be a game changer if 280E tax restrictions are lifted and interstate and international cannabis trade open up, but the timing of this is hard to predict.
Continued Quarantine-Induced Consumption
Cannabis consumption will continue to increase as Californians seek to ease pandemic-related stress, temper quarantine conditions, and sample an eye-popping array of new products. Sophisticated consumers will be open to spending more on unique and niche products. But hemp-derived cannabinoids may present a new source of competition, especially if CBD remains unregulated. By the end of 2021, cannabis beverages will begin to compete with mainstream alcohol categories. Pharmaceuticals will increasingly take notice of this industry and the increasing share of consumers turning to plant-based remedies.
Ever More Cultivation Opportunities
In pursuit of revenue, agricultural counties will liberalize their policies on cannabis cultivation by permitting more acreage and streamlining permit processes. Neighborhood groups will push back, but policymaker concerns will be assuaged when they see cannabis farms operating innocuously (and sustainably) around the state. Advances in seed breeding, pest-and-disease control, outdoor growing techniques and odor abatement technology will help too.
New Retail
Cities and counties will revisit opening their borders to cannabis retail storefront and delivery as they attempt to fill budget gaps. Many cities will allow cannabis retail for the first time and/or expand the number of licenses available. These new dispensaries will provide a much-needed outlet for the influx of licensed flower and will continue to spur innovation and consumer education. But a “second wave” of retail speculators seems poised to let optimism override judgement, setting themselves up for failure or acquisition by incumbents.
Getting Social Equity Right
2021 will be a pivotal year for social equity, which will establish a foundation for a just cannabis economy. The industry will have to grapple with how to ensure that those most impacted by the criminalization of cannabis and most often excluded from traditional financing exposure are provided with equitable access to meaningful opportunities. As California’s regulated cannabis market grows, getting social equity right will be important if the industry is to firmly establish itself as an inclusive industry that addresses impacts on marginalized communities and responds to customer demands.
Formalizing Appellations
California’s new CalCannabis Appellations Program will provide cultivators and brands a way to credibly market the value of their unique growing regions and cultivation methods. These distinctions only apply to cannabis planted in the ground, excluding greenhouse and warehouse grows. The expectation is that high-end consumers, trained to recognize place-based designations and quality certifications in other products, will reward products that boast these designations. How many consumers will be willing to pay the premium and how long full implementation of the program will take, remains to be seen.
Prices May Begin to Drop
2020 was a great year for the few fully licensed cultivators in California permitted to sell to the regulated market. 2021 may be different. Numerous licensed cultivation projects will complete the permitting processes and come online next year. While growing demand may outpace supply at first, by Q3 supplies could swamp the market. Premium flower is perhaps an exception. Adding to the pricing pain, as always, is California’s illicit market, which will continue to undercut prices, as legal growers toil to comply with a labyrinth of state and local regulations. Nonetheless, cannabis will remain the most profitable crop on a per acre basis for some time.
Business Turmoil
The drop in prices coupled with continued high taxes and regulatory burdens will result in turnover of assets and businesses. Less efficient and inexperienced cultivators will struggle, many unable to ultimately withstand pricing pressure. Others will be hit by enforcement actions for failing to comply with California’s myriad regulations. Retailers, already burdened by punitive tax structures, real estate finance commitments and onerous local regulations, will need to be disciplined and have a clear strategy to address new competition.
Consolidation
Driven by business failures and renewed investor interest, California’s regulated cannabis industry may consolidate rapidly in the second half of 2021. Institutional finance will enter the space with a much more disciplined approach than prior capital sources. Traditional agricultural interests will invest in cannabis cultivation projects. Well-run retail chains will begin to outcompete, and then acquire, mom-and-pop competitors. Big brands will continue to expand their shelf space, relegating smaller competitors to niche and novelty status.
In short, the cannabis industry will continue to be highly dynamic, exciting, enticing and risky.
It was 1996. I was four years old. California Proposition 215 passed and for the first time, legal medical cannabis became available. I don’t remember it honestly, but that moment triggered a reckoning of outdated and ineffective efforts to control cannabis, which continues on November 3rd.
The moment in 1996 created for me and my generation of millennials a new, decriminalized lens for which to view cannabis and its potential. In my lifetime, from first experimenting with cannabis after high school and then earning my PhD in plant biochemistry, advancing cannabis research, to starting an agtech company dedicated to the genetic improvement of cannabis, we continue this march toward legalization. But another march hasn’t started yet.
The cannabis we consume today is still largely the same (albeit more potent today) as the cannabis that was legalized in 1996. There’s been little advancement in our scientific understanding of the plant. This can and should change. I believe the future and legitimacy of the cannabis crop in the medical field and in farmers’ fields is on the ballot this November.
Five states have cannabis on the ballot for November 3rd
In 33 states, medical cannabis is currently legal and in eleven of those, including my home states of Nevada and Washington, legalized adult-use recreational cannabis is generating millions in tax revenue every month. But compared to every other commercial crop, cannabis is still decades behind.
We are seeing a glacial cadence with cannabis research. As voters in five more states consider this November whether to legalize cannabis, that same tipping point we reached in 1996 comes closer to being triggered for cannabis research.
Here’s what cannabis scientists, like me, face as we work to apply real scientific methods to the long-neglected crop: I published one of the most cited papers on cannabis research last year, titled, Gene Networks Underlying Cannabinoid and Terpenoid Accumulation in Cannabis. But, as per university policy, we were unable to touch the plant during any of our research. We could not study the physical cannabis plant, extracts or any other substantive physical properties from the plant on campus or as a representative of the university. Instead we studied cannabis DNA processed through a third-party. Funding for the research came from private donors who were required to be unassociated with the cannabis industry.
While we were conducting our heavily restricted, bootstrapped cannabis research, the university lab in the next building over was experimenting with less restrictions on mice using other drugs: cocaine, opioids and amphetamines. (Quick note, marijuana is listed as more dangerous than cocaine, which is a Schedule II drug.)
I get it. Due to the federal prohibition on cannabis as a heavily regulated Schedule I drug, universities cannot fund research without the risk of losing all of their federal funding. While the USDA does not support research and SBIR grants are all but impossible, one government agency does allow research, from cannabis grown only in Mississippi. It’s the Drug Enforcement Agency (DEA) and any research conducted using its crop is as ineffective as you’re imagining. Relevant research is likely impossible using the crop which dates back to a 1970’s strain with a potency that’s about 30 percent of today’s commercial cannabis offerings.
To change this anti-research climate, do what those in California did with Prop 215 in 1996. Vote.
Dr. Jordan Zager, author and CEO of Dewey Scientific
Vote for legalization of cannabis if you’re in those five states where legalization is on the ballot; that’s Arizona, New Jersey, Montana, South Dakota and Mississippi. The more states that align with cannabis legalization, the stronger the case becomes for the federal government to reschedule the drug from a Schedule I controlled substance. Currently cannabis is listed as a Schedule I alongside heroin. The DEA claims cannabis has no currently accepted medical use and a high potential for abuse. Both are not true, just listen to the scientists.
Those outside of the five states putting cannabis on the ballot can still play a role in creating a Congress that is more receptive to cannabis reform. This Congress is the oldest, one of the most conservative and least effective in our country’s history. Younger, more progressive representation will increase our odds of advancing cannabis research.
Cannabis holds far too much possibility for us to allow it to be an unstudied “ditch weed.” THC and CBD are just two of nearly 500 compounds found in cannabis which, when scientifically scrutinized will harvest – I believe – vast medicinal and commercial benefits and the tax windfalls that accompany both. But first you have to vote.
If cannabis and your representatives are not on the ballot, do something millennials have built somewhat of a reputation for failing to do; pick up a phone and call your current representative. Tell them cannabis deserves scientific attention and investment. There’s too much potential in the cannabis plant to wait any longer.
According to a press release published earlier in October, Metrc has won the seed-to-sale traceability software contract for West Virginia. The West Virginia Department of Health and Human Resources, Bureau for Public Health, Office of Medical Cannabis (OMC) made the announcement on October 21.
According to that press release, the main focus for the state’s traceability program is “helping OMC regulators ensure no illicit cannabis products are sold in the medical cannabis market, and also that no legal medical cannabis products are sold unlawfully.”
Regulators in West Virginia are still on schedule to open the medical cannabis market as soon as next year, according to Jason Frame, OMC director. “This is an important step to make certain medical cannabis is available only to West Virginians with serious medical conditions and to prevent diversion of products in West Virginia,” says Frame. “While the COVID-19 pandemic has put many industries across the country on hold, we’re proud to say that it has not stopped West Virginia from meeting its deadlines and laying the groundwork for a safe, regulated medical cannabis market.”
Regulators at the OMC are still working on scoring processing and retail license applications. The OMC says they will begin the process of issuing patient cards in the spring of 2021.
As of this writing, the United States Food and Drug Administration (FDA) has approved GW Pharma’s CBD drug Epidiolex for treating profound refractory pediatric epilepsy syndromes (Dravet syndrome and Lennox Gastaut syndrome) as well as for treating seizures associated with tuberous sclerosis complex (TSC) in patients one year of age or older. The product is a very simple, orally-administered formulation comprised of 100mg/ml cannabidiol (CBD), dehydrated alcohol, sesame seed oil, strawberry flavor and sucralose – basically, an alcohol-based solution with sesame seed oil to help solubilize the CBD oil, flavoring and sweetener.
On April 6th, 2020 GW Pharma performed a regulatory miracle when they succeeded in convincing the Drug Enforcement Administration (DEA) to deschedule Epidiolex (i.e., remove it from the Schedule 1 and Schedule 5 lists of substances that the agency regulates due to concerns regarding safety, potential for abuse or both) for all indications – including indications for which it has not yet been approved by the FDA.1 The benefit to GW of having their product descheduled is incalculable. This status change removed potential barriers to insurance reimbursement and made the need to set up and administer an expensive REMS2 drug safety program less likely. In part because of this regulatory coup d’état, the drug recently posted yearly earnings of nearly $300 million.
It is important to note that the DEA descheduled the Epidiolex formulation and not cannabis-derived CBD itself. Thus, GW Pharma is now in the enviable position of being the only company that can legally sell cannabis-derived CBD. More importantly, because the DEA descheduled the formulation and not the active ingredient, other companies who wish to market cannabis-derived CBD pharmaceutical formulations will have to repeat whatever it is that GW did to get Epidiolex descheduled.3 The DEA effectively gave the company a huge head start with respect to competitors who are developing other cannabis-derived CBD formulations that would compete with Epidiolex. That advantage will remain in place unless and until cannabis-derived CBD itself is descheduled or cannabis is legalized at the federal level.
GW Pharma’s CBD drug Epidiolex, which is FDA-approved to treat profound refractory pediatric epilepsy syndromes
GW Pharma’s attorneys demonstrated considerable virtuosity in devising this approach. However, there is another aspect of the GW Pharma story – one that could have profound implications for the exploding CBD consumer packaged goods (CPG) industry. The Federal Food, Drug, and Cosmetics Act4 (FFDCA) prohibits the introduction into interstate commerce of any food to which has been added an approved drug or a drug for which substantial clinical investigations have been instituted and made public.5 Because CBD was and is still the subject of clinical trials run by GW Pharma and others, even hemp-derived CBD is currently illegal to use as a food additive or dietary supplement under the FDCA
The FDA has recently re-started the public commentary stage of a long process that will hopefully result in the creation of a regulatory pathway for CBD to be used as a food additive – something that would seemingly be a straightforward matter given the copious amounts of safety data being generated from all of GW Pharma’s clinical trials. However, as long as the FDA continues to drag its feet in providing a regulatory pathway for CBD CPG products, CBD, regardless of its source, will remain illegal to use as a food additive or supplement under either the CSA or the FFDCA despite the existence of safety data obtained through the Epidiolex clinical trials. If, as many people in the industry anticipate, the agency decides to begin enforcement action, this could have a hugely negative impact on the industry.
In addition to the potentially disastrous effect that federal law could have on an important new industry, the federal regulatory scheme introduces unnecessary regulatory complexity and cost by imposing two different regulatory schemes depending on the source of the CBD. CBD derived from hemp is chemically identical to CBD derived from cannabis. Despite that identity, the 2018 Farm Bill nonsensically exempts only hemp-derived CBD from the Controlled Substances Act. If a regulatory pathway is created for hemp-derived CBD, but the DEA insists on maintaining cannabis-derived CBD as a schedule 1 substance, then the same molecule will be subject to two different regulatory schemes. This scenario would require tracking and certifying CBD sources and thereby impose regulatory and economic burdens that are entirely unnecessary from a public health point of view.
An alternative, economically disastrous scenario: given the pharmaceutical industry’s formidable lobbying power, it is entirely possible that the FDA could decide to limit the use of CBD exclusively in prescription drug formulations. This could kill the entire US hemp CBD CPG industry, currently estimated to reach $22 billion by 2022.6
Overall, the current state of affairs is unfair, expensive, uncertain and entirely unworkable over the long term. The CSA must be amended, ideally to deschedule both hemp and cannabis entirely, but at least in the short term, to deschedule CBD and preferably all non-THC cannabinoids regardless of their source. Further, the FDA must provide a regulatory pathway to allow the use of low doses of cannabinoids shown to be safe, either by existing clinical trial data or future testing pursuant to the NDIN submission process.
A 2019 Gallup poll found that 14% of Americans – 1 in 7 – use CBD products.7 The demand is there, the industry is thriving, and adequate safety data exists to justify a regulatory system that allows low-dose over the counter CBD products provided those products are produced using Current Good Manufacturing Practices (CGMPs) for food and dietary supplement manufacturing prescribed by the FDA and that such products undergo regular testing that demonstrates they are safe, unadulterated and accurately labeled. It is time for the industry to collectively fund a New Dietary Ingredient Notification (NDIN) submission that would provide safety data sufficiently compelling to force the FDA to either recognize CBD and other non-THC cannabinoids as being GRAS substances regardless of their source, or in the alternative create a regulatory path for CPG products containing low-doses of CBD and other non-THC cannabinoids.
Editor’s Note: The opinions expressed in this publication are those of its author. They do not purport to reflect the opinions or views of the Cannabis Industry Journal, its editorial staff or its employees.
References
Clincialtrials.gov lists 256 different clinical trials in which Epidiolex has been, is being or will be tested for a wide variety of other indications, including but not limited to opioid use disorder, several types of prostate cancer, alcohol use disorder, musculoskeletal pain, and a host of others.
REMS – risk evaluation and mitigation strategy – are drug safety programs that the FDA requires in cases where mediations pose serious safety concerns with respect to potential abuse and other adverse effects.
Exactly what they did isn’t clear, and won’t be for a long while given the snail’s pace at which FOIA requests are filled.
Title 21 United States Code Chapter 9
Title 21 United States Cod Chapter 9, Sections 331(ll), 342(a)(1) and Section 342(d)(f)(1)
“Exclusive: New Report Predicts CBD Market Will Hit $22 Billion by 2022” Rolling Stone Magazine, September 11, 2018, citing cannabis industry analysis from the Brightfield Group.
Private labelling, or white labelling, is a popular option for brands looking to enter the CBD space. This practice is where a product is manufactured by one company but branded, marketed and sold by another.
There are several companies that specialize in manufacturing end-to-end finished CBD products. They commonly provide third-party test results, certificates and data to verify the purity and potency of products created. Technically, all new brands need to do is place their label on the package and start selling! However with any new venture, establishing a successful private label CBD brand will inevitably mean various challenges need to be overcome.
Securing Quality Sources of CBD
Finding the right partners to work with is a must. The best way to source credible and trustworthy suppliers and manufacturers is to look for certifications and audits from third-party agencies. These include the Global Food Safety Initiative (GFSI), the Safe Quality Food (SQF), the United States Department of Agriculture’s (USDA) organic certification program and others.
The USDA organic certification program is a rigorous multi-step audit process to increase supply chain sustainability. Organic certification is a form of elective, self-regulation for manufacturers which consumers have eagerly welcomed into the marketplace. Look for the USDA organic seal to help identify which manufacturers are trustworthy and can produce a range of organic products.
From a consumer perspective, certifying your products as organic is an additional way to provide both supply chain transparency and increase confidence when trying new CBD products. It also provides a form of quality assurance to skeptical consumers, especially those who avidly read product labels prior to making a purchasing decision. Members of this “label reader” demographic will consistently choose organic products for the quality and transparency they provide with pure and natural ingredients.
Creating a Unique Product
Innovation and creativity will continue to be important differentiators due to the highly competitive nature of the CBD marketplace. New ingredient innovations such as water dispersible materials are big game-changers. From chewing gum to energy drinks, the opportunities for new and unique CBD products under your own private label are limitless.
Just some of the many hemp-derived CBD products on the market today.
There are only a handful of CBD brands who are willing, or even able, to be certified organic today. USDA certification is an opportunity for brands looking to adapt to changing consumer preferences, diversify their product offerings and invest in supply chain transparency.
In the past, product differentiators involved third-party lab testing or providing COAs — today that’s just industry standard. The USDA organic seal is becoming one of the hemp industry’s most coveted certifications because it is a product differentiator.
Building Credibility
Trustworthiness, transparency and traceability are important factors for consumers to consider when shopping for products. These factors should also be considered when producing products and while vetting vendors, partners, stakeholders and supply chain suppliers.
Credible certifications allow consumers to make informed decisions while feeling confident that they are purchasing products from reputable sources. Research has shown that today’s CBD market lacks credibility while consumers are desperately seeking comfort and are eager to purchase from trustworthy brands.
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It sounds like the partnership involves Shimadzu supplying MoCann with instruments and supporting their testing efforts with training, method development and maintenance, though the press release does not mention any details.
