Encore Labs is a full-service cannabis testing lab in Pasadena, California, providing all testing needs required by California’s Bureau of Cannabis Control (BCC). The BCC requires that cannabis products being sold in licensed dispensaries be tested for cannabinoid potency, heavy metals, microbial impurities, moisture content and water activity, mycotoxins, residual pesticides, residual solvents and processing chemicals, foreign materials and terpenes. It is Encore Labs’ goal to guarantee the quality and potency of all cannabis products while ensuring regulatory guidelines are met in the state of California.
Encore Labs provides quick turnaround times on a consistent basis. They take pride in offering excellent customer service without diminishing the quality of the work that they do. Their team of laboratory analysts/technicians are passionate about the industry and will never compromise their integrity just to make an extra buck.
Co-Founder, Spencer Wong, mentions their personal connection with clients. “Our customers don’t just see us as their testing laboratory, they see Encore Labs as their laboratory partner,” says Wong. “Besides performing analytical testing, we have worked with many customers to help formulate new products and do root cause analysis to pinpoint inefficiencies in their manufacturing operations and cultivation farms.”
ISO/IEC 17025 Accreditation has been extremely valuable to Encore Labs, especially regarding the new cannabis testing industry. “Our experience with Perry Johnson Laboratory Accreditation, Inc. has been great and has allowed for a very smooth and straightforward initial accreditation process. Their staff has been knowledgeable and responsive every step of the way,” says Wong.
Accreditation establishes that steps are being taken regarding quality and that laboratories are meeting and exceeding the highest testing standards. It also provides further assurance and confidence in data results as well as validated methods, staff training procedures, equipment calibration and successful participation in proficiency testing/interlaboratory comparisons.
Starting out with 1500 square feet of laboratory space, within the last year Encore Labs has doubled its work area. In order to meet the growing demand of the cannabis testing industry, they have added plans to once again double in size by the end of 2019, as well as open a second laboratory by the end of 2020.
The combination of gas chromatography and infrared spectroscopy (GC/IR) is a powerful tool for the characterization of compounds in complex mixtures. (1-5) Gas chromatography with mass spectroscopy detection (GC/MS) is a similar technique, but GC/MS is a destructive technique that tears apart the sample molecules during the ionization process and then these fragments are used to characterize the molecule. In GC/IR the molecules are not destroyed but the IR light produced by molecular vibrations are used to characterize the molecule. IR spectrum yields information about the whole molecule which allows the characterization of specific isomers and functional groups. GC/IR is complementary to GC/MS and the combination results in a powerful tool for the analytical chemist.
A good example of the utility of GC/IR vs GC/MS is the characterization of stereo isomers. Stereo isomers are mirror images such as a left hand and a right hand. In nature, stereo isomers are very important as one isomers will be more active then its mirror image. Stereo isomers are critical to medicinal application of cannabis and also a factor in the flavor components of cannabis.
GC/MS is good at identifying basic structure, where GC/IR can identify subtle differences in structure. GC/MS could identify a hand, GC/IR could tell you if it is a left hand or right hand. GC/MS can identify a general class of compounds, GC/IR can identify the specific isomer present.
Gas chromatography interfaced with infrared detection (GC/IR), combines the separation ability of GC and the structural information from IR spectroscopy. GC/IR gives the analyst the ability to obtain information complementary to GC/MS. GC/IR gives the analyst the power to perform functional group detection and differentiate between similar molecular isomers that is difficult with GC/MS. Isomer specificity can be very important in flavor and medical applications.
Gas chromatography with mass spectrometry detection (GC/MS) is the state-of-the-art method for the identification of unknown compounds. GC/MS, however, is not infallible and many compounds are difficult to identify with 100 % certainty. The problem with GC/MS is that it is a destructive method that tears apart a molecule. In infrared spectrometry (IR), molecular identification is based upon the IR absorptions of the whole molecule. This technique allows differentiation among isomers and yields information about functional groups and the position of such groups in a molecule. GC/IR complements the information obtained by GC/MS.
Initial attempts to couple GC with IR were made using high capacity GC columns and stopped flow techniques. As GC columns and IR technology advanced, the GC/IR method became more applicable. The advent of fused silica capillary GC columns and the availability of Fourier transform infrared spectrometry made GC/IR available commercially in several forms. GC/IR using a flow cell to capture the IR spectrum in real time is known as the “Light Pipe”. This is the most common form of GC/IR and the easiest to use. GC/IR can also be done by capturing or “trapping” the analytes of interest eluting from a GC and then measuring the IR spectrum. This can be done by cryogenically trapping the analyte in the solid phase. A third possibility is to trap the analyte in a matrix of inert material causing “Matrix Isolation” of the analyte followed by measuring the IR spectrum.
The physical state of the sample has a large effect upon the IR spectrum produced. Molecular interactions (especially hydrogen bonding) broadens absorption peaks. Solid and liquid samples produce IR spectra with broadened peaks that loses much of the potential information obtained in the spectra. Surrounding the sample molecule with gas molecules or in an inert matrix greatly sharpens the peaks in the spectrum, revealing more of the information and producing a “cleaner” spectrum. These spectra lend themselves better to computer searches of spectral libraries similar to the computer searching done in mass spectroscopy. IR spectral computer searching requires the standard spectra in the library be of the same physical state as the sample. So, a spectrum taken in a gaseous state should be searched against a library of spectra of standards in the gaseous state.
Gas Phase – Lack of molecular interactions sharpen absorption peaks.
Matrix Isolation – Lack of molecular interactions sharpen absorption peaks.
GC/IR yields chromatograms of infrared absorbance over time. These can be total infrared absorbance which is similar to the total ion chromatogram (TIC) in GC/MS or the infrared absorbance over a narrow band or bands analogous to selected ion chromatogram. This is a very powerful ability, because it gives the user the ability to focus on selected functional groups in a mixture of compounds.
Gas chromatography with infrared detection is a powerful tool for the elucidation of the structure of organic compounds in a mixture. It is complementary to GC/MS and is used to identify specific isomers and congeners of organic compounds. This method is greatly needed in the Cannabis industry to monitor the compounds that determine the flavor and the medicinal value of its products.
GC–MS and GC–IR Analyses of the Methoxy-1-n-pentyl-3-(1-naphthoyl)-Indoles: Regioisomeric Designer Cannabinoids, Amber Thaxton-Weissenfluh, Tarek S. Belal, Jack DeRuiter, Forrest Smith, Younis Abiedalla, Logan Neel, Karim M. Abdel-Hay, and C. Randall Clark, Journal of Chromatographic Science, 56: 779-788, 2018
Simultaneous Orthogonal Drug Detection Using Fully Integrated Gas Chromatography with Fourier Transform Infrared Detection and Mass Spectrometric Detection , Adam Lanzarotta, Travis Falconer, Heather McCauley, Lisa Lorenz, Douglas Albright, John Crowe, and JaCinta Batson, Applied Spectroscopy Vol. 71, 5, pp. 1050-1059, 2017
High Resolution Gas Chromatography/Matrix Isolation Infrared Spectrometry, Gerald T. Reedy, Deon G. Ettinger, John F. Schneider, and Sid Bourne, Analytical Chemistry, 57: 1602-1609, 1985
GC/Matrix Isolation/FTIR Applications: Analysis of PCBs, John F. Schneider, Gerald T. Reedy, and Deon G. Ettinger, Journal of Chromatographic Science, 23: 49-53, 1985
A Comparison of GC/IR Interfaces: The Light Pipe Vs. Matrix Isolation, John F. Schneider, Jack C. Demirgian, and Joseph C. Stickler, Journal of Chromatographic Science, 24: 330- 335, 1986
Gas Chromatography/Infrared Spectroscopy, Jean ‐ Luc Le Qu é r é , Encyclopedia of Analytical Chemistry, John Wiley & Sons, 2006
The majority of this cost will not be picked up by private health insurers but rather the federal governmentActually, according to industry analysis, this is about 70% more than the price of one comparable drug (Onfi), and slightly more expensive than Banzel, the two competing (non-cannabinoid based) medications now available in the U.S. for this market.
Here is the other (widely unreported) kicker. The majority of this cost will not be picked up by private health insurers but rather the federal government, which is also not negotiating with GW Pharma about that high price (unlike for example what is going on in Europe and the German bid).
Why the difference?
Two reasons. The first is that Epidiolex has obtained “orphan drug” status (a medication for a disease that affects fewer than 200,000 patients in the U.S.) The second is that the majority of the insurance that will be picking up this tab is Medicaid. The patient pool will be unable to afford this. As a result, the bulk of the money will remit not from private insurance companies but rather federal taxpayers. And, unlike in say, Germany, none of this is pre-negotiated in bulk.
Co-payments are expected to range from $5 to $200 per month per patient after insurance (read: the government) picks up the tab. This essentially means that the company plans to base participation at first at least on a sliding scale, highly subsidized by a government that has yet to reschedule cannabis from a Schedule I in the U.S.
Creating, in other words, a new monopoly position for GW Pharmaceuticals in North America.
A Hypocrisy Both Patients And The Industry Should Fight
The sordid, underhanded politicking that has created this canna monster is hardly surprising given the current political environment in both the U.S. and the U.K. right now. The people who benefit the most from this development are not patients, or even everyday shareholders, not to mention the burgeoning legitimate North American cannabis industry, but in fact highly placed politicians (like British Prime Minister Theresa May). Philip May, the PM’s husband’s firm is the majority shareholder in GW Pharma. Her former drugs minister (with a strong stand against medical cannabis) is married to the managing director of British Sugar, the company that grows GW Pharma’s cannabis stock domestically.
So far, despite a domestic outcry over this in the UK (including rescheduling), there has been no political backlash in the United States over this announcement. Why not?
Look To Europe For A More Competitive Medical Market
This kind of pricing strategy is also a complete no go in just about every other market – including medical-only markets where GW Pharma already has a footprint.
For example, German health insurers are already complaining about this kind of pricing strategy for cannabis (see the Cannabis Report from one of the country’s largest insurers TK – out earlier this year). And this in an environment where the government, in fact, does negotiate a bulk rate for most of the drugs in the market. Currently most German cannabis patients are being given dronabinol, a synthetic form of THC which costs far less.
On top of this, there are also moves afoot by the German government to begin to bring the costs of medical cannabis and medicines down, dramatically. And this too will impact the market – not only in Europe, but hopefully spark a debate in every country where prices are also too high.
The currently pending German cultivation bid for medical cannabis has already set an informal “reference” price of at most 7 euros a gram (and probably will see bid competitors come in at under half that). In other words, the government wholesale price of raw, unprocessed cannabis flower if not lightly processed cannabis oil is expected to be somewhere in the neighbourhood of 3-4 euros per gram come early next year. If not, as some expect, potentially even lower than that.
Processed Cannabis Medicine vs. Whole Plant Treatment
The debate that is really raging, beyond pricing, is whether unprocessed cannabis and cannabis oil is actually “medicine.” At the moment, the status quo in the U.S. is that it is not.
GW Pharmaceuticals, in other words, a British company importing a CBD-based derivative, is the only real “medical cannabis” company in the country, per the FDA. Everyone else, at least according to this logic, is placed in the “recreational camp.” And further, hampered still, with a lack of rescheduling, that affects everyone.
If that is not an organizing issue for the American cannabis industry, still struggling with the many issues inherent in the status quo (from insurance coverage and banking to national distribution across state lines) leading up to the midterms, nothing will be.
British Home Secretary Sajid Javid appears to have become the most high ranking cannabis advocate in the British government. He has just launched a review into medicinal uses of cannabis in the UK. However, this dramatic change in policy has only come after a series of high profile campaigns and escalating battles for access waged by patients and their families against a government which has remained stubbornly intransigent in the face of growing evidence of medical efficacy and reform elsewhere. In fact, the cannabis “Battle of Britain” has come to resemble the contretemps in Israel over the same issue four years ago that led to a national review of medical use and greater patient access.
It is expected that this recent turn of events will open better access for more British medical users. The fact that the timing of all of this comes as GW Pharma has received the right to distribute Epidiolex in the U.S. as the first FDA-approved cannabis-based medicine is not only part of the irony but the underlying problematic politics surrounding all of this. Starting with the timing of who has access to what, and under what circumstances. As it stands, Epidiolex is also the only cannabis-based drug now eligible in the United States for healthcare coverage. The rest of the market is so-far excluded from it. Unlike, it should be pointed out the situation in the UK, the rest of the Commonwealth, and of course, the EU. Starting with Germany.
A Major Win for Patients
Celebrate one for Alfie! Alfie Dingley that is – the British 6 year old with epilepsy who has become one of the most well-known faces of medical justice for cannabis users in the UK. Dingley and his parents waged a battle since last fall over his right to consume low THC cannabis oil that allows him to manage his epilepsy. He has just been granted an emergency license to import the oil from the Netherlands.
But this is also a victory for Billy Caldwell, the twelve-year-old who ended up in emergency care in hospital recently after his medical oil (from Canada) was confiscated at the border. Video of border control agents at Heathrow Airport removing the oil from the Caldwells caused a national outcry in the UK. Caldwell’s mother, Charlotte, has also waged a high profile battle for access, including at the doors of the hospital her son was admitted to last week. She has also started her own CBD company named after her son.
Like the rest of Europe, which the UK still technically is part of until Brexit, the focus here has very much been on medical use.And of course, this new indication in change of policy is seen as a major victory if not step forward for literally thousands if not millions of Britains who suffer from chronic conditions that are still drug resistant (like Epilepsy but not limited to the same.)
As he addressed the House of Commons on the issue of medicinal cannabis use, Javid said “It has become clear to me since becoming home secretary that the position that we find ourselves in currently is not satisfactory…I have now come to the conclusion that it is time to review the scheduling of cannabis.” As in the US, cannabis is still considered a Schedule I drug in the UK – with supposedly no medical efficacy. This new development clearly challenges that scheduling – but where and how?
Recreational Is Still Not On The Table
Like the rest of Europe, which the UK still technically is part of until Brexit, the focus here has very much been on medical use. This is for several reasons, including a much better and more inclusive public health system – despite imminent fears about the longevity of the British National Health Service (NHS).
In the UK, however, further reform is not likely to move fast. Unlike anywhere else, cannabis production is essentially limited to one company – GW Pharmaceuticals – who themselves have high standing political connections that continue to oppose reform. This is not based on science but rather profit. Despite the fact that the British Isles are the largest exporter of medical cannabinoid pharmaceuticals in the world, British patients are still largely excluded from access. The only reason that these children and their parents were able to pierce the wall of privilege and profit that has driven the debate here since the late 90’s is that GW Pharmaceutical’s cannabinoid concoctions do not work on this kind of epilepsy. Plus the failure of a recent trial of their new drug (shamefully in Europe, not even conducted in the UK).
As a result, GW Pharmaceuticals and the well placed scions of British society who have profited directly and personally from this situation have little choice but to back down – but not by much. As soon as Javid announced his intention to do a review of British policy, former Tory (conservative) leader Lord William Hague called for full legalization. An initiative that as of June 19 was rejected by the government.
Is Medical Finally About To Get Its Due?
In Europe, politically, the frustration is clearly growing. And much like in the United States circa 2012, activists and advocates realize that medical access is the first step towards full reform. However here there is a marked difference to what is going on in both the U.S. and Canada. And in turn, this may bring a long overdue focus on the medical issue that has continually been obscured and overlooked by the industry itself as soon as recreational seems it is in reach.
When real and regulated medical markets are allowed to flourish, the first beneficiaries are both children and women, not middle-aged men. That is clearly the face of the “average” German patient now that the data of the first year has come in. It is also likely to be the case of the British patient as well as Europeans across the continent.In Europe, politically, the frustration is clearly growing
Further, as cannabis has become more of an accepted treatment, this is in turn forcing governments (and even the industry itself) to begin, for the first time, to consider funding widespread trials – and of the raw plant itself along with extracts and other forms the drug can be consumed in.
What does this really herald, in fact then besides relief for chronically ill patients? The first widespread scientific inquiry into the efficacy of cannabinoids outside of Israel.
And that too, is cause for celebration. Congrats Alfie and Billie! And all the people who helped move the issue forward.
Cannabis extraction has been used as a broad term for what can best be described as cannabis processing. A well-thought-out cannabis process goes far beyond just extraction, largely overlapping with cultivation on the front-end and product development on the back-end1. With this in mind, four pillars emerge as crucial capabilities for developing a cannabis process: Cultivation, Extraction, Analytics and Biochemistry.
The purpose and value of each pillar on their own is clear, but it is only when combined that each pillar can be optimized to provide their full capacities in a well-designed process. As such, it is best to define the goals of each pillar alone, and then explain how they synergize with each other.
At the intersection of each pillar, specific technology platforms exist that can effectively drive an innovation and discovery cycle towards the development of ideal products.Cultivation is the foundation of any horticultural process, including cannabis production. Whether the goal be to convert pigments, flavors or bioactive compounds into a usable form, a natural process should only utilize what is provided by the raw material, in this case cannabis flower. That means cultivation offers a molecular feedstock for our process, and depending on our end goals there are many requirements we may consider. These requirements start as simply as mass yield. Various metrics that can be used here include mass yield per square foot or per light. Taken further, this yield may be expressed based not only on mass, but the cannabinoid content of the plants grown. This could give rise to a metric like CBD or THC yield per square foot and may be more representative of a successful grow. Furthermore, as scientists work to learn more about how individual cannabinoids and their combinations interact with the human body, cultivators will prioritize identifying cultivars that provide unique ratios of cannabinoids and other bioactive compounds consistently. Research into the synergistic effect of terpenes with cannabinoids suggests that terpene content should be another goal of cultivation2. Finally, and most importantly, it is crucial that cultivation provide clean and safe materials downstream. This means cannabis flower free of pesticides, microbial growth, heavy metals and other contaminants.
Extraction is best described as the conversion of target molecules in cannabis raw material to a usable form. Which molecules those are depends on the goals of your product. This ranges from an extract containing only a pure, isolated cannabinoid like CBD, to an extract containing more than 100 cannabinoids and terpenes in a predictable ratio. There are countless approaches to take in terms of equipment and process optimization in this space so it is paramount to identify which is the best fit for the end-product1. While each extraction process has unique pros and cons, the tunability of supercritical carbon dioxide provides a flexibility in extraction capabilities unlike any other method. This allows the operator to use a single extractor to create extracts that meet the needs of various product applications.
Analytics provide a feedback loop at every stage of cannabis production. Analytics may include gas chromatography methods for terpene content3 or liquid chromatography methods for cannabinoids 3, 4, 5. Analytical methods should be specific, precise and accurate. In an ideal world, they can identify the compounds and their concentrations in a cannabis product. Analytics are a pillar of their own due simply to the efforts required to ensure the quality and reliability of results provided as well as ongoing optimization of methods to provide more sensitive and useful results. That said, analytics are only truly harnessed when paired with the other three pillars.
Biochemistry can be split into two primary focuses. Plant biochemistry focuses back towards cultivation and enables a cannabis scientist to understand the complicated pathways that give rise to unique ratios of bioactive molecules in the plant. Human biochemistry centers on how those bioactive molecules interact with the human endocannabinoid system, as well as how different routes of administration may affect the pharmacokinetic delivery of those active molecules.
Each of the pillars require technical expertise and resources to build, but once established they can be a source of constant innovation. Fig. 1 above shows how each of these pillars are connected. At the intersection of each pillar, specific technology platforms exist that can effectively drive an innovation and discovery cycle towards the development of ideal products.
For example, at the intersection of analytics and cultivation I can develop raw material specifications. This sorely needed quality measure could ensure consistencies in things like cannabinoid content and terpene profiles, more critically they can ensure that the raw material to be processed is free of contamination. Additionally, analytics can provide feedback as I adjust variables in my extraction process resulting in optimized methods. Without analytics I am forced to use very rudimentary methods, such as mass yield, to monitor my process. Mass alone tells me how much crude oil is extracted, but says nothing about the purity or efficiency of my extraction process. By applying plant biochemistry to my cultivation through the use of analytics I could start hunting for specific phenotypes within cultivars that provide elevated levels of specific cannabinoids like CBC or THCV. Taken further, technologies like tissue culturing could rapidly iterate this hunting process6. Certainly, one of the most compelling aspects of cannabinoid therapeutics is the ability to harness the unique polypharmacology of various cannabis cultivars where multiple bioactive compounds are acting on multiple targets7. To eschew the more traditional “silver bullet” pharmaceutical approach a firm understanding of both human and plant biochemistry tied directly to well characterized and consistently processed extracts is required. When all of these pillars are joined effectively we can fully characterize our unique cannabis raw material with targeted cannabinoid and terpene ratios, optimize an extraction process to ensure no loss of desirable bioactive compounds, compare our extracted product back to its source and ensure we are delivering a safe, consistent, “nature identical” extract to use in products with predictable efficacies.
Using these tools, we can confidently set about the task of processing safe, reliable and well characterized cannabis extracts for the development of world class products.
 Sweeney, C. “Goal-Oriented Extraction Processes.” Cannabis Science and Technology, vol 1, 2018, pp 54-57.
 Russo, E. B. “Taming THC: potential cannabis synergy and phytocannabinoid-terpenoid entourage effects.” British Journal of Pharmacology, vol. 163, no. 7, 2011, pp. 1344–1364.
 Giese, Matthew W., et al. “Method for the Analysis of Cannabinoids and Terpenes in Cannabis.” Journal of AOAC International, vol. 98, no. 6, 2015, pp. 1503–1522.
 Gul W., et al. “Determination of 11 Cannabinoids in Biomass and Extracts of Different Varieties of Cannabis Using high-Performance Liquid Chromatography.” Journal of AOAC International, vol. 98, 2015, pp. 1523-1528.
 Mudge, E. M., et al. “Leaner and Greener Analysis of Cannabinoids.” Analytical and Bioanalytical Chemistry, vol. 409, 2017, pp. 3153-3163.
 Biros, A. G., Jones, H. “Applications for Tissue Culture in Cannabis Growing: Part 1.” Cannabis Industry Journal, 13 Apr. 2017, www.cannabisindustryjournal.com/feature_article/applications-for-tissue-culture-in-cannabis-growing-part-1/.
 Brodie, James S., et al. “Polypharmacology Shakes Hands with Complex Aetiopathology.” Trends in Pharmacological Sciences, vol. 36, no. 12, 2015, pp. 802–821.
GW Pharmaceuticals scored a significant victory in the United States with its cannabis-based epilepsy drug Epidiolex in mid-April. The company received approval from a U.S. Food and Drug Administration (FDA) panel for its use in treating two forms of drug-resistant epilepsy.
The drug was granted “orphan drug” status in the EU a year ago.Will this be enough to move the conversation forward about cannabis as medicine in the United States?
So what does the future hold for this drug and a company, which has visited this space before? Remember Sativex?. The Company now faces real competition from a raft of companies moving into this space from just about everywhere – both from Canada and of course Europe itself.
The FDA Might be on the Verge of Approving its First Cannabis-Based Drug
It is not like this is either the FDA’s or GW Pharma’s first discussion about the medical efficacy of cannabinoids. Sativex, a mouth spray containing THC, was never granted approval in the United States for the treatment of MS – although it received such approvals in Europe.
If the FDA approves Epidiolex (made from CBD), it will be the first cannabinoid-based drug approved in the United States by the federal agency.
Will this be enough to move the conversation forward about cannabis as medicine in the United States? What will happen in the EU?
A Divergent and Highly Different Drug Market
Will the FDA finally approve at least one form of a CBD-based drug? The chances are that Epidiolex might finally move the agency to approve. However,this is not, despite the hype that the company has made in the press about this, the first cannabinoid-based drug to be approved in the United States. It might be, however, the first drug based on actual natural cannabinoids rather than synthetic ones that it approves for some purpose. Both Cesamet and Dronabinol (or Marinol) are synthetic cannabinoid drugs approved for several conditions from chronic pain caused by chemo to Parkinson’s.
But those who are hoping that this drug approval might open the floodgates at the FDA for startersshould take a pew. While Sativex was not approved in the United States, it was made available after 2011 for MS patients, particularly in Germany, which has the highest rate of MS of any European country. The problem? It was just too expensive for most people to afford – since their insurance would not cover it. And doctors were even more resistant to prescribing than they are now. So even getting a prescription was almost impossible.
That conversation was different in Europe post-2013, and there were people who managed to get a doctor to write a prescription not to mention afford the eye-watering prices sans insurance coverage.
That said, given the choice between whole plant meds, most people still prefer bud cannabis to the spray variety. And in Europe right now, that is what is on the table.
What Will This Mean in the US vs Europe?
In the US, the first thing that FDA approval will mean is drug sales for only one branded drug. That is the cynicism at play here. Furthermore, it also neatly dodges the THC issue.
In Europe? Particularly Germany? This development is not likely to make much of a dent. GW is competing with every single Canadian producer with flower-based oil – and on both the medical and non-medical CBD front. That also now includes local producers. Further, this is a market which prizes genericized drugs over name brands. In France, the distribution of Sativex was held up, primarily because of the row over cost. And who would pay.
It is also unlikely that the FDA approval in the United States will change the discussion either in the US on a federal level – or in Europe.
The most important place this news already made a dent? GW Pharma’s stock price – at least temporarily. It is also a spot of good news the company really needs. In February, the company’s GWP42006 drug designed for focal seizures (drug resistant epilepsy) failed to outperform placebo results and wiped 5% off the company’s stock.
In a move that seems to shed more doubt than certainty on domestic cannabis cultivation and the date that it will start auf Deutschland, the Higher Regional Court (or OLG) in Dusseldorf formally stopped the pending bid procedure for the first crop on March 28th. BfArM, the federal agency in charge of regulating all narcotic drugs, initiated that procurement bid. The tender bid was launched after the German Parliament and federal legislators changed the law last year to mandate that cannabis be available via prescription, and further that public health insurers were required to cover it.
That bid announcement was supposed to come as early as last September. Criticisms about the process and requirements began immediately thereafter. For starters, the bid’s requirements excluded all German-only respondents to the bid and left both Canadian and Israeli firms in the front positions to obtain these valuable licenses. However, there were other gripes, including the fact that the amount of cannabis requested (about 6.6 tonnes) was far too low to even begin to meet real demand. Namely, there are easily 1 million German patients who could qualify for the drug.
In the space of the last year, in fact, the number of “official” German cannabinoid patients has shot up from 1,000 to about 15,000. That said, the top three covering insurers also report a mere 64% approval rate. This means that there are more doctors writing prescriptions than insurers are covering.
That, at least for patients and their advocates is a bit of good news despite the blow that any delay in domestic production has created. Doctor resistance to prescribing cannabinoids even when there are no other alternatives has been used as an excuse in many media reports for the speed of market development. That clearly is not true. The attitude on the ground in Deutschland is rapidly changing.
That bid announcement was supposed to come as early as last September. At that point, however,the agency was then forced to extend the response date, which it did, but apparently not for long enough.
Throughout the fall, it was impossible to understand, from any direction, what was going on. Four lawsuits against the bid were launched around September, each with differing complaints that ranged from criticizing the agency for the lack of extension and response time to monopolistic business practices.
The OLG dismissed all but the criticism about the extension.what this decision has done most clearly is slowed down the production of domestically grown medical cannabinoids
The one clear thing to come out of Düsseldorf? BfArM has been banned from awarding its contract to anyone to produce medical cannabis in Germany starting in 2019. The first letters to bid finalists announcing the bid had been canceledbegan arriving the day after the court’s decision.
Reading Between the Lines
There have been rumors since last fall that the bid would end up in such waters. However,all the major producers widely suspected to have applied for the bid also began announcing themselves as finalists in press releases. For this reason, the official line from everyone that the bid was still, in fact, on track.
Nobody could understand why anyone would want or even be able to halt the production of direly needed, locally sourced, high-gradecannabis. That includes BfArM, which made an impassioned response, via their attorney to the OLG in Dusseldorf. Attorney Heike Dahs warned the court that any interruption of the bid was “very bad for the care of patients.” He was similarly pessimistic about the ability to begin production domestically by the previously set 2019 deadline.
In fact, what this decision has done most clearly is slowed down the production of domestically grown medical cannabinoids (although potentially not by much) while giving officials at BfArM a rather nasty black eye that might yet lead to further legal action.
It also means that there will be another bid process. In the meantime, the ex-im market is, if anything, taking off.
This is a Shock And Opportunity – but not a Surprise
No matter the opinionated emails and IM’ing going on in several languages all over the world right now about the implications legally in the future, the major producers are all taking this in stride. And appear to be well positioned to respond.
According to Dr. Pierre Debs, the managing director of Spektrum Cannabis (the global medical brand of Canopy and based just south of Frankfurt), who responded to CannabisIndustryJournal a day after the court decision, the company is not affected by this development. “Spektrum has a steady and constant supply and we do not anticipate any problems supplying patients through their pharmacies,” he says. Debs received the first German medical import license to bring Canadian cannabis into the country a mere two years ago and has continued to carve a leading path in the discussion across Europe. “In addition to our supply from Canopy Growth Corp, our partnership supply agreement with Alcaliber in Spain will see Spektrum importing sun-grown medical cannabis products starting towards the end of the summer,” says Debs.
But it is not just the big guys in the mix anymore. And there are many who see opportunityto a situation, which is frustrating.“As the second-largest country by population in Europe and a leader within the EU, the German market represents a new frontier for the cannabis industry in general in the region,” says Zlatko Keskovski, chief executive officer of NYSK Holdings, a Macedonian firm now in its second harvest of GMP-certified cannabis and holding EU export rights.
For such firms, even though NYSK is a surprise entrant to the conversation this year and outside the EU, the current situation represents an unbelievable chance to enter a market literally starving for qualifiedproduct. The firm is currently looking for German distributors who cannot access medical grade cannabinoids via other routes including attending the ICBC in Berlin in April. “This year’s ICBC looks to be a seminal moment for NYSK,” says Keskovski. “We have taken the appropriate steps to ensure our high-quality standards have led to products that our customers, and eventually patients, can rely on. We look forward to the chance to showcase our achievements that we’ve worked so hard for. The ICBC will also present us with the opportunity to meet with potential distributors and future partners.”
German Patients are Going to be on the Front Lines of This Discussion
The difficulties that German patients have already faced in obtaining a drug that is now legal in their own country for medical use (and even for recreational purposes across an open border in Holland) are legion. While to a certain extent, German patients are in the same boat as patients elsewhere and their problems, in fact, there are still huge access issues that remain. For starters, the drug is much more expensive here, so those without health insurance approval face bills of about $3,000 per month. Why the eye-watering price? All medical grade cannabis is still imported, although increasingly this is now just via other EU countries, not just from Canada.
“One of the reasons we organized the national German Patient Roundtable is to give patients a voice in all of this supply and demand discussion and to help BfArM and others formulate workable solutions for all,” responded Philip Cenedella IV when reached for a response by CIJ. Cenedella, an American expat and the organizer of the Roundtable, a nationally focussed, umbrella group that is kicking off its campaign this year, spoke for many who are far from court and boardrooms where the decisions are being made.
“While there are very talented firms who will now take up this discussion with the government and reissue a response for the tender, what we continue to see on the ground is that patients simply do not have the access granted them in the law which was passed over a year ago,” Cenedella says, with more than a note of frustration. “We again are calling on all government officials, industry executives and patient advocates to band together to immediately establish workable protocols that directly help the patients.”
Indeed, despite the frustration and delay, if not new costs and opportunities that this decision creates, one thing is very clear on the ground here. The current status quo is unacceptable. That alone should also put pressure on the powers that be to remedy the situation as quickly as possible. And via several routes, including widening import quotas or even issuing new licenses as a new solution to domestic cultivation is implemented.
“Patients are not being served and do not have access to a medicine that has been proven to improve lives,” says Cenedella. “Our simple request is for BfArM to finally invite patients into their discussions, to work with patients to formulate workable cultivation and distribution solutions, and we humbly request that this happen now before they go down another dead-end road, ending in another court defeat, and resulting in even more delays to the patients that are still lacking the care afforded them by the German Federal Court’s decision of 2017.”
By Dr. Zacariah Hildenbrand, Dr. Kevin A. Schug No Comments
Much has been made about the plummeting market value of cannabis grown outdoors in Oregon. This certainly isn’t a reflection of the product quality within the marketplace, but more closely attributable to the oversaturation of producers in this space. This phenomenon has similarities to that of ‘Tulip Mania’ within the Dutch Golden Age, whereby tulip bulbs were highly coveted assets one day, and almost worthless the next. During times like these, it is very easy for industry professionals to become disheartened; however, from a scientific perspective, this current era in Oregon represents a tremendous opportunity for discovery and fundamental research.
As we have mentioned in previous presentations and commentaries, our research group is interested in exploring the breadth of chemical constituents expressed in cannabis to discover novel molecules, to ultimately develop targeted therapies for a wide range of illnesses. Intrinsically, this research has significant societal implications, in addition to the potential financial benefits that can result from scientific discovery and the development of intellectual property. While conducting our experiments out of Arlington, Texas, where the study of cannabis is highly restricted, we have resorted to the closet genetic relative of cannabis, hops (Humulus lupulus), as a surrogate model of many of our experiments (Leghissa et al., 2018a). In doing so, we have developed a number of unique methods for the characterization of various cannabinoids and their metabolites (Leghissa et al., 2018b; Leghissa et al., 2018c). These experiments have been interesting and insightful; however, they pale in comparison to the research that could be done if we had unimpeded access to diverse strains of cannabis, as are present in Oregon. For example, gas chromatography-vacuum ultraviolet spectroscopy (GC-VUV) is a relatively new tool that has recently been proven to be an analytical powerhouse for the differentiation of various classes of terpene molecules (Qiu et al., 2017). In Arlington, TX, we have three such GC-VUV instruments at our disposal, more than any other research institution in the world, but we do not have access to appropriate samples for application of this technology. Similarly, on-line supercritical fluid extraction – supercritical fluid chromatography – mass spectrometry (SFE-SFC-MS) is another capability currently almost unique to our research group. Such an instrument exhibits extreme sensitivity, supports in situ extraction and analysis, and has a wide application range for potential determination of terpenes, cannabinoids, pesticides and other chemical compounds of interest on a single analytical platform. Efforts are needed to explore the power and use of this technology, but they are impeded based on current regulations.
Circling back, let’s consider the opportunities that lie within the abundance of available outdoor-grown cannabis in Oregon. Cannabis is extremely responsive to environmental conditions (i.e., lighting, water quality, nutrients, exposure to pest, etc.) with respect to cannabinoid and terpene expression. As such, outdoor-grown cannabis, despite the reduced market value, is incredibly unique from indoor-grown cannabis in terms of the spectrum of light to which it is exposed. Indoor lighting technologies have come a long way; full-spectrum LED systems can closely emulate the spectral distribution of photon usage in plants, also known as the McCree curve. Nonetheless, this is emulation and nothing is ever quite like the real thing (i.e., the Sun). This is to say that indoor lighting can certainly produce highly potent cannabis, which exhibits an incredibly robust cannabinoid/terpene profile; however, one also has to imagine that such lighting technologies are still missing numerous spectral wavelengths that, in a nascent field of study, could be triggering the expression of unknown molecules with unknown physiological functions in the human body. Herein lies the opportunity. If we can tap into the inherently collaborative nature of the cannabis industry, we can start analyzing unique plants, having been grown in unique environments, using unique instruments in a facilitative setting, to ultimately discover the medicine of the future. Who is with us?
Leghissa A, Hildenbrand ZL, Foss FW, Schug KA. Determination of cannabinoids from a surrogate hops matrix using multiple reaction monitoring gas chromatography with triple quadrupole mass spectrometry. J Sep Sci 2018a; 41: 459-468.
Leghissa A, Hildenbrand ZL, Schug KA. Determination of the metabolites of Δ9-Tetrahydrocannabinol using multiple reaction monitoring gas chromatography – triple quadrapole – mass spectrometry. Separation Science Plus 2018b; 1: 43-47.
Leghissa A, Smuts J, Changling Q, Hildenbrand ZL, Schug KA. Detection of cannabinoids and cannabinoid metabolites using gas chromatography-vacuum ultraviolet spectroscopy. Separation Science Plus 2018c; 1: 37-42.
Qiu C, Smuts J, Schug KA. Analysis of terpenes and turpentines using gas chromatography with vacuum ultraviolet detection. J Sep Sci 2017; 40: 869-877.
By Alison J. Baldwin, Brittany R. Butler, Ph.D., Nicole E. Grimm 1 Comment
With legalization of cannabis for medicinal and adult use occurring rapidly at the state level, the industry is seeing a sharp increase in innovative technologies, particularly in the area of cannabis extraction. Companies are developing novel extraction methods that are capable of not only separating and recovering high yields of specific cannabinoids, but also removing harmful chemicals (such as pesticides) from the concentrate. While some extraction methods utilize solvents, such as hydrocarbons, the industry is starting to see a shift to completely non-solvent based techniques or environmentally friendly solvents that rely on, for example, CO2, heat and pressure to create a concentrate. The resulting cannabis concentrate can then be consumed directly, or infused in edibles, vape pens, topicals and other non-plant based consumption products. With companies continually seeking to improve existing extraction equipment, methods and products, it is critical for companies working in this area to secure their niche in the industry by protecting their intellectual property (IP).
Comprehensive IP protection for a business can include obtaining patents for innovations, trademarks to establish brand protection of goods and services, copyrights to protect logos and original works, trade dress to protect product packaging, as well as a combination of trade secret and confidentiality agreements to protect proprietary information and company “know-how” from leaking into the hands of competitors. IP protection in the cannabis space presents unique challenges due to conflicting state and federal law, but for the most part is available to cannabis companies like any other company.
Federal trademark protection is currently one of the biggest challenges facing cannabis companies in the United States. A trademark or service mark is a word, phrase, symbol or design that distinguishes the source of goods or services of one company from another company. Registering a mark with the U.S. Patent and Trademark Office (USPTO) provides companies with nationwide protection against another company operating in the same space from also using the mark.
As many in the industry have come to discover, the USPTO currently will not grant a trademark or service mark on cannabis goods or services. According to the USPTO, since cannabis is illegal federally, marks on cannabis goods and services cannot satisfy the lawful use in commerce requirement of the Lanham Act, the statute governing federal trademark rights. Extraction companies that only manufacture cannabis-specific equipment or use cannabis-exclusive processes will likely be unable to obtain a federal trademark registration and will need to rely on state trademark registration, which provides protection only at the state-level. However, extractors may be able to obtain a federal trademark on their extraction machines and processes that can legitimately be applied to non-cannabis plants. Likewise, companies that sell cannabis-infused edibles may be able to obtain a federal trademark on a mark for non-cannabis containing edibles if that company has such a product line.
Some extraction companies may benefit from keeping their innovations a trade secretSince the USPTO will not grant marks on cannabis goods and services, a common misconception in the industry is that the USPTO will also not grant patents on cannabis inventions. But, in fact, the USPTO will grant patents on a seemingly endless range of new and nonobvious cannabis inventions, including the plant itself. (For more information on how breeders can patent their strains, see Alison J. Baldwin et al., Protecting Cannabis – Are Plant Patents Cool Now? Snippets, Vol. 15, Issue 4, Fall 2017, at 6). Unlike the Lanham Act, the patent statute does not prohibit illegal activity and states at 35 U.S.C. § 101 that a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”
For inventions related to extraction equipment, extraction processes, infused products and even methods of treatment with concentrated formulations, utility patents are available to companies. Utility patents offer broad protection because all aspects related to cannabis extraction could potentially be described and claimed in the same patent. Indeed, there are already a number of granted patents and published patent applications related to cannabis extraction. Recently, U.S. Patent No. 9,730,911 (the ‘911 patent), entitled “Cannabis extracts and methods of preparing and using same” that granted to United Cannabis Corp. covers various liquid cannabinoid formulations containing very high concentrations of tetrahydrocannabinolic acid (THCa), tetrahydrocannabinol (THC), cannabidiol (CBD), THCa and cannabidiolic acid, THC and CBD, and CBD, cannabinol (CBN), and THC. For example, claim 1 of the ‘911 patent recites:
A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids is tetrahydrocannabinolic acid (THCa).Properly crafted non-disclosure agreements can help further ensure that trade secrets remain a secret indefinitely.
Although the ‘911 patent only covers the formulations, United Cannabis Corp. has filed a continuation application that published as US2017/0360745 on methods for relieving symptoms associated with a variety of illnesses by administering one or more of the cannabinoid formulations claimed in the ‘911 patent. This continuation application contains the exact same information as the ‘911 patent and is an example of how the same information can be used to seek complete protection of an invention via multiple patents.
An example of a patent application directed to solvent-based extraction methods and equipment is found in US20130079531, entitled “Process for the Rapid Extraction of Active Ingredients from Herbal Materials.” Claim 1 of the originally filed application recites:
A method for the extraction of active ingredients from herbal material comprising: (i) introducing the herbal material to a non-polar or mildly polar solvent at or below a temperature of 10 degrees centigrade and (ii) rapidly separating the herbal material from the solvent after a latency period not to exceed 15 minutes.
Claim 12, covered any equipment designed to utilize the process defined in claim 1.
Although now abandoned, the claims of this application were not necessarily limited to cannabis, as the claims were directed to extracting active ingredients from “herbal materials.”
Other patents involve non-toxic extraction methods utilizing CO2, such as Bionorica Ethics GMBH’s U.S. Patent No. 8,895,078, entitled “Method for producing an extract from cannabis plant matter, containing a tetrahydrocannabinol and a cannabidiol and cannabis extracts.” This patent covers processes for producing cannabidiol from a primary extract from industrial hemp plant material.
There have also been patents granted to cannabis-infused products, such as U.S. Patent No. 9,888,703, entitled “Method for making coffee products containing cannabis ingredients.” Claim 1 of this patent recites:
A coffee pod consisting essentially of carbon dioxide extracted THC oil from cannabis, coffee beans and maltodextrin.
Despite the USPTO’s willingness to grant cannabis patents, there is an open question currently regarding whether they can be enforced in a federal court (the only courts that have jurisdiction to hear patent cases). However, since utility patents have a 20-year term, extractors are still wise to seek patent protection of the innovations now.
Another consideration in seeking patent protection for novel extraction methods and formulations is that the information becomes public knowledge once the patent application publishes. As this space becomes increasingly crowded, the ability to obtain broader patents will decline. Therefore, some extraction companies may benefit from keeping their innovations a trade secret, which means that the secret is not known to the public, properly maintained and creates economic value by way of being a secret. Properly crafted non-disclosure agreements can help further ensure that trade secrets remain a secret indefinitely.
Regardless of the IP strategy extractors choose, IP protection should be a primary consideration for companies in the cannabis industry to ensure the strongest protection possible both now and in the future.
While reformers at this point are loath to do any more than publicly hope, events in the UK continue to unfold in favour of reform.
This time, it is in the wake of a highly upsetting and embarrassing incident that further highlights the human toll of prohibition. When the British Home Office (a combination of the State Department, Homeland Security and a few other federal U.S. agencies) refuses cannabis oil to six year-old Britons with epilepsy named Alfie, don’t expect the famed stiff upper lip in response.
Not anymore.Why on earth would a home-grown company deny treatment to a British kid with epilepsy?
Especially not when the rest of the EU is moving forward, Canada and Australia (both countries are a part of the British Commonwealth) are now firmly in the medical camp with Canada moving ahead with recreational use this summer. Not to mention continuing reform on both fronts in many U.S. states. Even with setbacks that include the Trump White House and Justice Department (the recently dismissed federal case in New York being just the latest casualty), recreational reform in California is an international beacon of change that will not go quietly into the night. Not now.
One of the more interesting aspects of the Dingley case in the UK, in sharp contrast, is how fast Parliament responded to the plight of the six-year-old and his mother. Not only has Dingley’s medical import license been reconsidered in Parliament, but the matter appears to have finally galvanized significant numbers of the British elected class to do something about an appalling situation that affects hundreds of thousands, if not millions of Brits too.
Cannabis Medical Refugees
Medical refugee policy, especially around cannabinoids, is at least as controversial as the other kind. In Europe and the rest of the world, just like cannabis reform itself, these are national, not state issues as they have been in the U.S., (where the issue of cannabis patient state “refugees” has nonetheless been an issue for most of this decade).
Outside of the U.S., however, it is still the case that national governments can be embarrassed into reform with the right case (or groups of them).
That was certainly true in Israel in 2014, when the so-called “15 Families” threatened to emigrate from Israel to Colorado unless the government allowed them to treat their sick kids (federal government policy was changed within a month). Not to mention an internal, state to state migration of families in the United States to Colorado around the same time.
It may also be true in this latest British case. The Home Office has been embroiled in a few embarrassing take backs of late, mostly on the topic of immigration of people. The Alfie-Dingley cannabis case hits both medical cannabis reform and lingering buyer’s remorse over Brexit where the British people actually live (and on topics they actually care about).
Refusing at least medical cannabis rights in the UK might also well tip the scales in favour of a redo on Brexit. Or at least capture the support of people who still dream of that possibility. While the UK is still part of the continent, British citizens also have the right to travel freely, with medical rights intact, to other countries and get treatment. The British are no strangers to this idea (in fact, many British retirees end up in Spain and Greece for precisely this reason). Add cannabis to the mix, and current British policy looks even more out of step with reality and the wishes of the British people. Even the older, more conservative and “middle class” (read: American working if not blue-collar class) ones.
Local Production and Prohibition
And then of course, there is this irony. GW Pharmaceuticals, one of the oldest, cannabis companies in the world, is located in the UK. It even grows its own crops there, and has a special license from the British government to do so.
Worse, in this particular situation, it also is busy bringing several cannabinoid-based anti-epileptic drugs (for children and adults) to the market.
Why on earth would a home-grown company deny treatment to a British kid with epilepsy? And how could a government grant a license to a company to develop the plant for profit, but not a child who desperately needs the drug to live?
In a move that seems more than coincidence, GW Pharma also reported this week that their product Epidiolex (for the treatment of childhood epilepsy) is being considered by the European Medicines Agency, while a separate drug also bound for the epilepsy market called GWP42006 had just failed a Phase IIa trial for focal seizures.
The business press of course, has mostly reported that the only impact of this development so far of course, is that the company took a hit on share price.
It might do a bit more than that. Starting with legislative reform and ending with the sparking of significant home-grown (and legal) competition.
The combined impact of a failed trial in Eastern Europe by the only British company licensed and qualified to produce medicinal cannabinoids for any reason, and the plight of a British boy at home who needs precisely this kind of drug (and has so far been denied it), might in fact be the tinder match that lights political and market reform if not the development of a cannabis industry (finally) in Great Britain.
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