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UN Votes to Delay Rescheduling of Cannabis for Second Time in Two Years

By Marguerite Arnold
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For the second time in two years, the United Nations Commission on Narcotic Drugs (CND) has delayed a critical vote on the reclassification of cannabis. The CND met in Vienna, Austria from March 2-6. The vote is now expected to happen in December 2020. The discussion about reclassification of the plant, however, has been going on for a little longer than that.

WHO Recommendations

There are several recommendations that are on the table (even if far from perfect). See the full text of the recommendation here.

  1. Delta 9 Tetrahydrocannabinol should be added to Schedule I of the 1961 Single Convention on Narcotic Drugs.
  2. Delta 9 Tetrahydrocannabinol should be removed from the 1971 Convention on Psychotropic Substances.
  3. The six isomers of tetrahydrocannabinol chemically similar to Delta 9 THC should be classified similarly to Delta 9.
  4. Extracts and tinctures made from cannabis should be removed from Schedule I of the 1961 Single Convention but that they should also be classified per the act. In other words, extracts with THC should be considered narcotics with medical purpose and all dealt with per a single rule.
  5. Cannabidiol products containing no more than 0.2% of Delta 9 THC should not be under international control.
  6. Preparations with THC that are made as pharmaceutical products should be reclassified as Schedule III drugs per the 1961 Convention. (Note – Dronabinol is already classified this way in the United States and has been since 2010).

What Does This Really Mean?

Given the impending lockdown of whole industries right now, but a wartime footing for certain pharmaceutical drugs and medical equipment makers, on one hand, this seems like the obvious and safest thing to do. The world needs a vaccine and direct treatments and to focus research, manpower and money in that direction.

Further, and this should hopefully galvanize the industry internationally, what this also does is keep the consumption of the plant itself basically illegal while putting the focus on professionally prepared pharmaceutical drugs.

This is short-sighted. Cannabis is unlike other medications. Further, the high cost of pharmaceutical drugs makes wider treatment policy options extremely expensive to implement.

Further, this approach continues to define cannabis – specifically Delta 9 and THC – as a narcotic.

While it is undeniably true that for recreational users, there are narcotic effects, most long term patients do not react to the drug this way – particularly if they suffer from chronic pain due to neurological issues (including movement disorders), inflammatory diseases like rheumatoid arthritis and those that destroy the body’s immune response, like HIV.

There is a need for regulation, normalization of supply chains globally and of course, medical trials.The definitions of this plant, in other words, need to change. And not just for the benefit of pharmaceutical companies, but for patients as well.

Further, in a world that is quickly headed for a global recession unseen since the Great Depression, highly priced medications are not the best Rx.

As the German government responded to President Donald Trump recently, as he tried to offer a German company a billion dollars to only develop a vaccine for use on Americans, there are clearly limits to capitalism.

The Good News

It is highly unlikely by December, nine months into a global public health crisis which is widely expected to last for at least the next two years, that the UN will delay the vote again come December. There is a need for regulation, normalization of supply chains globally and of course, medical trials.

Beyond that, recreational reform also looms at a federal level in many countries and regions.

However, given the discussions so far, it is also clear that beyond the redefinition of cannabis, there will be greater legal opportunities to expand an industry too long stigmatized by old fashioned understandings and definitions of what cannabinoids are.

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Access to Cannabis Is About to Get Easier in UK

By Marguerite Arnold
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As of March 2, right before the UN punted on reclassification of cannabis at the international level for another nine months, the UK government eased import restrictions for people in search of the drug.

Specifically, licensed wholesalers will now be able to import larger quantities of cannabis-based products and hold supplies for future use by patients with prescriptions.

Previous restrictions meant that patients had to wait for weeks or months to obtain the still highly expensive drugs (an import license from Canada can take 8 weeks).

Essentially, while welcome, this also means that every single potential cannabis patient who does not suffer from epilepsy or MS must import, via private means, a drug that is still unbelievably expensive. Those with the means are subjected to high prices and bureaucratic complications (like a regular thirty-day review of the prescription).

Cynical Cannabis Moves

While those who can afford to pay approximately $1,000 a month now have options, this is not exactly cannabis reform that is inclusive. Indeed, the entire conversation appears to be about making sure that private companies make profits rather than scientific advancement.

While the government is planning to engage with patients and to participate in trials to figure out how the NHS can utilize the drug, this is little help for sick patients now. Particularly in the middle of a global pandemic and almost as surely, global recession.

Soundbites by government ministers are also putting a cheery face on a situation that is dire, not just because of access but because of cost.

Per British Health and Social Care Secretary Matt Hancock, “We still have a long way to go. We need more research into the quality and safety of these medicines, and to do all we can to cut down the costs and remove barriers so that, when appropriate, patients can access it, including on the NHS.”

How long that might be, however, is anyone’s guess. This discussion has now stuttered on for the last several years domestically.

Why all the Delay?

As recent events, including not only Brexit and cannabis reform, but indeed the now global pandemic have proven, healthcare systems globally are not up to the kinds of threats now thrown in their direction. Designed mostly after WWII, with a far different tax and economic base to support them, as well as far different demographics, most are also clearly not up to the rigors of the 21st century.

It is not just the supply chains for cannabis or even pharmaceuticals that are in the mix of course. Food security in the UK is now also, according to one international expert, Tim Lang, World Health Organization advisor, “in serious trouble.”

The Covid-19 pandemic, in other words, caught the world with its pants down, despite numerous warnings and even models predicting almost exactly this situation as recently as last year. Just like the AIDS crisis. This time, however, there are options available.

The question is, will governments and international organizations rise to the challenge to meet them?

A New World Drug Order

The British, while behind the Germans, are unfortunately, delaying a decision which has been already extended for too long. Relaxing drug import rules are one thing. But recommendations about the uses of the drug are still very narrow in the UK (even more stringent than in Germany).

Beyond that, overall food and drug security (supply chain) issues are in the room and for drugs far from cannabis. As many have begun to point out, cannabis is now prescribed for patients (and in many countries) and these patients are the most vulnerable to a virus like Covid-19. They are vulnerable not just because their immune systems are weak, but frequently because they are also economically exposed.

As the world battles another retrovirus pandemic, perhaps it is time that the lessons of the past be learned by those with the power to make decisions that will ultimately affect billions of people globally.

How Coronavirus is Affecting the International Cannabis Industry

By Marguerite Arnold
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Frankfurt: Germany right now is not the worst place to be as a global pandemic closes borders and leads predictably to mass change overnight, which is unparalleled during peacetime. But it is still eerie. Berlin and Cologne are starting to close public spaces (like restaurants, bars and clubs).

The grocery stores and pharmacies are still stocked and open however- it is a national priority.

On Germany’s borders, Europe is closing in a way it has not since WWII. The EU is considering banning all non EU “foreigners” from entering the region for nonessential reasons for the next 30 days – albeit in an environment where leaders are also concerned about making sure supplies get through to those who need them.

It also feels like wartime – only this time the “enemy” is a virus. It is called COVID-19, and it is spreading. It cannot be “stopped” although authorities are now doing everything they can to slow it down. At risk are not only populations but also vulnerable health care systems. The goal here is to prevent masses of sick people showing up at hospital. There will not be enough space for everyone if the rapid spread of the virus is not stopped, starting with beds and ventilators. In Italy, doctors are already triaging patients (deciding, in an overwhelming influx of sick patients, who has a chance of living and who does not), because there is a shortage of staff, beds and medical devices for those who need the most care.

The German government, in particular, is clearly prioritizing slowing down the spread and mitigating the load on a system that is strong, but also vulnerable to this kind of existential overload. Jens Spahn, Germany’s health minister, sounded the alarm early about mass gatherings. The country’s Chancellor, Angela Merkel, has promised to throw “Germany’s arsenal” (funding) to help German organizations hit hardest.

But that is just one country. Italy is in lockdown, Spain is on its way this week, and many others are closing borders. In Switzerland, as of this weekend, the only shops that were open were pharmacies and grocery stores. To get in, you must wait in line outside, spaced 1 meter from other people, and use hand sanitizer as you enter.

These are not privations that any generation alive today remembers viscerally. The closest is stories, perhaps second or third hand, of what life was like here during wartime.

Both China and now Germany have sent medical supplies to Italy (the worst affected country in Europe so far), and a German company is on the front lines of producing a vaccine which is likely to be ready for human trials as of June.

What Is The Impact On The Cannabis Industry Specifically?

But how does all of this impact the global cannabis industry, especially as it is an industry still very much and by design, built on international imports? Throughout the world, including the United States, cannabis-related trade shows, expos and conferences are all being either cancelled or rescheduled to June at the earliest. President Trump also instituted a European travel ban, although this will not have much effect on the industry here, since Germany imports cannabis from Canada, not the U.S. for its medical market.

The connection to the industry from the threat of the virus itself is also on display. In Illinois, for example, some dispensaries are giving priority to their medical patients, shutting the doors to recreational customers. Just months after legalizing recreational sales, the state is now telling dispensaries to discourage crowds and prevent customers from lining up. That is not so far the case in Europe where cannabis is slowly being normalized into the regular pharmacy system. But pharmacies are also on the front lines of this epidemic – not only in that they serve front-line customers, but also deliver medicines to retirement homes.

German authorities have already suggested that they nationalize medical supply chains from Asia for vital medical supplies, including presumably vaccines and other medications as well as medical equipment, like ventilators.

Clinical trials, fast-tracked vaccine production and new drug approvals are evidence of how quickly governments can work to produce new treatment options. Countries still hampered by the slow pace of cannabis reform should look at how a global health crisis has allowed governments to bypass certain areas of red tape, untethered by high prices in developing supply chains. While cannabis reform is indeed not the same as a global pandemic, it has the ability to save lives regardless. That ability should be enough impetus for quick reform, much like actions taken by governments so far during this crisis. Not to mention the fact that many cannabis patients are also the demographic of who is most vulnerable in this epidemic – the chronically ill and the elderly.

The International Cannabis Business Is Built on Global Supply Chains

In the U.S. right now, there is a significant concern about sourcing of the vaping industry (the vast majority come from Asia). In Europe this is of course far less of an issue. The only vapes of medical designation produced here are made by German Storz and Bickel.

However, there are other considerations. Right now, more cannabis is being imported than grown in Germany legally, Europe’s still largest medical market. And so far, most of the cannabis here is coming in from Canada, Holland or Portugal although domestic production has now been seeded from Greece and Malta to countries further east. There is only one entity (the former Wayland in partnership with the German Demecan) who is now even certified to produce in Germany.

Wash your hands, limit social interaction and cancel large events. Stock markets around the globe are in free fall as investors fear the crisis will plunge the global economy into a recession. This obviously affects publicly traded companies, as well as companies looking for capital. Expect the larger cannabis companies to continue taking bigger hits on their stock price.

But while borders are being closed all over Europe to people, emergency medical supplies and the like will increasingly be given priority.

How countries begin to view cannabis in this kind of epidemic is another question. It is certainly a drug of last resort right now, highly expensive and in many cases going to the elderly and those in palliative care. For this reason alone, cannabis companies need to step up to the plate. This industry is being built to serve the chronically ill. In other words, those people who are already most vulnerable to this virus.

But how to do that? Dronabinol (manufactured in Germany) is no longer the only option now available. It was patented as a direct response to the AIDS crisis in the early 1980s. But in a country with other options now, this is also on the plate.

So what can cannabis companies do during this time of crisis? For starters, read the guidelines on how companies can do their part to mitigate the spread of disease. Wash your hands, limit social interaction and cancel large events. Consider using in-store pickup or delivery options, where legal. And use telecommunications platforms like Skype or other remote cloud solutions to manage your workforce remotely.

Cannabis companies ought to have the wherewithal to do their part in mitigating the spread of COVID-19. As the global pandemic continues to spread outside of China (the only place where new infections are now levelling off), it’s increasingly important to monitor the situation and take extra precautions to mitigate the spread.

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International Supply Chains: Considerations for European Imports

By Marguerite Arnold
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european union states

The recent decision in Germany on the reclassification of CBD (kudos to the European Industrial Hemp Association) as something other than “novel” has now opened an interesting new discussion in Germany and by extension, Europe.

It basically means that hemp plants, if they are European in origin, can be grown (under the right regulatory structure starting with organic) and even extracted without ever being considered a “novel food.”

Look for (hopefully) similar discussions now across Europe and the UK where the Food Safety Authority is also examining similar policies.

What this ultimately means, however, is that the market is clearly opening on the CBD front, but only for products that make the grade.

What should the average producer or manufacturer from North America think about when setting up a supply chain for export?

Regulations

Thanks to the new treaties in place between the United States, Canada and Europe right now, there are market openings in the cannabis industry in Europe. Starting with the fact that the cannabis bug has clearly hit the continent, but there is actually not enough regulated product to be found yet and just about anywhere.

This is keeping prices high right now, but do not expect that to last.

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Member states of the EU, pre-Brexit

Regardless, pricing of imports will not be like anything you have experienced if your background is state or even national market in the U.S. or Canada. There are higher regulations in every direction in Europe. Understanding how to translate the same into equivalencies that do not bankrupt you, overprice your products, or worse, get you in trouble with authorities is a critical first step, and not one to be taken lightly.

Get professional guidance from the country you are hoping to export to, at minimum. And that includes the legal kind. Every step of the way, you have to be certified with, at minimum, federal if not at an international certification.

No matter what cannabinoid is in the mix, this is ultimately a plant-based product. All rules one would normally think about when talking about other food products (for starters) are in the room.

While it is far from “this easy” (although thanks to the USDA’s decision about hemp, not to mention the FDA update on its own deliberations, there are now federal standards), think about the problem this way: If you were the world’s best chocolate bar, or even tomato juice, how would you hit Europe right now?

They have tomatoes here, and unbelievably great chocolate already. What is it about your offering that can stand out?  This is the million-dollar question. There are a few people and companies doing this right now, but it takes experience, and understanding the multiple regulatory guidelines involved. Once you figure that out, then you need to look at your supply chain, piece by piece and literally from the plant through end production for where you fit, and where you might not, into the regulatory discussion and market you hope to enter.

The Medical Discussion

There is now the possibility of exporting medical grade hemp and hemp extracts from the United States to Europe. However, everything must be GMP-certified to a medical standard, from organic production on up. This is an international standard, not an American one.

GMPThat qualification does not exist much in the cannabis industry in the United States (although ISO very much is) yet. Although it is dawning. On the Canadian side, there are plenty of companies in the discussion, because there is already a beaten path to export.

As the German cultivation bid proved, European certification, certainly is a high barrier to reach. Indeed, it is not only GMP certification in the room on the medical side but also rules about the import of all plant products.

From this perspective, it is also easier to import “finished” product rather than plant.

The Recreational Discussion

Before anyone gets too excited about recreational reform, the reality is that Europe is not going to step ahead of the UN (which has now pushed its next deliberation on the topic to the end of 2020). Yes, there are trials in a couple of places, but far from earth-shaking (recreational trials in the land of the coffee shop anyone?)

More interesting, of course, is what has just happened on the CBD side. But before American hemp farmers get too excited about this, they have hemp and farmers in Europe. And quite a few people have seen the light on this one already.

Sure New York state exports to Europe are probably in the offing, but so are hemp exports from the Southern states where the weather is warmer and the labor cheaper.

The European Union’s logo that identifies organic goods.

Certified labs, processing and extraction, and labelling are all in the mix. And every step must be documented as you go.

How to Proceed?

Whatever your crop or product is, take stock of the certifications you have now. If your plant was not organic, forget export anywhere. You are out of the international game.

However, with this taken care of, look at the certification requirements in Europe for extraction, processing and import of food and plant products and obtain production partners with the same – either in the US or abroad.

With luck, patience, skill and knowledge, yes, the doors are slowing opening, even to U.S.-based cannabis trade of the international kind.

Just don’t expect it to be easy, and leave lots of time for workarounds, pivots and even re-engineering at every point of the way.

India’s Cannabis Market: Examining Regulatory Frameworks Then & Now

By Shantanu Sinha, Rohit Fogla
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A Sacred Plant

In India’s ancient Vedas texts, religious scholars described cannabis as “one of the five most sacred plants.” Cannabis has been a part of India’s religious rituals and festivities for millennia. Ancient Indian Ayurvedic practices used cannabis as an active ingredient in medicines, ranging from digestion problems to blood pressure. Nearly 191 formulations and more than 15 dosage forms have included cannabis as a key ingredient in the Ayurvedic texts. The plant grows wild throughout India’s Himalayan foothills and the adjoining plains, from Kashmir in the west to Assam in the east. This accessibility and abundance of cannabis presents India with the unique opportunity to harness the plant for economic growth.

Despite the country’s long history of cannabis use, the plant remains illegal except for in government-authorised premises that produce and sell bhang (which can be either ground cannabis balls or a drink made by mixing cannabis in milk), or for research and medicinal purposes.

Regulation of Cannabis in India Today

Cannabis is misunderstood legally and industrially in India. Under the Narcotic Drugs and Psychotropic Substances (NDPS) Act of 1985, trade and consumption of both cannabis resin (charas) and the bud (ganja), are illegal and anyone found with them could face up to 20 years imprisonment. There is also a strict ban on cannabis (including hemp) production in India. Although some powers are given to the state government to grant licenses to cultivate cannabis under certain circumstances (such as for research and medicinal use), relatively few research organisations have obtained them. In fact, only the Uttar Pradesh and Uttarakhand regions, which are both in northern India, have received hemp cultivation licenses.

Kashmir region of India, the Northern-most part of the country
Image: Tanvir Kohli, Flickr

The Indian cannabis market has gathered significant attention recently, with various activists/NGOs filing court petitions demanding legalization of cannabis. They argue that the medicinal benefits of cannabis are hard to ignore, and the ideal climatic conditions for cannabis cultivation have the potential to boost the Indian economy and create millions of jobs. One of these NGOs is the Great legalization Movement, which is working to legalize the use of cannabis for medical and industrial purposes in India. In the summer of 2019, the Delhi High Court admitted a writ petition filed by GLM seeking decriminalisation of cannabis under the NDPS. The public interest litigation argues that the grouping of cannabis with other chemical drugs under the NDPS Act is “arbitrary, unscientific and unreasonable.” Although originally planned to be heard in February 2020, the hearing has been pushed back to May 1, 2020.

There is also traction among some government officials for the legalization of cannabis. Officials including Maneka Gandhi and Tathagata Satpathy have spoken in favour of cannabis decriminalisation. In November 2019, Madhya Pradesh, the second largest state in India, decided to legalize the cultivation of cannabis for medicinal and industrial purposes. As one of the poorest states in the country, it is hoped that the legalization will attract new businesses to the fore. Even more recently, it was announced in February 2020 that the BJP government in Manipur is also considering the legalization of cannabis for medical and industrial purposes.

The Market for Cannabis in India

According to a report by Grand View Research Inc., the global legal marijuana market is predicted to reach USD $146.4 billion by the end of 2025. For India, with a population of approximately 1.4 billion and a growing middle class, the potential market for cannabis products is substantial.

A number of promising Indian cannabis start-ups have arisen in recent years, some of whom are collaborating in order to grow in the domestic market. These start-ups are generally focusing on medicines, cosmetics, textiles, accessories and foods. One of the most promising is Boheco (the Bombay Hemp Company), which is backed by high-profile investors including Google India’s Managing Director Rajan Anandan, and Ratan Tata of Tata Sons. The company is agro-based and intends to reimagine the future of Indian agriculture and sustainable living with hemp. It is also a major supplier of raw material to fellow start-ups, Hempster and B.E. Hemp.

In February 2020, the India-based healthcare start-up HempStreet (who concentrate on the use of cannabis in Ayurvedic medicine) raised USD $1 million in pre-series A funding. The company will use the funding to support its technology growth, research development and to launch a new set of cannabis-based products. Abhishek Mohan, HempStreet’s co-founder said they intend to set new milestones for the medicinal cannabis sector in the country. They are also building blockchain technology to track the cannabis from seed to sale, eliminating the risk that the cannabis they grow will add to the substance abuse problem.

According to HempStreet’s founder Mohan, globally about one in five, or 1.5 billion people suffer from chronic pain. India is predicted to be ranked highest in terms of chronic pain cases by 2025, presenting a huge market for those companies who intend to create treatments for chronic pain with cannabis.

Medical Research

In government authorised research premises, India has begun its medical research of cannabis. In order for cannabis to be used for medicinal purposes, it must have both CBD and THC components in the required proportion. Research is needed on Indian cannabis to study the chemistry and breeding of the plant to ensure it is appropriate for use in medicine.

The Indian Institute of Integrative Medicine (IIIM) have taken legal license to cultivate cannabis for scientific and medical research purposes to develop products for epilepsy and cancer treatment. Under a tripartite agreement, the Council of Scientific & Industrial Research (CSIR), the India Council of Medical Research (ICMR) and the Department of Biotechnology have agreed to develop the epilepsy and cancer treatment products. The CSIR will cultivate the cannabis product and then carry out clinical work. The ICMR will then administer the clinical trials at the Tata Memorial Centre in Mumbai and AIIMS in Delhi. In February 2020, the IIIM and CSIR entered into a cross-border agreement with the Canada-based cannabis research company IndusCann. This research & development collaboration aims to create ample opportunities for developing varied medicines from cannabis. Union minister Jitendra Singh described the agreement as a “historic” achievement, and that Jammu and Kashmir will be the first in the country to develop medicines from the cannabis plant. Singh noted that, incidentally, this is happening at a time when the government is making efforts to encourage foreign investment.

Medical Cannabis Clinics

Bangalore’s Vedi Wellness Center.
Image credit: Bangalore Mirror

The doors of Bangalore’s Vedi Wellness Center opened for the first time on February 1, 2020, establishing itself as India’s first medical cannabis clinic. After five years of extensive research, HempCann Solutions will sell tablets and oils made from cannabis at the center. Since opening, the center has received over 100 calls and 25 drop-ins. The company regards Bangalore as a place that is open to new ideas and treatment methods. It was also where The Great legalization Movement began. The establishment of this center mirrors a trend in Europe, Canada and Australia in the opening of medicinal cannabis clinics. One year after the UK’s first cannabis clinic opened, it was announced in January 2020 that the UK’s Medical Cannabis Network plans to open more sites in the coming months.

Looking Forward

Despite being a trusted ingredient in the treatment of various ailments for thousands of years, the use of cannabis in modern medicine is restricted by India’s outdated cannabis laws. Although legalization is still some way off, the rising number of cannabis and hemp start-up companies, and the growing popular support for the plant’s legalization , is encouraging. Considering the medical and economic reasons in favor of legalizing cannabis, it may not be long before the Indian Government unlock the full potential that legalization would bring. For now, it will be interesting to track the success of India’s first medical cannabis clinic, and whether it will pave the way for others clinics to open across the country.


References

BBC – ‘Cannabis-based medicines: Two drugs approved for NHS’ 

Benzinga – ‘India-Based Health Care Startup HempStreet raises $1m’

Daily Pioneer – ‘India has the best cannabis hence more research is required’

Economic Times – ‘Is India losing out on a ready-to-boom cannabis market by not legalising its use?’ 

Great Legalization Movement

Grizzle – ‘Indian State Legalizes Cannabis’

Labiotech – ‘Here’s the latest new on medical cannabis from Europe and Germany’

Live Mint – ‘These Indian startups are betting on Cannabis without the high’ 

Marijuana Business Daily – ‘How India can be come a global cannabis leader: Q&A with Bombat Hemp’s Avnish Pandya’

Marijuana Doctors – ‘Medical Marijuana in India’ 

Nutra Ingredients – ‘Marijuana cultivation in India permitted for research and medicine, but nutraceuticals remain left out’

Opindia – ‘Manipur Considering Legalising Cannabis Plantation’

Quartz India – ‘Legalizing cannabis could be one solution to India’s agrarian distress’ 

The Asian Cannabis Report – May 2019

The Hindu – ‘The risks of legalizing cannabis’

The Kashmir Images – ‘CSIR-IIIM signs Agreement with IndusCann for research on cultivation of cannabis’

Times of India – ‘Delhi HC to examine plea to legalize cannabis use’

Your Story – ‘Cannabis startup HempStreet offers Ayurvedic prescription products for pain relief’

Youth Kiawaaz – ‘The Cannabis Industry: India’s Untouched Gold Mine’

Youth Kiawaaz – ‘The Complicated Relationship of India and Cannabis’

The Impact of Brexit on the Global Cannabis Industry

By Marguerite Arnold
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HMS Great Britain has now set forth from its European home port for another intriguing and very British escapade on the high seas.

So far the jury is out.

It could be the beginning of the next British Golden Age, Spanish Armada and all that. Or could it could end up (more likely) somewhere up the Khyber Pass (a sordid misadventure of British Imperialism that did not go well in the 19th century with global implications still reverberating to this day). For Netflix fans of The Crown, think “Suez Crisis” as a more recent and apt analogy. Starting with as much as a 6.7% reduction in domestic GDP already on the horizon.

Snarky historical analogies and nostalgia aside, how will Brexit influence and shape a global cannabis industry, starting at home?

The UK Is Not Actually in Regulatory Free Fall

The first thing to realize is that most of the puffery around Brexit was that with the exception of labor conditions, there is little free choice in the world of trade anymore. The players who get export and import licenses, for anything, have to conform to basic equivalency rules, no matter what they are called.

This applies to cannabis in a big way. No matter how the UK market develops domestically in other words, and that is a separate discussion.

Currently, shamefully, the domestic medical guidelines for prescription of cannabis exclude chronic pain patients and a few other obvious groups. The NHS medical market in other words, is a monopoly, set up by the current and previous governments, mainly serving GW Pharmaceutical patients who qualify for Sativex and Epidiolex. Not to mention company shareholders.

Everyone else, including those for whom these drugs do not work well, or work less well than other alternatives, are left in an international trade negotiation in their living rooms as they and or their children suffer.

The import barriers for cannabis – both from Europe and from Canada are absolutely in the room and in a very personal way for the British right now.

How they actually define cannabis, will also clarify. This will be driven now by the UK’s biggest import partners – namely Europe, the United States and Canada (although South Africa and Australia of course, will always be in the picture).

Which regulatory scheme the UK adapts, including for cannabis and of both the THC and CBD variety (not to mention other cannabinoids), in other words, will at minimum have to be broadly equivalent with all of the above. Not the other way around. No matter how much the Food Standards Agency (FSA) wants to fuss and fiddle with “Novel Food.” That alone is a canard.

Cannabis is a plant. It is time to start acting like that. And it is no more “novel” than tomatoes in many, easy-to-understand environments, including commercial ones. Not to mention will increasingly be regulated like commercial food crops – even if those crops are then also bound for dual purpose medical use.

The regulators will eventually get there – but not without a lot of tortuous twists and turns.

A “New” Market? Not So Much…

There is a lot of consultant palaver and baloney in the room right now. There is no more a new market in the UK as there was in Germany (or Canada or Colorado). Local producers are already organizing, and on the hemp front. The big ones are hip to regulations and are getting certified to enter it. Everyone else is being left on the dangerous sharp end of police raids, even with prior local approvals.

GW logoThat said, foreign producers are of course looking at the UK right now, and in a big way. The lock GW Pharmaceuticals has on the domestic market will not hold long. European producers are absolutely in the room (starting with Tilray in Portugal and Alcaliber in Spain). Not to mention what is going on in other places right now, even if of less well-known corporate branding.

Every big Canadian company is already in the room in the UK, and many Americans are now beginning to show up in the market.

However, for the most part, such ventures are doomed outside of conference sponsorships until the regulatory questions are answered if not met.

And that includes federal certifications that are easy to find – there is no one single authority that handles cannabis internationally. And there never will be. Supply chains are already global.

A Perfect Export Market

One of the biggest, so far widely discussed questions is who in Europe will start exporting to the UK (forget Holland for the moment). Not to mention producers in Spain, Greece, Poland if not Macedonia. That conversation is also on the table now. For the first time, so is Germany, and on the medical side.

Pharmaceutical producers in particular who meet international pharma standards may be the best hope yet – although right now policy makers are still looking at cars rather than cannabis to help keep Germany’s trade export quota where it feels “comfortable” domestically.

Image credit: Flickr

That too will change. And fairly quickly. See Greece, if not South Africa.

The political roil of branding and politics afoot in Germany right now makes this new kind of export market idea as a part of economic development, an inevitability.

Not to mention, at least for the present, a reverse trade in regulated British CBD products – if producers are smart about regulations – throughout the continent right now.

Of all countries, outside Switzerland, the UK has the ability to develop a broad and intriguing market in the EU – but only if they are compliant with regulations in Europe.

And this is where the policy makers in Parliament and 10 Downing Street have already misjudged if not broadly misled, not in a regulatory environment of their own, but in fact in a diplomatic “room” where the rules are already set via international standards and certifications, not to mention treaties.

The Growing Influence of Certified Organic in the European Cannabis Industry

By Marguerite Arnold
2 Comments

There is a strange, if yet so far undetected, regulatory hum in the air right now in Europe that will begin to increasingly occupy those who are in the certified industry here or looking to get in.

And no, it’s not imminent “recreational,” although it will also have vast impact on the same.

A little understood regulatory structure (so far at least within the cannabis industry) called EU-BIO is now firmly in the room.

What that is and how it will impact the industry is already starting to show up in a few places (see the new announcement by the Swiss that their recreational trial will be organic). This is of course before any dates have even been decided upon for said trial (although others have been set up in the country for about a year).

Beyond this, there are vast implications for every part of the industry, THC or CBD, medical or “lifestyle” focused.

What is EU BIO?

All food in the European Union is regulated on a “federal” level much like in the United States. The difference in Europe however, is that every European “state” or country (like Germany, Spain or Holland) also then has their own regulatory structure which is also equal to the federal standards of the U.S. – including via treaty on both the pharmaceutical and “consumer” side. In general, as a result, regulations, including in all things cannabis space related, are much stricter in Europe.

What this also means, generally, is that all food, cosmetic and human-use lebensmittel (to use the German word for everyday consumer goods like food, cosmetics and lifestyle products) must pass through regulatory agencies that are very much like the USDA and FDA in every country and on a regional European level before being approved on a national sovereign one. Where those are, and who handles what, however, is a patchwork of agencies across the continent. There is no homogenization, in other words, for an organic producer looking for the right agency to get certification from in Germany and Austria.

The European Union’s logo that identifies organic goods.

The distinctive green logo that is omnipresent in particularly German grocery stores also comes with a few high standards of its own. Namely that the logo must appear on all pre-packaged EU food products claiming to be organic within the EU and all member states as well as all imports. Even more importantly, the logo cannot be placed on “transition” projects – namely those which are hoping to fulfil the regulatory standards but are not there yet.

To complicate matters even further, of course all product that ends up as EU GMP must begin life as an organic product. Forget pesticides – radiated product is a hot topic right now as well as its certification in the German medical market.

And that also means, by definition, that all cannabis production in Europe as well as products hoping to be sold via relatively normal channels, must also meet these certifications.

The only other option of course, is what is called “Novel Food.” And even here, thanks to changes in EU BIO on the table for the next couple of years, those who hope to gain access via this kind of labelling, still need to pay attention to organic production. No matter where you are. Or what you want to sell.

Are All “Organics” Made Equal?

Just as in the medical industry and GMP, the strictures of “certified organic” are supposed to be fairly straightforward, but are interpreted by different countries and regions.

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Member states of the EU, pre-Brexit

Generally speaking, however, national or even regional “organics” are not exactly the same. For example, Canadian “organic” is not the same as EU-BIO, starting with the fact that the plants in question are not necessarily of European origin (see the same logic here as behind Novel Food). In other words, there is no automatic equality, starting with the source of the seed. But there are also other issues in the room including processing.

That said, being organic is going to be the watchword of the industry. And in this, a bit surprisingly, the US will also have a lasting impact. Why? Because many countries want to export to the US (far from cannabis) and are required to adopt similar agricultural standards (see Latin America for starters).

Bottom line: it is better to be “green”, through and through, no matter where you are, or where you are from, in the global industry going forward. By the end of 2021, certified organic supply, at every level of the industry, won’t be a “choice” anymore.

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European Cannabis is the Emerging Market to Attract North American Investment

By Mark Wheeler
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Europe continues to be the new frontier of medical and wellness developments in the cannabis industry, with various sources predicting that Europe will become the world’s largest legal cannabis market over the next 5 years. Key related statistics, include:

  • A population of over 740 million (over double US and Canada combined)
  • Total cannabis market estimated to be worth up to €123 billion by 2028 (€58bn medical cannabis (47%), €65bn recreational cannabis (53%))
  • Over €500 million has been invested in European cannabis businesses (including significant expenditure in research and development, manufacturing and distribution)

To reiterate this belief, this month, hundreds of industry experts and delegates will be attending Cannabis Europa in Madrid, to discuss the expansion of cannabis across Europe and the challenges facing the industry across the member states of the EU and the UK.

Global mainstream leans to European strength

Since late 2018, major global operators have made substantial moves into the cannabis sector. Anheuser-Busch InBev, the world’s largest beer company and maker of Budweiser, entered into a partnership to research beverages infused with two types of cannabis. Constellation, owner of Corona beer, announced a commitment for $4 billion investment in Canadian cannabis company Canopy Growth. BlackRock Inc, through five actively managed BlackRock funds, has invested into Curaleaf Holdings Inc, a dispensary operator, for a not too insignificant investment sum of $11 million (as at March 2019). Such international investments prove that cannabis has moved from the fringes and into the mainstream.

When considering the impact of mainstream cannabis, it should be recognised that major European countries have approved or are planning on implementing, legalisation of medicinal cannabis. The UK, Germany, Italy and the Netherlands already have legal systems in place for medicinal cannabis and France and Spain are currently reviewing key legislative reform to align themselves with international practices. At present the German market is the third largest cannabis market (in terms of size) behind the US and Canada.

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Member states of the EU, pre-Brexit

In addition to medicinal cannabis, several key European countries have systems in place, or are developing systems, or considering the reform of existing systems, to approve cannabis with THC content at a recreational level. The Netherlands already has a system and Luxembourg’s health minister in August 2019 announced the intention to legalise cannabis for Luxembourg residents. The Luxembourg government is lobbying EU member states to follow suit.

Whilst the EU has a labyrinth of laws in relation to edible CBD (as a novel food) which make the regulatory landscape complex, there has been an explosion of CBD products for vaping and cosmetics. Of course, with each of these products being subject to different local laws (some aligned between EU members states) in relation to vaping and cosmetic related regulations. The Brightfield Group has predicted a 400% increase in the European CBD market (including vaping liquid) from $318m in 2018 to $1.7 billion by 2023. There is also an expansion into applications for CBD with animals with many US manufacturers of CBD-infused pet food.

The European Parliament’s health committee has been calling for properly funded scientific research and there are motions to establish policies to seek to incentivise member states to advance the studies of medical cannabis, with a priority on scientific research and clinical studies – the first step necessary to drafting legislation, designed to better support the industry.

Where does the UK sit within cannabis?

Medicinal cannabis famously saw a legalisation, of sorts, by the then Secretary of State, Sajid Javid, who provided the authorisations for prescriptions for the high profile cases of Billy Caldwell and Alfie Dingley. Subsequently, on 1 November 2018, this was codified into law by an amendment to Schedule 2 of the 2001 Misuse of Drugs Regulations. This allows clinicians to prescribe cannabis as an unlicensed medicine.

There have, of course, been some high profile licensed medicines. The UK company, GW Pharmaceuticals, is the largest exporter of legal medical cannabis in the world, cultivating medical cannabis for production of cannabis-based medicines (e.g. Epidiolex & Sativex). Epidiolex (manufactured by subsidiary Greenwich Biosciences) became the first cannabis-derived medicine approved for use in the US for treatment of seizures caused by Lennox-Gastaut and Dravet syndromes (both severe forms of epilepsy).

When considering the level of research development and investment in the medicinal field, it is no surprise that the UK is the world’s largest producer and exporter of medical cannabis. Research published by the International Narcotics Control Board indicates that the UK produces over 100,000kg a year of medicinal cannabis.

UKflagPrevious guidance from the National Institute for Health and Care Excellence (NICE) indicated that further research is required to demonstrate the benefit of medicinal cannabis, citing its cost versus evidenced benefit. However, there is now renewed confidence in the UK following NICE’s approval of two cannabis-based medicines produced by GW Pharmaceuticals,  Epidiolex (cannabidiol) oral solution and Sativex (nabiximols), for routine reimbursement through the NHS.

Following the re-categorisation of medicinal cannabis in November 2018, a number of clinics have been established where specialised clinicians can start the process of prescribing cannabis based medicinal products (CBMPs). Whilst this route is not fast, and challenges are well documented as to the satisfaction of prescriptions made in the UK, there is momentum behind the development of this as a means for providing genuine and established medical care. A significant step in October 2019, was the CQC registration of one such cannabis clinic, Sapphire Medical Clinics Limited.

In November 2019, a project backed by the Royal College of Psychiatrists was announced with the aim to be the largest trial on the drug’s use in Europe with a target of 20,000 UK patients.

The UK medicinal cannabis sector is establishing a research-based approach to expand usage in the UK and across Europe.

How North America compares to Europe

Canada

Canada, as a first mover within the cannabis sector, has a multitude of large companies which are well-capitalised and have substantial international footprints. The Canadian exchanges have large listed companies looking to Europe with the intention of acquiring or investing into European operations. As of the date of writing, the 10 largest cannabis companies in Canada have an aggregate market cap of over $23.5 billion (and all registered cannabis companies in Canada having an aggregate market cap of over $46.5 billion).

Listed companies have had a tough time over the last 6-12 months with a slowdown in the market as a natural re-balancing occurs – part of which is due to rapid expansion and heavy investment into cultivation by all the major participants in the market. Over the next 6 -12 months we can expect to see management changes (some of which will be voluntary and some of which will be imposed by institutional pressure) to introduce different skill sets at board and senior management level to facilitate the oversight and leadership necessary for large pharmaceutical companies. Many operations have expanded into highly regulated products and complex supply chains whilst still operating with fundamentally the same team that established the operations with entrepreneurial efforts but, perhaps, a lack of experience in these sectors. The recent announcements by Aurora Cannabis and Tilray demonstrate that these restructurings and costs reductions have already commenced. However, with increased experience at board level and an improvement of profitability focused on sustainable business practices, should come new opportunities on a global scale for these North American operations.

The US

The US market, because of the complexity of state and federal laws not being fully aligned, is closer to its infancy than the Canadian market. This is not too dissimilar to the European market. That said, there are a number of well-funded and quite large US enterprises. A limited number of these, such as Tilray, are looking to expand into Europe.

Many of the companies in the US have, and continue to, expand quickly so we can expect to see a number of mergers and acquisitions. We are likely to witness Canadian and US entities merging with one another with the potential for acquisitions for operations within Europe. It is unlikely that the North American companies will risk their capital through organic growth so would be expected to be identifying “turnkey” solutions.

One of the major challenges facing US companies is the complexity of supply and distribution. This is largely a result of the complexities for state and federal laws interacting with one another as well as international importation and exportation with US states.

How you can invest within the UK and Europe

Developments in the fields of research and development are anticipated to add further weight to the lobbying of government and regulatory bodies across Europe.The UK remains, despite the events of Brexit, a major financial hub for Europe. The London market has seen the growth of several investment and operation cannabis companies. This includes private companies such as; EMMAC Life Sciences Limited and the operations formerly trading as European Cannabis Holdings (now demerged into several new entities including NOBL and LYPHE) as well as publicly listed companies; including Sativa Group PLC (the first publically listed cannabis specific company in the UK) and World High Life Plc, both operating on the NEX Exchange.

The Medical Cannabis and Wellness Ucits ETF (CBDX), Europe’s first medical cannabis ETF fund, domiciled in Ireland, and which has been passported for sale in the UK and Italy, has also caused a renewed stir within the market with a further platform for listed investment.

As the regulatory framework evolves further there is an anticipation that more medicinal cannabis and CBD related enterprises should have the opportunity to list on public exchanges, whether in the UK or in European countries.

Conclusion

Despite a period of slow down following the natural rebalancing of the fast-growing North American markets for the cannabis sector, there is renewed confidence in the expansion of the industry. Developments in the fields of research and development are anticipated to add further weight to the lobbying of government and regulatory bodies across Europe.

There is an increased push for a public dialogue and consultation in relation to medicinal and recreational cannabis in the UK, backed by several mainstream media platforms. This is likely to be shaped in some parts by national debates in Luxembourg and other European countries as they consider their own domestic laws.

With European parliaments across the EU (including the UK) hopefully having time freed up to discuss other political matters now that Brexit is progressing, the next 18 months should prove an exciting time within the European cannabis sector.

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German Medical Cannabis Imports Doubled in 2019. So What?

By Marguerite Arnold
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Germany, for all of the other developments going on right now (globally) is still chugging forward, in integrating medical cannabis. It is slow going – but certainly going.

In terms of overall numbers, there is certainly an interesting story to tell. The import of medical cannabis grade flowers also more than doubled last year over 2018.

Hooray.

But does the “average” German patient have easier access even with more product in the market?

Answer: There are certainly more Germans with more cannabis prescriptions. See the increase in imports and the numbers from the statutory health insurers.

But even though these are clearly positive signs, it has not necessarily gotten much easier so far. That said, it is about to get quite a bit cheaper.

The Mainstreaming of the German and EU Cannabis Market

National pride aside, the German government is in fact the entity which got this whole ball of wax rolling here, and it is they who still determine the pace of regulated change. The cultivation of medical cannabis is now fully underway in the country, with Demecan still in the most interesting position. Aurora has just gotten another certification and is back on the ground in pharmacies.

But many issues remain.

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Photo: Ian McWilliams, Flickr

On the ground, pharmacists cannot get enough product on a reliable basis. Patients are still caught in the never-ending merry-go-round of chasing down willing doctors, battling insurance companies for reimbursement and trying to have a good relationship with their local pharmacist. If, of course, they can afford both the drug itself, along with its outlying costs and frustrations to access, and their health insurance company plays ball.

Even then, chances are, the most seriously ill patients are still relying on “other” sources. A reference wholesale price (of €2.30 a gram set by the German government last year) is likely to stabilize the market if not pricing. For everyone – not just those on public healthcare.

The plant is becoming commoditized, even if slower than most people in the industry long to see.

On top of that, while certification is currently gaining steam in the industry, especially in Europe, there are many problems and issues remaining – on everything from processing of the flower to registration of products made from it. And in both the medical and recreational market.

Overall, in other words, markers are all good. But the process is going to be (very) slow if steady for the next several years.

Don’t Expect Continual Explosive Growth

Dronabinol is still at least a third of the public healthcare market. The majority of patients who receive the drug still fit the same overall treatment profile (chronic pain). And doctors are still highly reluctant to consider it as a more standard practice.

But the most important conversation, by far, is still basic legalization and regulation beyond that. That too will change. Not to mention the recreational discussion now absolutely on the table. Four years of a medical market only continue to open doors, not close them. And elsewhere, across the continent, reform is generating new producers from not only southern Europe but just about everywhere else on the globe where cannabis is becoming legit.

For the next year, however, as all of these issues continue to be debated, and at both a national and increasingly local level, don’t expect “explosive” anything.

Those who have established themselves are dug in. It is going to be trench warfare from now on out, barring a major surprise, for the next few years.

What Is Likely To Change The Equation?

CBD battles are absolutely strategic manoeuvres through the intricacies of this regulatory shift (legalization of the plant). This alone, particularly for the next few years, is likely to also move the conversation forward – and not just on the medical front.

It is also patently obvious that governments (starting with Italy) are beginning to again consider the topic of limited home grow and recreational reform.

But the most important conversation, by far, is still basic legalization and regulation beyond that. And until that happens, nothing will be “normal” about a market that is clearly being allowed to grow, in a market which is being carefully tended and managed.

“Explosive” in other words, is far from the agenda of anyone in authority who is making the decisions. And that includes regulated market growth and numbers for the next 48 months at least.

Is 2020 the Year of New CBD Markets?

By Marguerite Arnold
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If you were at Davos this year, you heard alot about CBD. The cannabinoid will again be a headliner in business analysis and bottom line reports this year. But as the market matures, globally, what is the real temperature of the industry? And how fast will regional hiccups resolve?

Regulatory Issues Are In The Room

From the US state markets to the EU, hemp is coming into its own, even though almost everyone also refers to it as CBD (cannabidiol).

european union statesIn the United States, things are even more murky because of a lack of federal reform and the individual rules and regs of existing state markets. To an extent, the market is being “federalized” on the testing front (see ISO for example) and GMP (at the federal pharmaceutical level), producers are beginning to be able to get certified on a global scale. However, the vast majority of the U.S. market is not anywhere close to the regulatory muster now required of even the most-humble commercial hemp farmer anywhere in the EU.

In Europe, the entire cannabis discussion is already far more defined, and as a result, very much likely to set the rulebook globally, especially as so many people want to import here. And this is going to be a bugbear for the next two years. The rules on EU Bio for starters, are still in flux. And where this ties into GMP downstream, those who brave such waters are in for choppy seas for the time being.

Tie this into Novel Food, and this is an area right now that should only be charted by the most experienced navigators, and not just using the stars.

The Battle Is On – Both On The High Seas And The High Streets

For all the desire to bring “whole plant” into the room, (in other words recreational cannabis and medical cannabis with the THC still attached), CBD fever at least has spread in Europe faster than any pending flu epidemic from China.

There are positives and negatives that come with this discussion. Namely, the ever pounding need to commercialize the legal industry and remove all Drug War stigma and barriers from the discussion.

CBD-only legalization is also a powerful answer to those who claim that if CBD is legit, then the police will not chance busting people, no matter how much THC is or is not in the offending substance in question.

These are also the same people frequently who also have a stake in some level of the industry as it legalizes. And this is also where some of the fiercest battles for regulatory control and definition have also begun to happen.

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

Where they have come to a head (see Italy), it appears that governments are indeed reconsidering the whole “insurance” if not “home grow” discussion. Not to mention, as a result, recreational after that. The conversation in Italy, of all places, right now, is a good indication of this trend. It is a conservative country in every way, yet it is the first to not only cancel a government controlled monopoly license, but also the largest country in Europe to again tinker with limited home grow of cannabis plants.

Ironically this is also the place where the most dedicated “CBD revolutionaries” have also hit. In places like the UK right now, the lack of appetite for EU regulatory control generally (see Brexit) has resonated, particularly with a pro cannabis crowd sick and tired of more delay on a topic whose day in the sun has finally come. If not more government wobbles on discussion on the medical side (see the recent NHS decision to ignore cannabinoids and chronic pain).

In other places like Europe however, and this certainly showed up at Davos, CBD is a hardy foot soldier if not cannaguerilla from the hills that is beginning to chalk up discussions if not yet wide-ranging sovereign victories.

This is absolutely clear to see in places like the African market (and Lesotho is about to become a hot ticket globally if not within the African continent). Indeed, the first seeds were sown several years ago).

Yes, it is ridiculous that CBD is being banned. And it is also obvious that governments are unwilling to be bankrupted over medical cannabis of any kind or THC concentration, and know they must also seek other ways to deal with the issue.

CBD, in other words, is a kind of Che Guevara that is going to take down a few of the established orders in this revolution that is now global. And for that very reason, taking on a character if not place at the table all of its own.