Tag Archives: analytics

August 5, 2019

Poland Pushes Forward On Reform

By Marguerite Arnold

Given all the fuss about newly opened markets in Europe of late (see all the hullabaloo recently in the UK), it would be remiss for anyone in the industry to forget about Poland.

The Eastern European country that shares a large part of its border (if not recent history and long cultural influence) with Deutschland has been proceeding slowly into the cannabis space for the last couple of years.

There are a couple of similarities (and differences too) about the market development in the country to its Teutonic sister to the West as well as the emerging fight over access that is sparking patient revolutions all over the continent now.

A Brief History Of Polish Cannabis Reform

Like other culturally conservative places (see state reform in the United States in places like Georgia), Poland has moved towards reform in a way that may make political sense, but has left patients in much the same boat as British ones. Reform began happening without access as of late 2017.

Poland, or so the joke goes in Germany, is Deutschland’s “trailing sister,” on most things, and cannabis reform in some ways, is absolutely following that pattern. But it is not exactly analogous, starting with patient access. In fact, the first opening of the market did not touch import much less cultivation. It only authorized patients to cross borders in search of their medication. No matter the high cost involved. And of course, the still dodgy proposition of returning across a border with a highly stigmatized narcotic product.

Fast forward a year? Many of the major Canadian cannabis companies had achieved some sort of import (mostly of small amounts of the drug and mostly to single hospitals). See the announcement of Aurora last October on the same day that the Polish government announced a change in the law that they had imported in bulk to a hospital.

But what is going on now, particularly with a growth in acceptance of the medicinal impact of the drug across Europe? And will the Poles, like the Germans, launch a domestic cultivation bid anytime in the near future? Not to mention learn the lessons that so far have continued to stymie German domestic cultivation as well as frustrate a smooth supply chain if not operations on the ground?

The Market Is Coalescing

According to Andrew Makatrewicz de Roy, managing director of Bearstone Global, a market research and investigative firm moving into the cannabis space, Poland has one of the more progressive laws in Europe, but still is lagging behind other countries in terms of organisation and a political lobbying movement.

“There is a lot of vibrancy in the market, but we want to make sure that there is an initial forum where the market can meet and discuss the industry here”.There are also a few (low volume) transactions taking place.

However, as in other places (see the UK in particular), there is a lot of heat if no fire yet behind the scenes. Both individuals and companies are starting to appear who will help build a wider ecosystem in the cannabis space.

As in other countries in Europe, despite the market potential, there is still a general political lag in further development of the industry. Perhaps because of complications in the German market. And almost certainly because of complications with German reform and its own cultivation bid. There have been rumours of a Polish bid circulating for at least a year. Licensed cultivation is beginning to take place.

In response, Makatrewicz de Roy is moving to establish one of the first industry conferences in the country in October. In late July, he also held the first precursor to the same – an online streamed event that attracted 70 major thought leaders from the industry including many members of the political class, producers and distributors (including some of the biggest Canadian ones), doctors and patients.

“We want to build an ecosystem,” de Roy said. “There is a lot of vibrancy in the market, but we want to make sure that there is an initial forum where the market can meet and discuss the industry here”.

August 1, 2019

CBD Health Claims Spur FDA Warning & Product Seizure Threats

By Greg Boulos

3 Comments

The 2018 Farm Bill gave cannabis businesses around the country a legal path to market and sell hemp and hemp-derived products. Despite the groundbreaking law, several regulatory uncertainties remain. The FDA has been a source of many of those uncertainties, but recent action suggests that the agency plans to impose heavy burdens on companies selling CBD products that claim to provide health benefits. Recently, the FDA held a public hearing during which it signaled that health claims associated with cannabis-related products was a primary concern. Congress subsequently pressured the FDA to develop a regulatory framework for the cannabis industry and the agency announced that it was expediting its efforts to do so, promising an update on its progress by this fall.

Then, on July 22, the agency issued a warning letter to Curaleaf regarding its claims that several of its products provide specific health benefits. The agency included a threat to seize Curaleaf’s products if the issues raised in the letter are not resolved. How the FDA ultimately regulates cannabis products going forward will have a significant impact on the industry as a whole. Indeed, the agency has significant powers over product manufacturers, including the ability to seize products through the U.S. Marshalls. This article will delve into the specifics on the FDA’s warning letter and address how manufacturers can limit the risks associated with making health-related claims.

The FDA’s Warning: Beware of “Unsubstantiated” Health Claims

The FDA’s letter explained that it determined several of Curaleaf’s CBD products “are unapproved new drugs sold in violation of sections 505(a) and 301(d) of the Federal Food, Drug, and Cosmetic Act (FDCA).” The letter goes on to say that one of Curaleaf’s pet CBD products “are unapproved new animal drugs that are unsafe.” Curaleaf has 15 days to respond to the agency’s letter. The agency cited the following health claims as problematic, among others.

“CBD has been demonstrated to have properties that counteract the growth of [and/or] spread of cancer.”
“CBD was effective in killing human breast cancer cells.”
“CBD has also been shown to be effective in treating Parkinson’s disease.”
“CBD has been linked to the effective treatment of Alzheimer’s disease ….”
“CBD is being adopted more and more as a natural alternative to pharmaceutical-grade treatments for depression and anxiety.”
“CBD can also be used in conjunction with opioid medications, and a number of studies have demonstrated that CBD can in fact reduce the severity of opioid-related withdrawal and lessen the buildup of tolerance.”
“CBD oil is becoming a popular, all-natural source of relief used to address the symptoms of many common conditions, such as chronic pain, anxiety … ADHD.”
“What are the benefits of CBD oil? …. Some of the most researched and well-supported hemp oil uses include …. Anxiety, depression, post-traumatic stress disorders, and even schizophrenia …. Chronic pain from fibromyalgia, slipped spinal discs . . . Eating disorders and addiction . . ..”
“[V]ets will prescribe puppy Xanax to pet owners which can help in certain instances but is not necessarily a desirable medication to give your dog continually. Whereas CBD oil is natural and offers similar results without the use of chemicals.”
“For dogs experiencing pain, spasms, anxiety, nausea or inflammation often associated with cancer treatments, CBD (aka cannabidiol) may be a source of much-needed relief.”

The letter explicitly warned, “Failure to correct the violations promptly may result in legal action, including product seizure and injunction.” The FDA has a history of seizing products it deems non-compliant with its regulations. Recently, the U.S. Marshals, at the direction of the FDA, seized 300,000 units of a cosmetic company’s product. The impact of such a seizure on a business’ profits and operations is staggering. FDA action also has a direct impact on publicly traded cannabis companies’ stock price. When news of the FDA’s Curaleaf letter circulated, Curaleaf shares plunged 8%.

Balancing Regulatory Risk and Business Objectives

While the FDA’s letter appears to create a new risk for the cannabis industry, the stock market’s reaction is arguably overblown. The fact that the FDA would question a product’s ability to kill cancer cells is not surprising. I am not familiar with Curaleaf’s research efforts and it is not my goal to pass judgment on their claims. Rather, my point is that manufacturers need to make sure legitimate scientific studies underpin all of their health claims, regardless of the industry. Manufacturers will never be able to avoid regulatory scrutiny or even litigation regarding their health claims entirely. Instead, cannabis companies should take steps to ensure that they can credibly respond to regulatory scrutiny or present strong defenses in potential litigation. Establishing a robust research department is a start. But manufacturers must develop institutional knowledge of the most cutting-edge research regarding their products.Developing in-depth institutional knowledge regarding the state-of-the-art scientific research on your product is a must.

Manufacturers that market products primarily for their health benefits should consider working with clinical researchers to study their products. There should be written policies and guidelines, as well as employee training, for conducting these studies and dealing with researchers in order to protect the quality of the study. For purposes of mitigating regulatory and litigation risks, the perceived quality of these studies can be just as important as their actual quality. Regulators and plaintiff’s attorneys can easily misinterpret (sometimes intentionally) written communications between a manufacturer and researcher in ways that suggests a particular study was outcome-driven and not a legitimate scientific undertaking. Manufacturers should consult with attorneys experienced in defending product liability and mass tort litigation so that their labeling and research practices are based on historical examples of successful (and sometimes, unsuccessful) product manufacturers.

Key Takeaways

Manufacturing consumer products comes with substantial litigation and regulatory risks. There are several historical and current examples of product labels, health claims, and warnings leading to thousands of lawsuits filed simultaneously across the country against a single manufacturer. Fees associated with defending against even meritless claims can force a manufacturer into bankruptcy. The regulatory risks can also have devastating effects on the day-to-day business operations of any manufacturer. Eliminating these risks is impossible, but addressing them upfront before a product launch, regulatory crackdown, or lawsuit is considerably less expensive than dealing with costly litigation or government seizure of entire inventories. Developing in-depth institutional knowledge regarding the state-of-the-art scientific research on your product is a must. Also, consider working with a clinical researcher to support any claimed health benefits or even discover new health benefits associated with your product. Finally, consult a lawyer with experience in product liability and mass tort litigation to strengthen your policies and procedures regarding research, develop credible health claims, and craft strong warnings.

July 30, 2019

Sweden Joins Italy In Path To Defining CBD Oil Regulations

By Marguerite Arnold

2 Comments

The highest court in Sweden has weighed in on the novel food, and the darling of the Swiss marketplace, CBD conversation. Further, it has done so in a move that seems predetermined to push the so-far escalating novel food debate EU-wide. Along, of course, with what constitutes “narcotic” cannabis.

Namely, Sweden’s highest court ruled in June that CBD oil with any concentration of THC falls under the narcotic jurisdiction.

Sound confusing? Welcome to the world of every CBD producer and purveyor on the “right” side of the Atlantic.

Beyond The Lingo and Legal Mumbo Jumbo

When one follows the logic, there is one, hidden in the Swedish meatball of careful legal wording. Here is a translation, more or less of what the court intended.

The first is that the Swedes, along with the Italians (and expect this attitude to be reflected all over Europe) accept that cannabidiol when it comes from hemp, if not CBD oil derived from the same, generally, is excluded from the definition of cannabis (as a narcotic). Therefore it is not a narcotic drug.

However, according to the court, the loose definitions of what “CBD oil” is both legally and in the marketplace, no longer applies if the plant has been converted into a preparation containing THC. This is a clear shot across the bow of the “Cannabis Lite” movement that has been so popular across the continent for the last year or so and has absolutely electrified certain regions (see not only Switzerland but the UK and Spain).

This has added to the sky-high evaluations of the cannabis industry (or even the CBD part of it) in certain industry predictions, rosy scenarios and forward-looking statements.

However, in a nod to reality, the court also recognized that there is an exemption for trace amounts of CBD in the current frameworks, although it is indeterminate. In other words, this is a move to force regulators to determine what trace levels of THC are permitted. And further, to force regulation and licencing of the so-far, fairly free-wheeling industry that hoped, much like Holland, to establish itself in the grey spaces between the regulatory schematic of Europe.

Just some of the many CBD products on the market today.

No dice. See Holland of late. But also see Italy, Austria and Germany.

For those who still held out a vague dream of hope that this whole issue was going to go away, or get swept under the carpet of anti-regulatory Brexit mania (in the British case), think again.

In the Swedish situation, much like the Italian CBD caper, the individual at the heart of the court case was a man who escaped a minor drug charge for possession of CBD oil. However, the message is clear: Large scale distribution of CBD oil with “undeterminable” levels of THC (essentially all of it in the market until the rules are set), is courting a criminal drugs charge.

Look for licensing definitions soon.

What Does This Say About The CBD Future In Europe?

Much of this debate is also caught up in larger issues, namely labelling. The British, for example, have just seen recalls at some of the largest supermarkets in the country because of the same. It is a hot topic in several places.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Europeans, in general, and this includes the British, are generally also horrified at how Americans in particular, consume food and other products exposed to chemicals they know are toxic. However common chlorinated chicken is in the U.S., for example, this is a discussion as toxic to all Europeans, including the British, as well, chemically treated anything.

This is also a reflection of the much “greener” lifestyle Europeans aspire to lead (even with bizarre gross-outs like “fatbergs” in the Victorian recesses of London sewers). Even if they have not managed it yet, here. Climate change denial, especially in mostly air-conditioner free Europe, and especially this summer, is a rare concept indeed.

The novel food issue where it crosses with cannabis, in other words, has just popped up again, in Sweden. And given its proximity to not only recent legal decisions on the same, especially by their neighbors, if not on the calendar, the industry and all those who hope to chart its projections if not successfully surf its market vagaries, need to take note if not adjust accordingly.

July 19, 2019

Sustainable Plastic Packaging Options for Your Cannabis Products

By Danielle Antos

7 Comments

A large part of your company’s brand image depends on the packaging that you use for your cannabis product. The product packaging creates a critical first impression in a potential customer’s mind because it is the first thing they see. While the primary function of any cannabis packaging is to contain, protect and identify your products, it is a reflection of your company in the eyes of the consumer.

For all types of businesses across the US, sustainability has become an important component for success. It is increasingly common for companies to include sustainability efforts in their strategic plan. Are you including a sustainability component in your cannabis business’ growth plan? Are your packaging suppliers also taking sustainability seriously? More and more, consumers are eager to purchase cannabis products that are packaged thoughtfully, with the environment in mind. If you are using or thinking about using plastic bottles and closures for your cannabis products, you now have options that are produced from sustainable and/or renewable resources. Incorporating sustainable elements into your cannabis packaging may not only be good for the environment, but it may also be good for your brand.

Consider Alternative Resins

Traditionally, polyethylene produced from fossil fuels (such as oil or natural gas), has been used to manufacture HDPE (high density polyethylene) bottles and closures. However, polyethylene produced from ethanol made from sustainable sources like sugarcane (commonly known as Bioresin) are becoming more common.

Unlike fossil fuel resources which are finite, sustainable resources like sugarcane are renewable – plants can be grown every year. For instance, a benefit of sugarcane is that it captures and fixes carbon dioxide from the atmosphere every growth cycle. As a result, production of ethanol-based polyethylene contributes to the reduction of greenhouse gas emissions when compared to conventional polyethylene made from fossil fuels, while still exhibiting the same chemical and physical properties as conventional polyethylene. Although polyethylene made from sugarcane is not biodegradable, it can be recycled.

Switching to a plastic bottle that is made from ethanol derived from renewable resources is a great way for cannabis companies to take positive climate change action and help reduce their carbon footprint.

For instance, for every one ton of Bioresin used, approximately 3.1 tons of carbon dioxide is captured from the atmosphere on a cradle-to-gate basis. Changing from a petrochemical-derived polyethylene bottle to a bottle using resins made from renewable resources can be as seamless as approving an alternate material – the bottles look the same. Ensure that your plastic bottle manufacturer is using raw materials that pass FDA and ASTM tests. This is one way to help reverse the trend of global warming due to increasing levels of carbon dioxide (CO₂) in our atmosphere.

PET bottles derived from 100% recycled post-consumer material.

Another option is to use bottles manufactured with recycled PET (polyethylene terephthalate). Consisting of resin derived from 100% recycled post-consumer material, it can be used over and over. This is an excellent choice because it helps keep plastic waste to a minimum. Regardless of the resin you select, look for one that is FDA approved for food contact.

Consider Alternative Manufacturing Processes

Flame Treatment Elimination

When talking about plastic bottle manufacturing, an easy solution to saving fossil fuels is eliminating the flame treatment in the manufacturing process. Historically, this process was required to allow some water-based adhesives, inks, and other coatings to bond with HDPE (high density polyethylene) and PP (polypropylene) bottles. Today, pressure-sensitive and shrink labels make this process unnecessary. Opt out and conserve natural gas. For instance, for every 5 million bottles not flamed approximately 3 metric tons of CO₂is eliminated. This is an easy way to reduce the carbon footprint. Ask your cannabis packaging manufacturer if eliminating this process is an option.

Source Reduction (Right-Weighting)

When considering what type and style of bottle you want to use for your cannabis product, keep in mind that the same bottle may be able to be manufactured with less plastic. A bottle with excess plastic may be unnecessary and can result in wasted plastic or added costs. On the other hand, a bottle with too little plastic may be too thin to hold up to filling lines or may deform after product is filled. Why use a bottle that has more plastic than you actually need for your product when a lesser option may be available? This could save you money, avoid problems on your filling lines, and help you save on your bottom line. In addition, this will also help limit the amount of natural resources being used in production.

Convert to Plastic Pallets

If you are purchasing bottles in large quantities and your supplier ships on pallets, consider asking about plastic pallets. Reusable plastic pallets last longer than wood pallets, eliminate pallet moisture and improve safety in handling. They also reduce the use of raw materials in the pallet manufacturing process (natural gas, metal, forests, etc.) aiding in efforts towards Zero Net Deforestation. And, returnable plastic pallets provide savings over the long term.

If You Don’t Know, Ask Your Cannabis Packaging Partner

It is important to find out if your plastic packaging partner offers alternative resins that are produced from renewable sources or recycled plastics. It is also prudent to partner with a company that is concerned about the impact their business has on the planet. Are they committed to sustainability? And, are they eliminating processes that negatively affect their carbon footprint? What services can they provide that help you do your part?

When you opt to use sustainably produced plastic bottles and closures for your cannabis products, you take an important step to help ensure a viable future for the planet. In a competitive market, this can improve the customer’s impression of your brand, increase consumer confidence and help grow your bottom line. Not only will you appeal to the ever-growing number of consumers who are environmentally-conscience, you will rest easy knowing that your company is taking action to ensure a sustainable future.

July 17, 2019

The Face Of Cannabis Education In Europe

By Marguerite Arnold

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More than a few cannabis “education companies” – mostly from Canada and the U.S. but some with Israeli ties, plus German and British efforts have targeted Europe as the next logical expansion plan in their global roadmap.

These include most recently Cannvas Medtech Inc., and several initiatives funded by Canopy Growth, including teaching children about the drug. It also includes training programs for frontline staff, launched by Organigram (although in this case it appears to be geared towards “brand education.”)

There are also doctor training programs launching in the UK.

In Germany, there are several efforts underway, helmed by both doctors and cannabis advocates generally, in several cities around the country.

But how effective is all of this “education” in both preventing illegal use, and promoting legitimate sales?

Particularly if such “education” platforms are exported from a foreign market for use in Europe?

Education Is Desperately Needed, But So Is Channel Penetration

Nobody is arguing that “education,” as well as trials and more information for payers and doctors are not required. The problem is that some education is more effective than other campaigns. And most of the talk in most places is more a discussion of the need for further regulatory reform, more trials and more investigation.

That has to get paid for somewhere.

That, at least in Europe is also tricky, as both early educational movers Weedmaps and Leafly have both found out, especially in medical only markets in the EU. Why? There are also highly limited opportunities for advertising either a drug, or to doctors.

Different Regulatory Environments Cause Bigger Issues

Even in Canada and the United States, there is an ecosystem of supplying the demand that has very much grown up customized by the strange paths to reform if not the first mover discussion.

That is not going to be the case in Europe, which in effect creates a brand-new ecosystem to educate, with new players, and every ecosystem participant group has a different kind of educational needs.

Here is one example of where this shows up. So far, in most countries, doctors are still highly resistant to prescribing the drug. Nurses, on the other hand, in both the United States and Canada at least, have proven to be a much more reliable source of converts for the cannabis cause. That approach of course is not possible in places like Germany where only doctors may issue prescriptions, including of the cannabis (and narcotic) kind.

Access issues also play a big role in just about every country- from cost to privacy. And on the privacy front, it is not just foreigners who are getting used to new rules. So are German doctors.

The pharmacy discussion is also very much in the room – and this is not “just like” approaching a “dispensary” from North America. They are regulated chemists. Which causes a whole new set of issues and a serious need for new kinds of educational materials.

In Germany, for example, pharmacists are being recruited and trained by not only staff recruiters specializing in the same, but also sent on special training courses funded by the big Canadian companies (Tilray being the noticeable one recently). The brick and mortar vs. online discussion is also a big topic across Europe. Notably, where it is allowed and where it is, as in Deutschland, verboten.

And, of course, the big green giant in the room everywhere in Europe, in particular, is payer/insurance approvals, which are based on a kind of education called proven medical efficacy.

And that, so far, is in markedly short supply.

In the UK, it is so far the main reason that NHS patients (for example) cannot access coverage for the drug to treat conditions like chronic pain.

In the meantime, the most widespread “education” that is going on, is still mostly at the patient level. Especially when patients sue their insurers, or lobby doctors to prescribe.

The cannabis industry may be maturing, in other words, to be able to answer these questions – but there is also clearly a long way to go.

July 17, 2019

Corporate CBD Production Gets Underway in UK

By Marguerite Arnold

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Any thought that established British and Canadian growers were not already cooperating and in the throes of establishing a UK cannabis production base was put to bed in early July.

Namely, the news that Sundial, an Alberta based Canadian company, is buying Bridge Farms, the winner of the Overall UK Grower of the Year Award in 2017, is a sign that the age of British cannabinoid production (and in bulk) is here. The agriculture group has a 75-acre production facility in Lincolnshire (strategically on the border with Norfolk) and a recent ₤18 million equity injection.

This also means that large-scale CBD production in the UK is now underway with authority.

What it also means, however, is that the winds of trade, even if historically, are already cultivating some interesting partners as the entire British cannabis discussion gets underway.

Sundial Growers also almost simultaneously filed documents to list on the Nasdaq in the U.S. In this, they look remarkably similar to Tilray.

British Sugar Is Now Not The Only Game In Town

The links to the cannabis industry in this part of the UK are not new. Namely, the county of Norfolk (the east-coast “bump” of the British coastline just south of Lincolnshire) is home to British Sugar, the cultivator for GW Pharmaceuticals cannabis crop.

This part of the world is also historically associated not only with major international British trade, but in the past at least, of the German kind in particular. See the port of Kings Lynn and the Hanseatic trading route that put the eastern town on the global shipping map until the advent of the railroads in the UK leached its importance south, to London in the 19th century.

Foreign investment in agriculture, in other words, in this part of the world is not new. Nor is shipping the final product elsewhere.

What Does This Mean For The British Market?

That is an interesting question on the advent of a potential Brexit. Is this newly constructed agricultural centre designed, like Canopy’s newest hempire in New York State, for domestic consumption, and-or overseas trade?

For that reason, a fully automated CBD production facility in such a strategic and historic part of the country seems to indicate the commercial production of CBD has begun at a level virtually unseen in any other European country so far. And further, that its backers have an international, not just domestic market, in mind.

What Does This Mean For the European Market?

Unless the UK is planning on eviscerating all worker safety and pay regulations, it is unlikely that British-grown cannabis will be price competitive with what is going on in Europe right now. The German market, in fact, is a very good precursor to the kinds of growing pains the UK is likely to see in this regard.

Exports, in other words, are highly unlikely, at least to Europe.

What this does mean however, is that licensed producers, with international roots and global financing, are clearly moving into the more or less corporate production market that is slowly getting going in Britain.

And just like elsewhere, post Canada, there is no chance, at this point at least, for any “mom and pop” industry to develop.

Given a lack of patient access at this point that is also not likely to fly politically for long.

Regardless, as of the summer of 2019, there are beginning to be the signs that large scale production of both THC and CBD, is getting going in Britain.

No matter where their customers are located.

July 11, 2019

Soapbox

Medical Cannabis in Georgia: Federal Policy Effects on State Industries

By Reggie Snyder

2 Comments

Under the U.S. Drug Enforcement Administration’s (DEA) Controlled Substance Act (CSA), drugs are classified into five distinct schedules depending upon their acceptable medical use and their overall potential for abuse or dependency. The DEA currently lists cannabis as a Schedule I drug, which the CSA defines as drugs having no currently accepted medical use and a high potential for abuse. It appears, however, that the DEA may soon reconsider its current Schedule I classification of cannabis.

This article considers how the DEA’s potential reclassification of cannabis potentially could affect Georgia’s medical cannabis industry. Specifically, the article discusses: (1) how Georgia medical cannabis distributors would operate within this new regulatory framework; (2) how this change would affect registered Georgia patients who are either currently purchasing medical cannabis or are planning to do so; and (3) whether this reclassification would cause big pharmaceutical companies to enter Georgia’s medical cannabis market, and if so, how.

The DEA’s Reclassification of Cannabis Would Likely Affect the Regulatory Framework of Georgia’s Medical Cannabis Industry

On April 2, 2019, Georgia became the 34th U.S. state to legalize cannabis for medicinal use when the Georgia Legislature passed House Bill 324 (“HB 324”), which recently took effect on Monday, July 1, 2019. In Georgia, medical cannabis is defined as a “low-THC oil” that contains 5% or less of tetrahydrocannabinol (THC)—the psychoactive chemical in cannabis that causes a “high.”

If the DEA reclassifies cannabis, the regulatory framework of Georgia’s medical cannabis industry under HB 324 would likely be affected. For instance, depending on how the DEA elects to reclassify cannabis, low-THC oil products manufactured and sold in Georgia could become subject to the U.S. Food and Drug Administration’s (FDA) costly, complicated and time-consuming drug approval process. Then, any low THC oil products that the FDA approves will be subject to federally mandated quality, efficacy and potency standards for FDA-approved drugs. Also, any federal standards that stem from the DEA’s reclassification of cannabis will trump any conflicting provisions in HB 324 or any other conflicting rules, regulations or procedures established by the Georgia Access to Medical Cannabis Commission (GAMCC), the seven member state agency responsible for promulgating and implementing the state-based rules, regulations and procedures necessary to produce and distribute low-THC oil in Georgia, and the Georgia State Board of Pharmacy (Pharmacy Board). However, even if the DEA reclassifies cannabis, the following state regulatory framework established by HB 324 will remain unaffected:

The GAMCC will likely continue to oversee the state’s medical cannabis industry.
The following two different types of dispensary licenses issued under the legislation will still likely remain: retail outlets (issued by the GAMCC) and pharmacies (issued by the Pharmacy Board).
Licensed dispensaries will still likely not be located within a 1,000-foot radius of a school or church, and licensed production facilities will still not be located within a 3,000-foot radius of a school or church.
Pharmacists who dispense low-THC oil will still likely have to review each registered patient’s information on the state’s Prescription Drug Monitoring Program (PDMP) database to confirm that they have been diagnosed with one or more of the 17 approved conditions and diseases. The legislation does not require retail outlet dispensaries to review patient information on the PDMP database or employ a pharmacist to dispense the drug.
Registered patients will still likely be prohibited from vaping low-THC oil or inhaling it by any other electronic means. The legislation does not expressly prohibit the use of other, non-electronic delivery methods of low THC oil such as pills or nasal spray.
All licensed dispensaries (and all licensed production companies) will still likely be subject to an “on-demand” inspection when requested by the Georgia Bureau of Investigation (GBI), the GAMCC, the four-member Medical Cannabis Commission Oversight Committee (MCCOC), or local law enforcement. The GAMCC and the Georgia Drugs and Narcotics Agency (GDNA) will also still likely be able to conduct one, annual inspection of dispensary locations. And, upon request, licensed dispensaries will still likely be required to immediately provide a sample of their low-THC oil for laboratory testing to the GBI, GAMCC, MCCOC, GDNA or local law enforcement.
All licensed dispensaries (and all licensed production facilities) will still likely be required to utilize a GAMCC-approved seed-to-sale tracking software.
All licensed dispensaries (and all licensed production companies) will still likely be prohibited from advertising or marketing their low-THC oil products to registered patients or the public. However, they will still likely be allowed to provide information about their products directly to physicians, and upon request, physicians will still likely be allowed to furnish the names of licensed dispensaries (and licensed production companies) to registered patients or their caregivers.

The DEA’s Reclassification of Cannabis Would Likely Affect the Availability of Low THC Oil

To date, approximately 9,500 Georgians are registered with the state’s Low-THC Registry, which allows them to purchase low-THC oil from licensed dispensaries. Since the legislation’s passage, the number of registered patients has increased significantly and continues to steadily rise. If the DEA reclassifies marijuana, this patient number will likely increase at an even faster rate because the public will likely perceive reclassification as an acknowledgement by the federal government that marijuana possesses health and medicinal benefits. If that occurs, statewide demand for low THC oil could quickly outstrip the supply.

Georgia Gov. Brian Kemp
Image: Georgia National Guard, Flickr

Under HB 324, the GAMCC is tasked with ensuring that the state has a sufficient number of retail outlet dispensaries across the state to meet patient demand but is limited to issuing only six production licenses. As the number of registered patients continues to grow, the GAMCC may be forced to recommend amendments to the statute allowing it to issue additional production licenses to increase the state’s supply of low THC oil, and depending on how many additional patients are added to the state’s Low-THC Registry, the GAMCC may also have to issue additional dispensary licenses to keep up with patient demand by relaxing the geographic limitations on locating dispensaries.

Thus, the DEA’s reclassification of cannabis likely would affect the amount of low THC oil available to registered patients in Georgia.

The DEA’s Reclassification of Cannabis Would Likely Cause Large Pharmaceutical Companies to Enter Georgia’s Medical Cannabis Market

Large pharmaceutical companies typically manufacture, market, sell and ship their products on a national and international scale. Given cannabis’ current status as a Schedule I drug under the CSA, these companies have largely steered clear of the burgeoning medical marijuana industry because of the inherent risk of violating federal law. If the DEA reclassifies cannabis, that risk will be diminished greatly, and the companies therefore will likely decide to enter the market by acquiring existing medical marijuana companies with established national or state-level medical cannabis brands.

If the DEA reclassifies cannabis, Georgia’s medical cannabis market will likely be affected in multiple ways.Depending on how the DEA reclassifies cannabis, low-THC oil in Georgia could be subject to stringent federal standards, including the FDA’s complex and expensive drug approval process. Georgia medical cannabis companies will likely not be accustomed to complying with such federal regulations. Large pharmaceutical companies, on the other hand, are very accustomed to dealing with the federal government, including FDA drug approval. So, if the DEA reclassifies marijuana, pharmaceutical companies will likely view reclassification as a tremendous opportunity to enter the Georgia market by leveraging their experience and institutional knowledge dealing with federal law to acquire or partner with a licensed Georgia cannabis company that has an established brand of low -HC oil.

Entering Georgia’s medical cannabis market won’t be easy, however, because HB 324 prohibits licensees from transferring their licenses for five years and requires that the original licensee be a Georgia business. But, HB 324 does not prohibit them from selling their businesses, which necessarily includes any licenses the business owns. Purchasing a licensed Georgia medical cannabis company requires payment of a production license business transfer fee. The fee for the first sale of a business with a Class 1 production license is $100,000 and the fee for a Class 2 license is $12,500. The fee for the second sale is $150,000 for a Class 1 production license, and $62,500 for a Class 2 license. The fee for the third and fourth sales is $200,000 for a Class 1 production license, and $112,500 for a Class 2 license.

Conclusion

If the DEA reclassifies cannabis, Georgia’s medical cannabis market will likely be affected in multiple ways. Specifically, depending on how the drug is reclassified, the regulatory framework for medical cannabis companies likely will change to include both state and federal requirements, potentially including the FDA’s complex drug approval process. Also, the amount of low-THC oil available for registered patients to purchase likely will be diminished precipitating the need for the GAMCC to modify the statute to allow for issuing additional production licenses and relaxing the geographic limitations on locating dispensaries. Finally, large pharmaceutical companies likely will attempt to enter Georgia’s medical cannabis market by purchasing existing, licensed Georgia companies that have established low-THC oil brands.

July 11, 2019

Tilray Imports Medical Cannabis Oil In Bulk To UK

By Marguerite Arnold

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Tilray has managed to successfully import its first bulk supply of medical cannabis oil into the UK.

It was a Tilray product, in fact, that was not only confiscated at the border last year – but subsequently sparked media outrage over the denial of the same to one Billy Caldwell, an epileptic child. It was not the only outcry nor was Billy the only child endangered. And the British people, in fact, finally signalled that they had lost their stiff upper lip on this one last year.

All of this despite lingering and significant problems ever since. Not to mention an intriguing and well-timing market entry for Tilray right after things have been heating up on cannabis reform in Parliament of late.

The Tilray product, which will be imported from its new production facilities in Portugal, has already been distributed in other European countries, including Croatia and Germany.

What is significant in other words, is that the UK is starting to allow bulk orders in through customs- and they are coming not from Canada, but from Europe. Even if it is a Canadian company’s brand on the same, for now at least.

Tilray of course, is not the only company engaged in a race to get imports into the country. Right after Christmas last year, Canopy/Spektrum announced the same plans. Wayland has clearly been angling for a British outpost for some time. And of course, more locally initiated groups, including European Cannabis Holdings, have been working to initiate easier access to British markets for well over a year. Let alone more locally grown interests and pursuits now clearly lining up for market entry.

But this announcement, coming so shortly after all the recent activity on cannabis reform and calls for trials in the UK, clearly means that the doors are now opening fast for the largest players angling to get in.

Bottom line? Look for the biggest Canadians with an already established European presence, to begin making similar announcements this summer.

Being “Available” Is Only The First Hurdle

One of the biggest problems facing not only the “industry” but patients in the UK, much like elsewhere, is that doctors do not know or want to prescribe cannabis and cannabinoid medicines- and for reasons stemming from fear or ignorance about medical efficacy to insurance coverage.

Medical cannabis, in all its forms so far, however, is also highly expensive and out of reach for most unless they obtain an NHS approval (or as in Germany, statutory health insurer approval) to actually obtain the drug. And then have a place to obtain it.

This basically counts out everyone who cannot pay out of pocket and cannot find a willing doctor to sign them up via onerous and ongoing paperwork. And that, of course, is the majority of the sick people in the room.

It is this basic conundrum, which the bigger Canadians have yet to solve themselves (and it is becoming more of a recognized issue in the U.S. in the days, presumably, before the 2020 election which will hopefully set a timetable for federal reform) that has been in the room for the last two years thanks to Germany.

Image credit: Flickr

It is even more of an issue in the UK. Especially with a renegotiation in Britain’s diplomatic and trade relationship with the rest of the world.

That includes, as of mid-July, a downright, undiplomatic spat between the White House and Whitehall right now over leaked comments from the British Ambassador to Washington – and about matters of competency far from cannabis. Although of course, this issue is in the room.

For that reason, the Canadian as well as the European connection to imports right now (from not just Portugal but Holland) on the medical side of the ledger, spell an intriguing fall for not only cannabis, but the real shape and direction of British politics- and by extension- British trade.

Patients Are Taking It To The Streets And To Parliament

As much as patients have so far partnered with the big Canadian companies in the attempt to get the borders open, this is not the only game in town. Dutch imports, from Dutch companies, are already showing up in the UK (see Bedrocan). And both British and Irish growers are getting in on early action, even if for now “just” on the CBD side.

Furthermore, it is clear that patients are playing a large role in making sure that they are being heard, even to the point of putting pressure on doctors. In an extraordinary admission at the parliamentary level during the last week of June, lawmakers conceded that the British public was taking matters into their own hands. And furthermore, that the change in the law had led to clear expectations that were not being met.

Namely, British patients are literally demanding medical cannabis by prescription from their doctors.

And much like in Germany, with a mandate for coverage, the government is being forced to listen, and as best as it can in a severely crimped and politicized Brexit environment, respond.

While cannabis reform is hardly the Guy Fawkes, in other words, in a tinder match environment that British politics certainly is right now, it might be a kind of spark that drives a much wider conversation in the UK about current events.

Specifically the survival of a system that is poised to provide not only access to cannabis but comprehensive medical care beyond that, even for the old or chronically ill.

July 10, 2019

Transporting Cannabis Can Be a Costly Business Risk

By Susan Preston, T.J. Frost

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Did you know that the use of personal vehicles for transporting cannabis products is one of the most frequent claims in the cannabis industry? It surpasses property, product liability and even theft. Businesses are either unaware of the risks involved in using personal vehicles for transporting cannabis, or they aren’t taking them seriously enough.

Considering the strict statutes many states have placed on transporting cannabis should be reason alone to be more diligent. For example, the California Bureau of Cannabis Control’s proposed regulations require cannabis business owners to ensure their drivers have designated permits to transport the product. The state’s current legislation mandates inspections at any licensed premises, and requires employers to provide detailed tracking and schedules on the transport of product. Further, the state prohibits using minors to transport cannabis, and considers it a felony to do so.

Regulatory concerns, combined with the potential liabilities that could come from driver behavior, are keeping insurers from offering auto coverage to the cannabis industry. In fact, just four insurers currently offer the industry auto coverage, with premiums running as high as $17,000 per auto on average. It is important to note that personal auto insurance falls short because it doesn’t cover cargo loss.

Alternatively, because the stakes are so high, many companies are using courier services to transport cannabis product. But cargo insurance is still an issue. Without it, the care, custody and control of someone else’s products, and insurance limits are lacking. Even when the courier has cargo coverage, because they are delivering for multiple companies, the claims payout would have to be split amongst all the customers – likely below the value of your loss.

Consider the following best practices when transporting cannabis:

Conduct background checks/review DMV records. Uncovering any potential driver issues prior to hiring is critical. Look for previous DUIs or drug related history. Employees who might use product before getting behind the wheel are a significant danger to other drivers and a major liability to the employer. Even after hiring, be on alert for signs that indicate poor driving performance. Use check-in/check-out processes for all drivers, and conduct regular vehicle walk-arounds to look for scratches, dents or other damage that otherwise might be unreported to the employer.First, and most importantly, assess your risk mitigation options. Then, put processes in place as soon as possible to eliminate risk.
Implement quarterly driver training. Educate employees on proper procedures. While minor fender benders and sideswipe accidents are most common, even these can be costly if not handled properly. Once law enforcement get involved in an accident the car’s transportation of cannabis could become a secondary issue. Teach drivers how to handle accidents while on the scene, including informing law enforcement about the cargo and the employer.
Use unmarked vehicles. Drivers carrying a significant amount of product and/or cash are tempting targets for thieves. Company cars used for transporting product should be newer, and have no fleet serial numbers or anything identifying the company.
Require increased personal liability limits. If an employee is using their own personal vehicle for business purposes, the business owner should require that person carry more than minimum limits of personal liability. Ideally, they should have $300,000 or more, at an absolute minimum $100,000.

Get started now

First, and most importantly, assess your risk mitigation options. Then, put processes in place as soon as possible to eliminate risk. Secure the right insurance coverage, and ask your broker/underwriter to provide any additional recommendations to best mitigate your transportation, delivery, and cargo exposures.

To learn more, please visit our website.

July 10, 2019

Has Cannabis Reform Landed In The UK?

By Marguerite Arnold

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The British have finally decided that cannabis reform is overdue. In London at least, 63% of the population believe that recreational reform is a good idea. According to a poll by The Evening Standard, the rest of England too, is getting close to a majority when the idea of recreational reform is in the room.

It is, as usual, recreational reform that is the icing on a medical cake that has yet to be baked. But that spice brownie is well on its way to the oven too. According to the British Medical Journal as of the beginning of July, the idea of broader access to regulated medical supplies for patients is mandatory.

And in the ranks of the conservative party, Crispin Blunt founded the Conservative Drug Policy Reform Group last September to lead Parliament in a long overdue discussion about the use of both medicinal and recreational cannabis use in the UK that formally “launched” during the last week of June.

But how the industry will develop here is also a big question in the room right now, especially with a country poised on the edge of one of the biggest constitutional questions in the country’s history – to Brexit or not, and how.

Justice Minister Crispin Blunt (right)
Photo courtesy of The UK Ministry of Justice, Flickr

The North American Influence Is Controversial

While Blunt, for example, sees no issue with injecting North American capital into the debate, there are others who are not so sanguine. And while the idea of Canadian reform is popular here, including the freedom of patients (and others) to grow small amounts themselves, the idea of Canadian companies influencing national policy is not. From The Daily Mail to The Guardian, there have been front page headlines about the coming financial influence of “The North Americans.”

That this discussion is also going on at a time when the UK is considering a completely new trade agreement with the world, including on pharmaceuticals, is not insignificant. Where the country’s drugs come from, far from cannabis, is absolutely on the table. Not to mention how much they cost.

Questions of basic access are likely, in other words, to be in the room for a long time here. The barriers to obtaining and filling a prescription start at its expense – which is ₤1,100 (about $1,400) per prescription. There are few people, let alone those who are chronically ill, who can afford the same. This is far from a “normalized” drug- even of last resort- at the NHS.So far, the number of actual cannabis patients in the UK (ones who go to a doctor for a prescription and fill it) is still under 100 people.

That said, it is a start. And for the first time, as of this summer, those with the money can in fact, obtain cannabis by prescription.

But what happens to those (the vast majority) who cannot?

Patients Are Feeling Side-lined

Just as in national legalizing conversations in the United States and Canada so far, patients are being pushed aside for “the business” to take the conversation forward. But where does this business fall on matters of price and access?

So far, the number of actual cannabis patients in the UK (ones who go to a doctor for a prescription and fill it) is still under 100 people.

While patient groups are organizing, and the earliest ones to gain national attention, usually families whose children have been directly in the line of fire, are getting commercial ambitions themselves, the fact remains that patient voices are not the loudest ones in the room. Although as Blunt announced last week, he does not see recreational reform happening in the UK for the next five years.

That also means that every Canadian company entering the market (in particular) will have to continue to sing the same medical song they have been humming across Europe- at least in public.

The UK is NOT Germany – But It’s Not Canada Or The US Either…

No matter how much more “liberal” supposedly, the English people are on the whole CBD question (there is already far more CBD for sale in the UK than just about anywhere else), the UK market is still far behind Germany. Why? Since March 2017, insurance companies auf Deutschland have been required to cover the drug – from sprays and pills to floss when prescribed by a doctor.

There are, by latest calculations about 50,000 German patients.

That said, it is clear that the British do not seem to give a fig about the entire “novel food” discussion and are literally, in some cases, daring the police to raid stores and shut down establishments. The idea of rebellion against EU rules seems very obvious on the CBD front.

Beyond this, however, it is also clear that “Canadian” much less “American” cannabis reform is not necessarily the only model in town.

As the British, in other words, do finally embrace the cannabis question, it is very likely that the face of the same will be of a unique Limey strain all of its own.