Tag Archives: government

By Marguerite Arnold

Disclaimer: Marguerite Arnold has just raised the first funds for her blockchain-based company, MedPayRx in Germany (and via traditional investment funding, not an ICO). She will also be speaking about the impact of blockchain on the cannabis industry in Berlin in April at the International Cannabis Business Conference.

To read the first part of this series, click here. The Paragon class action lawsuit is likely to shake up two industries – the cannabis world, which has been following this situation at least in the industry press since the company began to raise money – and the ICO space in general. Why? Just the combination of the two topics is a guaranteed conversation starter. In addition, given the focus on whether tokens are securities or not (or whether so-called “utility tokens” are as well, depending on how they are used and sold) far beyond cannabis, this case may well begin to set precedent on the entire subject. Even more worrying for Paragon in particular right now, beyond the federal government, coordinated efforts are underway by both law firms and consumer groups to recruit aggrieved investors as suit plaintiffs. Beyond the United States and far from the Paragon case specifically, banks in Europe have begun to set guidelines on cryptocurrency and ICOs too. It is not routinely hostile everywhere (see Switzerland if not many Asian countries). But the map is now being defined.

The dilemma that Paragon is now facing is also something that has been coming for some time both for the company and others like them – and from both the cannabis investment and crypto coin directions. Digitally astute cannapreneurs take note: Do you really want your dream business used to define precedent as a defendant in a class action? Or targeted by the new SEC cyber unit whose job is to regulate ICOs (and probably “crowd sales” too?). That regulatory glare is coming everywhere. And soon. Globally.In the world of cannabis, in particular, it is also very important to be careful.

If issuing tokens, particularly if you sell them to raise money – no matter what that money will be used for – realize what you are doing. Even if you state to the world that these are not “investment” vehicles” but “utility” tokens. If you sell them, they are by definition, even if not federally litigated and defined yet in the United States, a contract for future worth, services or other benefit. An IOU in other words. As such they are also derivative securities, which is why the regulatory agencies, barely 10 years out of the last global financial meltdown, are now starting to see parallels. So much so, in fact, that SEC Chair Jay Clayton warned in January that any attorneys who are involved in ICOs might be in breach of professional obligations. Other jurisdictions are following suit.

In the world of cannabis, in particular, it is also very important to be careful. Selling (soon to be federally if not internationally regulated) tokens or securities in general for that matter for certain services or products that can be illegal in some jurisdictions is also a space that cannapreneurs are going to find challenging. See the banking problems of the entire U.S. cannabis industry. Same issue.

This is also going to get even more complicated very soon. Particularly in a world of shifting regs and when it comes to “brand creation.” Right now, for example, a crowdfund or ICO (the terms can be used interchangeably, token issue or not) for a “global cannabis lifestyle brand” promoted and sold online is highly problematic just about everywhere. Why? You cannot transport cannabis across state lines in the U.S. Americans and Israelis also still cannot export anywhere. You also cannot sell what is considered “medical” marijuana to a European regulator if it is not GMP certified. It is, according to local definition, most certainly not “medical”. You may also not distribute cannabis online in countries like Germany. And of course, cannabis itself is still federally illegal in many places, including the United States. Issuing a token or security with the intent of engaging in such practices is ill advised at this juncture. No matter what it is labelled.

Those are also situations where investors could legitimately also sue the ICO or crowd sale holder for breach of securities laws or outright fraud.

Beyond the world of banking law, users face other quagmires, depending on your situation and how you use and issue tokens. Or you certainly will in the emerging future. If you use tokens in situations where members “vote” you may also run into other problems. Like civil liberties issues. Poll taxes (where you force people to pay before access to voting or weigh the impact of their votes on financial contributions) is illegal in many jurisdictions and even more specifically certain use cases that may not always be initially obvious. How that plays out in blockchained ecosystems is a discussion of the future, but it is coming. Along with other labour and regulatory issues surrounding the use of “smart contracts.” Which are also known as “utility tokens.” See, it gets confusing. And fast.

In the cannabis space, liabilities sprout more quickly than even the fastest growing strain.As a result, the first major issue that any cannabis business considering a token generation event (or TGE) will face, no matter whether it is state or federally legit in said jurisdiction, has nothing to do with cannabis but rather rather cryptocurrencies and ICOs – and for right now federal if not international financial law – but look for that to also change as the space develops.

For the present, in most places, token issues where monetary value is assigned or implied are considered securities or even defined outright as currency. Or they will be soon. This means that if you are issuing a new coin for any purpose that you intend to sell for any purpose, including an ICO, especially one that will supposedly be used to pay for goods or services, or even to “assetize” the token to give it a market value (the value of the asset it is assigned), you are now in the federal end of the swimming pool. And federal if not international law is not for novices or sissies much less non-lawyers when it comes to crypto coin. There are great white sharks everywhere in this often-strange digital ocean. That is even before you get to cannabis.

In the cannabis space, liabilities sprout more quickly than even the fastest growing strain.

This is also easy to illustrate – even beyond the concept of an ICO. Say you are a cannabis producer in Colorado – where much of the legal cannabis industry we know today was born. You are in business, have a license and even own your grow space and the acres of real estate that it sits on. But you also want to access additional capital (including that of the international kind) and are, as an aside, overwhelmed by the demands of your cash business. You meet an energetic young blockchain geek who says she can sign you up to her service that will create your white paper, website and even hook you up to one of the several “insta-mint” crypto coin services now available for several thousand dollars (don’t forget lawyer’s fees), plus hiring a good PR firm to manage the ICO process.

Groovy.

You issue your own coins and literally mint them for the sole purpose of assigning each coin to every dried gram of your product that you produce to test the market before potentially holding an ICO. You then “sell” this bud (at wholesale prices) to a dispensary with a wallet that will accept your coin via a smart contract that only releases the funds when the right amount and quality of product is delivered to the dispensary. As a clever marketing technique, you also agree with the recreational dispensary you are working with (who happens to be in Aspen) that you both will also now offer jointly issued coins, at a higher retail price, to any tourist with a medical card or any age-appropriate recreational user who has the ID to prove it, to “pre-buy” their cannabis on the way to après ski and have it delivered, no questions asked, at the hot tub. You advertise the service with a cannabis-friendly ski package operator and travel agent, and voila – customer base is assured. If you have any celebrity friends who are willing to promote it, even better. And why not, while you are at it, do some LinkedIn outreach.

No cash needed either. ID verification happens with coin purchase.

Easy, right? So many headaches solved with one coin to rule them all. Banking issues evaporate along with a lot of work for accountants at both ends of the conversation. And the price of the coin you issue cannot be illegally pumped and dumped because the “price” is set by the state or federal market and/or supply and demand and/or another kind of asset (like a piece of real estate designed to be a startup incubator space for which people also pay entrance fees in your tokens, to enter and use). Then you can offer these “coins” for sale, at those market prices, set by the dried bud you are growing, to anyone, anywhere, to invest in too. Right?

No ICO, even. No problem. After all, you say they aren’t securities but “utility tokens.”

Wrong.

By definition, such activity is illegal in the United States if it has anything to do with the plant for the same reasons the U.S. industry remains a mostly cash-only business. There are several U.S. start-ups trying to construct “legal” payment gateways for the industry right now in the lower 48 plus 2 (see CanPay in Hawaii) and some creative efforts in Europe. However, all of those depend on the willingness of a banking institution on the other end to allow that to happen. See Uruguay if you still remain optimistic about any American efforts right now. Not to mention the newly awoken willingness of the federal DOJ to prosecute for money laundering in a post-Cole-memo world. And that includes you too, California.

But this is an issue that is not just limited to the United States.

In other places, like Canada, Australia, Israel and the Eurozone, legitimate cannabis businesses have bank accounts. And banks are absolutely involved in both the blockchain and crypto space – see Ripple. As a simplified payment gateway, the technology is imminently useful, if still forming. But banking authorities are so concerned about ICOs that they are moving, quietly, to implement policies against them even as they are still accepting cyber currency (in limited ways and via strictly controlled channels).

Given such concerns and divided loyalties, it is unlikely that authorities in Canada will sit this one out, even though (and perhaps because), to date, the most intriguing ideas about cryptocurrency and cannabis have tended to waft from this part of the world lately given what is about to happen this summer.

Most dangerous of all to the budding crypto cannapreneur is Germany – home of legal, public health insurance covering medical cannabis. Banking regulators in Frankfurt, in particular, have taken a dim view of even just regular old crowdfunding. Add a token into the mix and the Germans are even less amused. The persistent rumor in the Fintech community in Frankfurt this March is that German banking authorities are refusing to accept any funds raised during an ICO anywhere. Verboten for any purpose. Why? Even if they know who you are, and all of your investors meet their KYC requirements, they do not know the source of the cyber currency coming from those investors. No dice. And KYC in this instance does not refer to a new brand of cannabis-flavored lubricant. It is a term that means, in the most comprehensive understanding of how it must be used, not only “know your customer” but being able to verify all points of data on a chain. Including the coin issuer, purchase conditions, currency used to purchase the same and “chain of title” downstream. If you are confused by this already, you should not be engaged in an ICO right now.Not all of these models or even the ICOs that use them are scams.

Add cannabis to this recipe, and every bank in Germany, even the one at the moment who is still more or less openly participating in ICOs, if not the rest of the European financial community, will probably walk. Even if you reach your “hard cap” (the maximum amount you hope to raise) that might be in the tens if not hundreds of millions of euros. In that case, it will probably be even harder to find a bank to accept your business. Worse, you may never raise the amount you hope for. At that point, you cannot go back to traditional venture capitalists – or anyone else – for more money. You are done. You must start over from scratch. If there was an asset of any kind involved (including a license to do business) legally, everyone who holds a coin owns a piece of it. See securities law. This is precisely why you can never raise money again against that asset or with the corporate entity that owns it. Or at least not without a lot of legal fees or begging your peeved investors for more money. Legally, at that point, they could require you to sell all assets associated with the corporate entity holding the ICO. And they probably would. For investors that is the best-case scenario. ICOs for concepts with no assets or strategic partnerships in place at the time of the “token sale,” create many lose-all scenarios for investors.

There are many pitfalls to this world – and not just from the cannabis side.Issuing a “token” that someone has to pay for that acts like cash (even if to buy goods and services in the future from other members of the ecosystem and social community that crypto coins create) that also is vulnerable to market pricing, is another quagmire. In fact, it might be, beyond any techno or financial queasiness about blockchain, the biggest reason that this industry should look, and with considerable caution, at all tokenized and ICO models that also premise their worth on the idea that such coins will inevitably increase in worth over time. There is also anti-cartel, monopoly and market discrimination to consider.

Not all of these models or even the ICOs that use them are scams. There are and will be valuable alt currencies and tokens in the future (even without a cash value assigned). All of the top start-ups in the current ICO space, in fact, are finding unique ways to create a real alternative currency with values attached that are indisputable. And not all of them will succeed.

However, that is not true of the cannabis business at this juncture. The plant, much like cryptocurrency and beyond that, blockchain itself, has not reached mainstream status yet – starting with market economics and regulation that is already international. A pot-based coin, no matter where it is issued and by whom (including a federal government), would run into multiple issues with valuation just because the price of cannabis itself right now is so volatile, not to mention unevenly priced thanks to jurisdictional restrictions and barriers. For that reason, there is no way to issue a “cannabis coin” with global relevance, much less global value.

And that, of course, is beyond the issue of subsequently selling those coins on exchanges that have been repeatedly hacked, fail to give customers access to their accounts, or are, in the case of China, banned outright (which also deemed ICOs illegal last September).

There are many pitfalls to this world – and not just from the cannabis side. Part III of this series will look at some of the biggest opportunities when cannabis integrates with the DLT (distributed ledger technology).

March 1, 2018

Colorado vs. California: Two Different Approaches to Mold Testing in Cannabis

By Swetha Kaul, PhD

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Across the country, there is a patchwork of regulatory requirements that vary from state to state. Regulations focus on limiting microbial impurities (such as mold) present in cannabis in order for consumers to receive a safe product. When cultivators in Colorado and Nevada submit their cannabis product to laboratories for testing, they are striving to meet total yeast and mold count (TYMC) requirements.In a nascent industry, it is prudent for state regulators to reference specific testing methodologies so that an industry standard can be established.

TYMC refers to the number of colony forming units present per gram (CFU/g) of cannabis material tested. CFU is a method of quantifying and reporting the amount of live yeast or mold present in the cannabis material being tested. This number is determined by plating the sample, which involves spreading the sample evenly in a container like a petri dish, followed by an incubation period, which provides the ideal conditions for yeast and mold to grow and multiply. If the yeast and mold cells are efficiently distributed on a plate, it is assumed that each live cell will give rise to a single colony. Each colony produces a visible spot on the plate and this represents a single CFU. Counting the numbers of CFU gives an accurate estimate on the number of viable cells in the sample.

The plate count methodology for TYMC is standardized and widely accepted in a variety of industries including the food, cosmetic and pharmaceutical industries. The FDA has published guidelines that specify limits on total yeast and mold counts ranging from 10 to 100,000 CFU/g. In cannabis testing, a TYMC count of 10,000 is commonly used. TYMC is also approved by the AOAC for testing a variety of products, such as food and cosmetics, for yeast and mold. It is a fairly easy technique to perform requiring minimal training, and the overall cost tends to be relatively low. It can be utilized to differentiate between dead and live cells, since only viable living cells produce colonies.

Petri dish containing the fungus Aspergillus flavus.
Photo courtesy of USDA ARS & Peggy Greb.

There is a 24 to 48-hour incubation period associated with TYMC and this impedes speed of testing. Depending on the microbial levels in a sample, additional dilution of a cannabis sample being tested may be required in order to count the cells accurately. TYMC is not species-specific, allowing this method to cover a broad range of yeast and molds, including those that are not considered harmful. Studies conducted on cannabis products have identified several harmful species of yeast and mold, including Cryptococcus, Mucor, Aspergillus, Penicillium and Botrytis Cinerea. Non-pathogenic molds have also been shown to be a source of allergic hypersensitivity reactions.The ability of TYMC to detect only viable living cells from such a broad range of yeast and mold species may be considered an advantage in the newly emerging cannabis industry.

After California voted to legalize recreational marijuana, state regulatory agencies began exploring different cannabis testing methods to implement in order to ensure clean cannabis for the large influx of consumers.

Unlike Colorado, California is considering a different route and the recently released emergency regulations require testing for specific species of Aspergillus mold (A. fumigatus, A. flavus, A. niger and A. terreus). While Aspergillus can also be cultured and plated, it is difficult to differentiate morphological characteristics of each species on a plate and the risk of misidentification is high. Therefore, positive identification would require the use of DNA-based methods such as polymerase chain reaction testing, also known as PCR. PCR is a molecular biology technique that can detect species-specific strains of mold that are considered harmful through the amplification and analysis of DNA sequences present in cannabis. The standard PCR testing method can be divided into four steps:

The double stranded DNA in the cannabis sample is denatured by heat. This refers to splitting the double strand into single strands.
Primers, which are short single-stranded DNA sequences, are added to align with the corresponding section of the DNA. These primers can be directly or indirectly labeled with fluorescence.
DNA polymerase is introduced to extend the sequence, which results in two copies of the original double stranded DNA. DNA polymerases are enzymes that create DNA molecules by assembling nucleotides, the building blocks of DNA.
Once the double stranded DNA is created, the intensity of the resulting fluorescence signal can uncover the presence of specific species of harmful Aspergillus mold, such as fumigatus.

These steps can be repeated several times to amplify a very small amount of DNA in a sample. The primers will only bind to the corresponding sequence of DNA that matches that primer and this allows PCR to be very specific.

PCR testing is used in a wide variety of applications
Photo courtesy of USDA ARS & Peggy Greb.

PCR is a very sensitive and selective method with many applications. However, the instrumentation utilized can be very expensive, which would increase the overall cost of a compliance test. The high sensitivity of the method for the target DNA means that there are possibilities for a false positive. This has implications in the cannabis industry where samples that test positive for yeast and mold may need to go through a remediation process to kill the microbial impurities. These remediated samples may still fail a PCR-based microbial test due to the presence of the DNA. Another issue with the high selectivity of this method is that other species of potentially harmful yeast and mold would not even be detected. PCR is a technique that requires skill and training to perform and this, in turn, adds to the high overall cost of the test.

Both TYMC and PCR have associated advantages and disadvantages and it is important to take into account the cost, speed, selectivity, and sensitivity of each method. The differences between the two methodologies would lead to a large disparity in testing standards amongst labs in different states. In a nascent industry, it is prudent for state regulators to reference specific testing methodologies so that an industry standard can be established.

February 28, 2018

Carry On Cannabis: UK Parliament Debates Reform (Again)

By Marguerite Arnold

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The British Parliament considered a new right last Friday – the right of chronically ill patients to treat their conditions with cannabinoids. The bill to reform the law and allow medical use, the Legalisation of Cannabis (Medicinal Purposes) Bill 2017-19 was also re-read. It was first introduced last October.

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).

epidiolex — GW Pharma said their product Epidiolex (for the treatment of childhood epilepsy) is being considered by the European Medicines Agency

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.

If this doesn’t, probably nothing will.

February 22, 2018

Emerald Conference Showcases Research, Innovation in Cannabis

By Aaron G. Biros

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Last week, the 4^th annual Emerald Conference brought attendees from around the world to San Diego for two days of education, networking and collaboration. Leading experts from across the industry shared some of the latest research in sessions and posters with over 600 attendees. The foremost companies in cannabis testing, research and extraction brought their teams to exhibit and share cutting edge technology solutions.

The diversity in research topics was immense. Speakers touched on all of the latest research trends, including tissue culture as a micropropagation technique, phenotype hunting, pharmaceutical product formulation, chromatography methods and manufacturing standards, to name a few.

On the first day of the event, Ken Snoke, president of Emerald Scientific, gave his opening remarks, highlighting the importance of data-driven decisions in our industry, and how those decisions provide the framework and foundation for sound progress. “But data also fuels discovery,” says Snoke, discussing his remarks from the event. “I told a story of my own experience in San Diego almost 30 years ago while working in biotech, and how data analysis in a relatively mundane and routine screening program led to discovery. And how we (the folks at Emerald) believe that when we get our attendees together, that the networking and science/data that comes from this conference will not only support data-driven decisions for the foundation of the industry, but it will also lead to discovery. And that’s why we do this,” Snoke added.

Snoke says the quality of the content at the poster session was phenomenal and engaging. “We had over 500 attendees so we continue to grow, but it’s not just about growth for us,” says Snoke. “It’s about the quality of the content, and providing a forum for networking around that content. I met a scientist that said this conference renewed his faith in our industry. So I firmly believe that the event has and will continue to have a profound and immensely positive impact on our industry.”

Introducing speakers as one of the chairs for first session focused on production, Dr. Markus Roggen says he found a number of speakers delivered fascinating talks. “This year’s lineup of presentations and posters really showcase how far the cannabis industry has come along,” says Dr. Roggen. “The presentations by Roger Little, PhD and Monica Vialpando, PhD, both showed how basic research and the transfer of knowledge from other industries can push cannabis science forward. Dr. Brian Rohrback’s presentation on the use of chemometrics in the production of pharmaceutical cannabis formulations was particular inspiring.”

Shortly after Snoke gave his opening remarks, Dr. Roggen introduced the first speaker, Roger Little, Ph.D., owner of CTA, LLC. He presented his research findings on phenotype hunting and breeding with the help of a cannabis-testing laboratory. He discussed his experience working with local breeders and growers in Northern California to identify high-potency plants early in their growth. “You can effectively screen juvenile plants to predict THC potency at harvest,” says Dr. Little. The other research he discussed included some interesting findings on the role of Methyl jasmonate as an immune-response trigger. “I was looking at terpenes in other plants and there is this chemical called methyl jasmonate,” says Dr. Little. “It is produced in large numbers of other plants and is an immune response stimulator. This is produced from anything trying to harm the plant such as a yeast infection or mites biting the stem.” Dr. Little says that the terpene has been used on strawberries to increase vitamin C content and on tobacco plants to increase nicotine content, among other uses. “It is a very potent and ubiquitous molecule,” says Dr. Little. “Cannabis plants’ immune-response is protecting the seeds with cannabinoid production. We can trick plants to think they are infected and thus produce more cannabinoids, stimulating them to produce their own jasmonate.”

Dr. Hope Jones, chief scientific officer of C4 Laboratories, spoke about tissue culture as an effective micropropagation technique, providing attendees with a basic understanding of the science behind it, and giving some estimates for how it could effectively replace cloning and the use of mother plants. You could overhear attendees discussing her talk throughout the remainder of the show.

Dr. Jones has worked with CIJ on a series of articles to help explain cannabis tissue culture, which you can find here. “In this example, we started with one vessel with 4 explants,” says Dr. Jones. “Which when subcultured 4-6 weeks later, we now have 4 vessels with 16 plants.” She says this is instrumental in understanding how tissue culture micropropagation can help growers scale without the need for a ton of space and maintenance. From a single explant, you can potentially generate 70,000 plants after 48 weeks, according to Dr. Jones.

Those topics were just the first two of many presentations at Emerald Conference. You can take a look at some of the other presentation abstracts in the agenda here. The 5th Annual Emerald Conference in 2019 will be held February 28th through March 1^st in San Diego next year.

February 7, 2018

MGC Pharma Makes Its Slovenian Moves More Final

By Marguerite Arnold

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Right now the map of Europe, from a cannabis cultivation perspective at least, is shaping up to be very much like a game of Risk. Throw the dice, move your armies (or more accurately line up your financing), and apply for federal import and cultivation licenses.

In the process, all sorts of interesting strategic plays are popping up. And as a result, here is a new and actually pretty cool “alternative” reality that is easy to verify in several different ways. Medical cannabis is being cultivated in multiple countries across Europe as of 2018, however unbelievable this was even four years ago. Even though it is still cleary just early days. And those cultivators are already international, operating across federal jurisdictions in Europe and across both the Atlantic and Pacific oceans.

With all the excitement and attention paid to the American hemisphere and the European moves of big Canadian LPs (and they are pretty amazing), there are still other moves afoot that are absolutely of note. Specifically, Australian firms and MGC Pharma in particular, have been moving steadily to establish both distribution and cultivation presence on the ground in Europe.

CannEpil MGC — CannEpil, the company’s first pharmaceutical-grade medical cannabis product for the treatment of refractory epilepsy.

The latest news? MGC’s production facility in Slovenia was officially inspected by authorities and issued an interim license for its production plant in January, before presumably being given a green light of approval permanently. The company is also moving forward with the production of CannEpil, the company’s first pharmaceutical-grade medical cannabis product for the treatment of refractory epilepsy.

Refractory epilepsy affects about 30% of all those who suffer from the condition. Refractory is one of those words however, that hides its real meaning. Translation for those without an MD? This is “drug resistant” epilepsy. Resistant to all drugs before, of course, except cannabinoids.

And that is a welcome relief for patients domestically and throughout Europe. It is also a note to investors looking for savvy Euro plays right now.For all manufacturers now considering entering this market, this is a complicated environment to begin negotiating

This is a major win for MGC. Not to mention a vibrant medical market. No matter where specialty drugs are now going to be sourced from.

A Treatment-Driven “Branded” Pharma Market

What more traditional American pharmaceutical companies have known for a long time (certainly since the 1950’s) is now a fact also facing all cannabis brands coming to the European market and Germany in particular. The regulatory environment is hostile to the extreme for Auslanders in particular. Specifically, the development of “branded” or “name brand” drugs runs economically and philosophically counter to the concept of public health insurance itself even as their market accessibility is required by the same. This is even more the case for foreign firms with such ideas.

Here is the problem. Name brands are expensive. They are also usually outlier drugs for specific, relatively rare conditions. This is also the place where new drugs enter the market, no matter what they are.

In an environment where the government negotiates bulk contracts for common drugs and these can be bought at every apotheke (pharmacy) for 10 euros and a doctors rezept (prescription), the chronically ill and those with drug resistant conditions are left out of the discussion. They face steep and usually inaccessible bills up front for all meds not in bulk purchase categories. And that as of last year in Germany specifically, includes cannabis. That is the case even though technically the government is now buying cannabis in bulk and making purchase commitments to foreign companies for the same. Insurance companies, however, are still forcing patients to pay the entire out of pocket cost up front and wait to reimbursed.

“Generic” Brands For Off label Chronic Conditions

However medical cannabis is clearly not just another drug. Cannabis falls on both sides of every fence in this discussion.

The first problem is that the providers (importers and soon to be domestic cultivators) are private companies. All of them are foreign helmed at this point, with a well-developed bench of branded products. That makes all cannabis drugs, oil and flower, by definition, fall into the “expensive” branded category immediately. The German, Italian, and Danish governments appear to be now negotiating bulk buys during a licensing season that is well on the way to domestic cultivation too. That alone will affect domestic prices and new products. But again, this is now several years behind other countries – notably MGC in Slovenia, Tilray in Portugal, all things now afoot in Denmark and clearly, Greece.

Next, cannabis’s status as a still imported, speciality, semi-trial status in the EU means it is in the most restricted categories of drugs to begin with (no matter the name or strength of the cannabinoid in particular). And because it can be bought as bud, in an “unprocessed” form as well as processed oils or other medicine, this is throwing yet another spanner into the mix.

Look for distribution deals all over Europe as a result, starting with PolandThen there is this wrinkle. Cannabis (even CBD) is currently considered a narcotic within the EU and even more specifically the largest continental drug market – Germany. The German regulatory system in particular, also imposes its own peculiarities. But basically what this means in sum is that the legal cannabis community including distributors and pharmas at this point, have to educate doctors in an environment where cannabis itself is a new “brand.” Who manufactures what, for the purposes of German law, at least, is irrelevant. It is what that drug is specifically for that matters.

For all manufacturers now considering entering this market, this is a complicated environment to begin negotiating. This is sure not how things are back home.

What this also means is that low cost, speciality cannabis products will continue to be imported across Europe for the German and other developing, regulated sovereign markets here as doctors learn about cannabis from condition treatments. And that is what makes the news about MGC even more interesting.

Look for distribution deals all over Europe as a result, starting with Poland. And, despite the many well-connected and qualified hopefuls from Canada, a little competition in the German market too.

MS is the only “on-label” drug at present for cannabis treatment in Germany. As a result, particularly when it comes to paediatric treatment for drug resistant epilepsy, this is the kind of strategic presence that will create a competitive source for highly condition-branded medication for a very specific audience of patients. It is also what the German market, for one, if not the EU is shaping up to be at least in the near term.

As this interesting abstract from 2006 clearly shows, this kind of epilepsy is also high on the German radar from a public policy and healthcare-cost containment perspective. The costs of treatment per patient were between 2,600 and 4,200 euros for three months a decade ago, and not only have those risen, but so have the absolute number of people in similar kinds of situations.

Further, with indirect costs far higher than direct costs including early retirement and permanent semi disability, MGC’s market move into an adjacent (and cheaper) production market might be just what the German doctors if not policymakers now looking at such issues, will order.

January 30, 2018

Aurora Leads Cannabis Import Race in Italy by Winning (Mostly) Exclusive Rights

By Marguerite Arnold

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Just as the dust had settled on the news that Canadian LP Aurora had signed agreements to finance a major growing facility in Denmark, the company also added another European feather to its cannabis cap.

On January 18, the company announced that it is the sole and exclusive winner of an EU-wide tender bid to begin to supply medical cannabis to the Italian government through the Ministry of Defense. Why is this federal agency in charge instead of the federal ministry of health? So far, the Italian cannabis program has been overseen exclusively by the Italian military.

Pedanios cannabis, produced in Canada and imported through Germany

But the military just isn’t cut out to cultivate cannabis for the entire medical needs of a country, which should seem obvious. And that is where the Canadian LPs apparently are coming into play.

There were two stages to the bid, with Pedanios, Aurora’s German-based arm prequalifying in the first. In the final round, Pedianos won exclusive rights to begin supplying the government with medical cannabis.

What is interesting, however, is what this says not only about the potential growth of the cannabis market in Italy, but beyond that, Germany.

A German-Canadian Sourced Italian Product?

Pedanios, who won the bid, is the German-based arm of Aurora, one of Canada’s largest LPs. And Italian medical cannabis is now about to be routed by them from Canada, via Berlin, to market locally via pharmacies. It is certainly one of the stranger paths to market globally.

This announcement is even more interesting given that Aurora is widely suspected to be one of the top contenders in the still-pending German bid.

Could this herald a German-sourced cannabis crop for an Italian neighbour?

And what does this say about the sheer amount of volume potentially needed for cultivation next door (or even in Italy) as Germany begins its own cultivation program, presumably this year, to source an already undersupplied domestic market where growing numbers of patients are getting their medical cannabis covered under public health insurance?

Will Germany further antagonize its neighbours over a cannabis trade imbalance? Or does this mean that a spurt of domestic Italian cannabis production is also about to start?

There are 80 million Germans and about 60 million Italians. Who will be the cannabis company to supply them?

Nuuvera Also Makes Italian Moves

Less widely reported, however, was the news that Aurora/Pedanios would not be the only private supplier to the Italian market. Nuuvera, which just announced that they had become finalists in the competitive Germany cultivation bid, also just acquired an import license to Italy for medical cannabis by buying Genoa based FL Group.

One thing is clear. The pattern of establishing presence here by the foreign (mostly Canadian) firms has been one of acquisition and financing partnerships for the past 2 years.

Import until you cultivate is also clearly the guiding policy of legalizing EU countries on the canna front.

The question really is at this point, how long can the import over cultivation preference continue? Especially given the expense of imported cannabis. Not to mention the cannabis farms now popping up all over the EU at a time when the Canadian market will have enough volume from recreational sales to keep all the large (and small) LPs at production capacity for years to come.

In the next year, in fact, look for this reality to start changing. No matter who has import licenses now with flower and oil crossing oceans at this point, within the next 18-24 months, look for this pattern to switch.

The distributors will be the same of course. But the brand (and source) of their product will be from European soil.

Foreign Invasions, Domestic Cultivation Rights & More

One of the more interesting professional conferences this year globally will clearly be the ICBC in Berlin, where all of these swirling competitions and companies come together for what is shaping up to be the most influential cannabis business conference in Europe outside of Spannabis (and with a slightly different approach). Nowhere else in the world now are international companies (from bases in Canada, Australia and Israel primarily) competing in such close proximity for so many foreign cannabis markets and cultivation rights to go with them.

With the average cultivation facility in Europe going for about USD $30-40 million a pop in terms of sheer capital requirements plus the additional capital to finance the inevitable delays, such market presence does not come cheap.

It is increasingly clear that the only business here will also be of the highly regulated, controlled medical variety for some time to come.

That said, when the move towards recreational does come, and within the next four years or so, the global players who have opened these markets on the medical side, will be well positioned to provide product for a consumer base that is already being primed at the pump. Even if for now, the only access is via a doctor’s prescription.

January 29, 2018

NACB Releases Packaging and Labeling Standards for Public Review

By Aaron G. Biros

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Last week, the National Association of Cannabis Businesses (NACB) announced the publication of their Packaging and Labeling National Standard, initiating a comment period for public review. The NACB, which launched in June of 2017, is the first-ever self-regulatory organization (SRO) for cannabis businesses in the United States.

According to the press release, the Packaging and Labeling National Standard, the first standard for them to publish, is designed to help protect consumers and show regulators and financial institutions that members of NACB operate ethically and responsibly.

According to Andrew Kline, president of NACB, the standard is based on regulators’ priorities, among other stakeholder inputs. “The NACB believes that self-regulation is the most effective course of action for our members to control their own destiny in the face of regulators’ growing need to intervene,” says Kline. “The creation and adoption of national, voluntary standards that are aligned with regulators’ priorities takes input from government, NACB members, and subject matter experts into careful consideration. Through this process, the SRO identified product packaging and labeling as our first priority because it impacts so many issues related to health and safety.”

Here are some of the major areas the standard addresses, from the press release:

Child-resistant packaging guidelines for all cannabis products
Consistent labeling that identifies the cannabis product’s origin, cultivator and processor
Inclusion of warning statements regarding health risks associated with cannabis consumption, such as advising consumers to not drive or operate heavy machinery while using the product, and that the intoxicating effects of the product may be delayed after consumption
Avoiding packaging and labeling that appeal to minors
Requirements and methods for listing all ingredients present in the product
Inclusion of major food allergen warnings and information on cannabis edibles based upon U.S. Food & Drug Administration guidelines
Guidelines on how to address health and medical claims for cannabis products

The public review and comment period lasts until February 21^st. During that time, every comment submitted will be reviewed and could impact the final language of the standard. Prior to adopting the new standard, they write a final draft after the comment period and bring it to members for a final vote.

Once the final standard is in place, the NACB enforces the standard with their members. If a member doesn’t comply, they can be removed from the organization or penalized.

Towards the end of the press release, they hint at news coming in 2018 for their members. “To help aid members in complying with the requirements of state governments and the NACB’s National Standards, the NACB expects to launch a technology solution exclusively for members in 2018,” reads the press release. “The technology platform is also expected to help members meet the rigorous due diligence required by financial institutions and business partners, by creating an auditable ledger of compliance and financial records.”

January 10, 2018

German Media Reports Dramatic Increase in Cannabis Patients Covered by Insurance

By Marguerite Arnold

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German media is now reporting that in the first 10 months of medical cannabis reform, over 13,000 applications for medical cannabis have been received by the largest three public health insurance companies. Most of the applications were received (and processed) by AOK who received 7,600 applications. Barmer received 3,200 applications. Krankenkassen Techniker (or TK as it is widely referred to here) received approximately 2,200 applications.

The reality is that most patients still rely on the black market.Between 62-64% of those who applied at the big three were also reimbursed. That means that there are already close to 10,000 patients, if not slightly more, covered under some kind of reimbursed cannabis scheme in Germany (where cannabis costs only $10 per month as a co-paid expense). When cannabis is not covered by health insurance, however, patients must pay out of pocket for the drug which can run as much as $3,000 for a single month’s supply.

This information is also being released, fascinatingly, not from the government, insurance companies or even advocacy groups. Instead it comes from a report produced by local media (the Rheinische Post in Dusseldorf). The media outlet surveyed the three top largest health insurance companies on the number of cannabis-as-medicine applications they have received since the cannabis law was reformed last year.

Home cultivation and recreational use, except in a few city trials now underway in places like Bremen, is still outlawed on a federal level. The new law also specifically prohibits patients from growing their own. And since the reform law passed last year, the prevailing story from patients is the difficulties they have had in not only finding a doctor willing to prescribe cannabis, but also getting their health insurers to reimburse them for huge out of pocket expenses that most of the chronically ill can never hope to afford.

The reality is that most patients still rely on the black market. It is still easier to get cannabis this way. And far cheaper – unless of course approved by health insurance.

What Does This Mean For The Bigger Picture?

Despite the fact that many in the mainstream German media are still highly sceptical of the medical efficacy of cannabis, the tide is turning here too, rather dramatically. According to recent polls, about 57% of the country is ready for recreational reform. That means in the last four to five years, the majority of public opinion has also shifted. It is also clear that medical cannabis cannot be as easily dismissed as it once was. Here or anywhere.

What makes this even more interesting is the impact this now moving situation will have on the debate, particularly domestically, but also internationally.

The first is that Germany clearly has a huge number of potential patients. Local advocates put the real number here north of 1 million for conditions the drug is commonly prescribed for in other places. At the present time, the only doctors who are allowed to prescribe the drug must also have a special license to dispense such restricted “narcotics” as cannabis is now classified auf Deutsch. And the only “on-label” condition for cannabis is still Multiple Sclerosis. That means that cancer, AIDS, chronic pain and movement disorder patients, along with those who manage to get approved for PTSD, ADD, depression and other “psychological” disorders only get the drug approved as a measure of “last resort.” In other words, after all other drugs fail. That is a high bar to pass.

The second, as a result, is that these numbers appear artificially low for another reason. The government claimed upon passage of the cannabis reform legislation last year that it expected only 10,000 new patients a year for the first few years (and before domestic cultivation began). As these results already prove, there are clearly far more patients who want the drug than those who can get it. There are also more patients whose doctors are willing to write prescriptions for the drug than are getting reimbursed by public health insurance.Bottom line? No matter how slow it is in getting started, the medical cannabis market has arrived in Germany. The numbers will only grow from here.

Third, this entire debate is now happening at a time when Germany is re-examining its own health insurance policies. While 90% of the country is on much cheaper public healthcare, 10% of the country, mostly the self-employed, foreigners and high earners, have private coverage. This is highly expensive, and ends up trapping even Germans in a system that is unaffordable as they age. In fact, the issue is a big one in Berlin right now as particularly the SPD is pushing Chancellor Merkel and the CDU to finally address a growing problem.

The law last year mandated that public health insurance must cover cannabis if prescribed under the right conditions. That means that private health insurers have to cover it too.

On the cannabis front specifically, what this may indicate, however, is that the public health insurers are being tasked to only approve a certain pre-identified number of patients nationally in the early part of the cannabis program. Especially as all of the medical cannabis in the country is still imported – and most of that is still coming from Canada.

What these numbers clearly show however, beyond all the caveats, is that demand is starting to pick up. Cannabis as medicine has not entirely caught on in the mainstream, although Germans are clearly interested in the idea. Especially given all the noise and news from abroad on this front.

It also means that no matter how “anaemic” these numbers may seem in early 2018, it is a respectable kick-off to what many in the industry view as one of the world’s most lucrative medical cannabis markets. Counting the approximately 1,000 patients who received medical cannabis before the law changed last year, it is safe to say that the market is now up and running.

Bottom line? No matter how slow it is in getting started, the medical cannabis market has arrived in Germany. The numbers will only grow from here.

How Does This Compare To Other Countries?

But how does the German patient ramp up compare to other countries after significant reform has been passed?

In Canada, the cannabis-as-medication discussion is clearly mainstream as the country prepares to launch its recreational program later this summer. The medical program began in 2014. The most recently released figures as of the beginning of January 2018, show that medical cannabis has clearly caught on. Health Canada’s most recent figures show that by September of last year, there were 235,621 registered cannabis patients in the country. Significantly, this is also up dramatically from 174,503 registered patients as of just April 2017. The previous year, the total number of cannabis patients literally tripled in 2016. To put this in “historical perspective,” as of Q1 2015, about a year into the new medical law in Canada, there were “only” 23,930 patients (or about twice the number in Germany as of now). This growth is all the more impressive when one considers that there is no mandate for insurance coverage of the drug in Canada. That said, cannabis is far cheaper in Canada. It is of course covered domestically. Plus the licensed producers can mail order it directly to patients.

Israel’s path to medical cannabis access has been slower off the ground in terms of overall numbers, but it is has still dramatically expanded over the past decade too. In 2012, there were about 10,000 cannabis patients in Israel. That number more than doubled by 2016 to over 23,000 patients. This will continue to increase too. Israel’s medical cannabis is covered under national health insurance and patients must pay about $100 a month for their meds.

What Is The Official German Government Response To This News?

Marlene Mortler, German drug commissioner for the federal government and affiliated with the CSU, has issued comments that seem to be supportive of the continued program in Germany. “The growing number of permits shows how important it was to launch this law last year,” she said, while warning that medical cannabis is not a panacea.

January 4, 2018

Jeff Sessions Rescinds Cole Memo

By Aaron G. Biros

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According to The Associated Press, U.S. Attorney General Jeff Sessions rescinded the Cole Memo today, an Obama-era policy barring Department of Justice officials from going after state-legal cannabis businesses. This move comes just after California, the nation’s most populous state, legalized adult use sales of cannabis. Previously, the Cole Memo has served as a kind of stopgap for states to conduct legal cannabis markets, giving them peace of mind that the federal government wouldn’t interfere.

Sen. Jeff Sessions (R-AL)
Photo: Gage Skidmore, Flickr

Ushering in 2018 with a bang, California’s cannabis businesses finally celebrated their new market launch on New Year’s Day. Even CNN rang in the New Year with copious amounts of cannabis, sending journalist Randi Kaye to Denver where she was passed joints and even donned a gas mask bong.

One fifth of the entire United States population now live in states where adult use cannabis sales are legal. A majority of states in the country have some form of cannabis legalization law on the books.

According to The Associated Press, AG Sessions’ new policy will leave it up to federal prosecutors to determine how they wish to enforce federal law and the controlled substances act. Sessions has been historically conflicted with federal policy surrounding legal cannabis and has repeatedly expressed his disdain for the drug.

But his back and forth on policy directives has been largely symbolic until now. In January last year, Sessions said he would uphold federal law but expressed openness to ending the conflict between state and federal laws. In February of last year, he tied legal cannabis to violence in a press conference where he alluded to greater enforcement. But flip-flopping again in March of last year, he said the Cole Memo is valid and appropriate after a speech.

Sen. Cory Gardner (R-CO)
Image: Gage Skidmore, Flickr

The Trump Administration’s confusing and often-unclear stance on cannabis has only fueled more speculation, worries and fear that cannabis businesses are no longer safe from federal prosecution.

The cannabis industry and politicians around the country were quick to respond to the AG’s new policy shift. Sen. Cory Gardner (R-CO) said he would be holding up DoJ nominees, “until the Attorney General lives up to the commitment he made to me prior to his confirmation.” The Cannabis Control Commission of Massachusetts, the regulatory body tasked with overseeing the state’s legal cannabis industry, says “nothing has changed” and that it will continue their work to legalize and regulate the cannabis industry.

Steve Schain, Esq. practicing at the Hoban law Group

Steve Schain, Esq., an attorney with Hoban Law Group, a prominent cannabis law firm, says this only fuels the confusion. “With Jeff Sessions threatening to singlehandedly crush $7.2 billion legalized marijuana industry spanning 30 states, generating millions in taxes and providing tens of thousands of jobs, much confusion abounds,” says Schain. “While unclear if merely a ‘knee jerk reaction’ to California program’s launch breadth of coverage, unless and until the United States Department of Justice provides an official statement, publication, or other specific information, neither legalized marijuana’s current status – nor the Federal Government lack of Congressional mandate or funds to derail state programs – has changed.”

Omar Figueroa, a well-known California cannabis attorney, urges clients and friends to start getting informed. “Which district is your ‘commercial cannabis activity’ operation(s) located? Who is the US Attorney for that district? What is that US Attorney’s cannabis policy? The answers to these questions just became extremely important. Please contact us for legal advice and representation.”

Advocates and activists were also very quick to condemn Sessions’ move, including Matthew Schweich, interim executive director for the Marijuana Policy Project (MPP). “This extremely misguided action will enable a federal crackdown on states’ rights with regard to marijuana policy,” says Schweich. “Attorney General Sessions has decided to use the power of the federal government to attack the ability of states to decide their own laws. A majority of Americans support legalization, and Sessions has simply decided to ignore their views. In the states where marijuana is legal, voters approved those legalization policies at the ballot box. This is a direct attack on the will of the people.”

National Cannabis Industry Association (NCIA) Executive Director Aaron Smith gave the following statement in a press release:

“This news from the Department of Justice is disturbing, especially in light of the fact that 73% of voters oppose federal interference with state cannabis laws. But, the rescinding of this memo does not necessarily mean that any major change in enforcement policy is on the horizon. This has been, and still will be, a matter of prosecutorial discretion. We therefore hope that Department of Justice officials, including U.S. Attorneys, will continue to uphold President Trump’s campaign promise to not interfere with state cannabis programs, which have been overwhelmingly successful in undercutting the criminal market.

In addition to safely regulating the production and sale of cannabis, state-based cannabis programs have created tens of thousands of jobs and generated more than a billion dollars in state and local tax revenue to date. Any significant change in federal enforcement policy will result in higher unemployment and will take funds away from education and other beneficial programs. Those revenues will instead go back to drug cartels and other criminal actors.”

Could this move be a genuine policy shift that will cause a crackdown on the legal cannabis industry? One action that could prevent the DoJ’s ability to target cannabis businesses relies on a Senate vote passing the Leahy Amendment as part of the Omnibus Appropriations Bill. That amendment would prevent the DoJ from using resources to go after state-legal medical cannabis laws, but does not exactly protect companies operating under adult use and recreational laws.

Is it possible that this is just the Trump Administration moving public eyes away from the bombshell revelations in Michael Wolff’s book and Trump’s feud with Steve Bannon? The current administration has a history of creating headlines amidst unrelated controversy, deflecting a public relations crisis from the public eye.

December 12, 2017

European Cannabis News Roundup 2017 And Predictions For 2018

By Marguerite Arnold

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Europe saw big developments on the cannabis front all year. This includes country-by-country developments that include legalization of medical use and even plans to begin domestic production, no matter how delayed such plans have turned out to be.

By far the most interesting market developments were in Germany all year. The Teutonic state has entered some interesting territory – even if its potential is still in the development rather than rollout status.

Elsewhere, however, medical acceptance is clearly starting to bloom across the continent in a way that is more reminiscent of American state development than what is about to happen in Canada.

One of the most interesting aspects of European reform however, that is in marked difference to what has happened in the U.S., is that grow facilities are being slowly established with federal authorization, even before further reform comes (see Turkey, Slovenia, Germany and even Denmark).

How reform will continue to roll out and shape the discussion however, is still a matter very much left up to individual European states. Cannabis legalization may become the first uniting issue of the new Deutsch ruling parliamentary coalition, whatever that is. In Spain, the cannabis question might yet be a play in simmering separatist tensions. Across the continent, legislatures are, for the first time in two generations, reconsidering what cannabis is, how it should be used, and what the penalties should be for those who use the drug either medicinally or recreationally.

Change is still all over the map. And it is still very, very slow.

Germany

The country’s federal legislators voted unanimously to mandate medical coverage of cannabis under public health insurance (which covers 90% of the population) on January 19^th. Since then, however, forward movement has been stymied by a combination of forces and politics. While the legislation became law in March and the government established a cannabis agency, other developments have not been so clear cut. Yes, import licenses are being issued. And yes, there is a pending tender bid. However announcements of the finalists have been delayed since August due to lawsuits over qualifications of the growers, among other things. The new German government (whatever it will be) plus apparent CETA (EU-Canada Comprehensive Economic and Trade Agreement)-related complications have all added to the drama. That said, when the cannabis opera moves into its next act, as of probably early next year, expect to see domestic medical grow go forward. Importing medical supplies, even from across the continent (which is what is happening now) is ludicrously expensive. Rumours are already flying out of Berlin that further cannabis reform is one of the few things that all parties can agree to as a new government forms.

Holland

Sadly, the biggest cannabis-related “development” this year was the decision by all major health insurers to stop covering the drug, just as the German government changed its mind about the issue. Greater regulation of coffee shop grows coupled with this lack of insurance coverage means that patients are being forced into a coffee shop culture which is also commoditizing and commercializing into a high-volume affair, particularly in Amsterdam. While this might just be the new face of an old business, the laid back “coffee shop” culture of yore is an endangered species.

Barcelona, capital of Catalonia
Photo: Bert Kaufmann

Spain

Catalonian independence made headlines globally this year. So did the associated bid for other freedoms of a cannabis sort – particularly in Barcelona. Club grows were set to become more regulated as of this summer. However the massive Catalonian bid for independence has further muddied the waters. Given the fact that cannabis reform appears to be at the forefront of finding political compromise elsewhere in Germany, perhaps givebacks about taxes for this industry might be one way to temper down the still-raging separatist forces afoot.

Poland

The Polish government surprised everyone this fall, and legalized the drug for medical purposes (at least in theory) in November. What this actually means for patients is another story. There are no plans to cultivate on the radar. Patients under the new law are allowed to travel to other countries to seek their medical cannabis. How they might afford it is another question. Not to mention how they will escape prosecution from personal importation if checked at a border.

Polish pharmacists will however be trained on how to make medicaments from imported cannabis. They will have to be registered with the Office for the Registration of Medical Products. This means that pharmacists must be pre-registered with the government – in a move much like the early days of the Israeli medical program. The medicine is expected to cost about $460 a month. How well this will work in serving the country’s more than 300,000 already eligible patients is another story.

Greece

Cannabis economists have long said that what the Greeks really need to heal their economy is a vibrant cannabis injection. And as of mid-November early investors in the nascent market had already staked close to $2 billion in cultivation opportunities. Senior ministers in the government have also publicly backed plans to move Greece into a strategic position to claim a piece of a global cannabis market estimated to reach 200 billion dollars a year by the end of the next decade. It means jobs. It means capital infusions. Exactly, in other words, what the Greek economy desperately needs. Expect to see further formalization of the grow program here in 2018 for sure.

Lithuania

It appears that quite a few countries in Europe are pushing for real cannabis reform by the end of the year, and this little EU country is joining the list. With a unanimous agreement in Parliament already to change the country’s drug policy, Lithuania’s legislators could vote to legalize the drug on December 12^th of this year. All signs look promising.

Slovenia

MCG, an Australian-based company, made news in the fall by announcing a new cannabinoid extraction facility in the country, on track for completion this year. The company also ramped up domestic production operations in August. Real reform here still has a long way to go. However with domestic production underway, greater medical use looks promising.

Denmark

The country signed a production agreement to open a new facility in Odense, the country’s third largest city with Spektrum Cannabis, the medical brand of one of the largest Canadian producers (Canopy Cannabis) now seeking a foothold in Europe late this fall. What this means for ongoing reform in Denmark is also positive. The company will import cannabis via Spektrum Denmark until all the necessary approvals are ironed out for cultivation.

Portugal

While “reform” here is less of an issue than it is elsewhere (since all drugs are decriminalized), Portugal might yet play an interesting role in cross-European legalization. Tilray, another large Canadian-American firm with interests in Europe, announced the construction of a large medical cannabis facility in the country earlier this year. That plant could easily ship medical supplies across Europe as new countries legalize but do not implement grow facilities.