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Medical Cannabis & The Vernacular Of Maturity

By RJ Starr
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Marijuana. Mary Jane. Pot. Reefer. Ganja. Weed. Joint. Grass.

The variety of terms used to describe cannabis are as diverse as the potentials of the plant itself – as well as the opinions of its proper nomenclature. A quick web search came up with a number of articles about how we should refer to cannabis, and opinions can be just as annoying and stinging as mosquitoes in the Everglades at the peak of season. Each of these words has an origin with which, having all the facts, you might not choose to align yourself. Words matter, and whether born from racism, xenophobia, or just plain ignorance, one will never go wrong following one simple piece of advice: “Never use a word or a phrase unless you know its meaning.” That said, it is not my intention here to add another opinion, but rather to present the topic from a different vantage. I’ll leave it up to you to decide whether or not it is worth your while to learn what you are saying, and in so doing, empower yourself to consider your audience as you consider your slang, just as you would with any other word.

The legalized cannabis industry has opened a plethora of professional opportunities. Thoughtfully considered, these opportunities can lead to new heights of professional accomplishment and financial earning capability. For those with the good fortune to have such opportunity in legalized cannabis, congratulations! You are a member of a very small group of pioneers who have the potential to shape an entire industry (remember that what Henry Ford did by creating the assembly line brought benefit, not just to the automotive industry, but to all industry.)

In this industry we are not just creating medical cannabis dispensaries, cultivation and processing facilities, we are creating new ideas and platforms for compliance, security, financial planning, quality assurance, botany, agriculture, sustainability, packaging, retail, inventory control, human capital – the list is as endless as the imagination – with the potential to influence capacity in every aspect of all types of industry, around the world. In the course of your career as a cannabis professional you will have a chance to interact with legal and healthcare professionals, legislators, regulators and investors. You may attend high profile events, hobnob with those who inspire social change and exchange dialog with thought leaders from all walks of life. As you represent your particular cannabis company, you will recognize that you also represent yourself, and in that very recognition will your thoughtfully chosen vernacular reveal your personal level of professionalism, eloquence and dignity; and irrespective of what, or from whom, any opinion originates, these core values are irreplaceable. Simply put, adults speak like adults.

A colleague reflected that we are not winning a long and drawn out struggle to divest ourselves from outdated prohibitions against the use of medical cannabis because of the words we are using, but because of education. While I agree with that assessment, the use of slang in professional discourse has a tendency to discredit the speaker and narrow the audience receptive to his message. As the scientific community and cannabis industry continues to re-educate society, our efforts will be bolstered by reaching as broad an audience as possible. Education presented professionally, eloquently, and with maturity engenders respect, goodwill and understanding. And that makes for fertile ground upon which to plant new ideas.

The Hiring Dilemma Facing The Cannabis Industry

By Gilbert J. Carrara, Jr., MD
2 Comments

The business of cannabis is starting to mature and the industry as a whole is gearing up for rapid expansion. This means that pharmaceutical companies, dispensaries and other cannabis-focused businesses are starting to expand their executive teams. However, finding qualified candidates is proving to be an incredibly challenging task, due to the shallow talent pool of leaders with cannabis-related experience, the volatility of the industry and its lingering public perception problems. Companies must therefore dip into other, related talent pools. Here are some factors to consider when beginning the hiring process:

Desired Experience

The ideal candidate to fill an executive role in the medical cannabis industry needs to possess a unique skill set and extensive experience. One obvious source of candidates are peopleIt is important to be resilient in the face of intense criticism and have a thick skin. Diplomatic strength is required. who have hands-on leadership credentials in the pharmaceutical industry, given the highly regulated nature of both the business and consumer sectors. Other good talent sources are the tobacco industry and consumer healthcare services (such as hospitals and other kinds of medical centers).

Due to the evolving nature of the cannabis industry and the intense scrutiny it is under, executives will need to be well acquainted with how to manage compliance with governmental regulations and keep up-to-date on upcoming rule changes and potential legislation. This is especially true for dispensaries, as they are often arriving right after a state vote occurs, leaving no room for error when it comes to knowing and adapting to a state’s unique rules and regulations.

It is also important for a candidate to possess both business and consumer experience, not only on the medical and regulatory side of the business, but also the sales process. A large part of what medical executives do is indirect marketing through their interactions with people — both business affiliates and consumers. Having an executive with poor communication skills could prove to be costly down the line. 

Recommended Personality Characteristics

Due to the controversial nature of the business, a potential executive needs to possess a number of characteristics or personality traits. As with other industry sectors that face similar public approbation, including the tobacco industry, it is not a job for the thin-skinned or easily discouraged. Important traits to look for include:

Flexibility: Due to the evolving nature of the industry and its rapid growth, you cannot possibly control everything and everyone. Remaining flexible is the only way to remain sane and successful during this phase of industry expansion.This ability to easily communicate with diverse audiences is a strong indicator of success.

Resiliency: The cannabis industry is often vilified, and as a result so are the businesses and employees who work in it. It is important to be resilient in the face of intense criticism and have a thick skin. Diplomatic strength is required.

Adaptability: A candidate should be comfortable and credible talking about scientific and business issues one minute, and consumer issues the next. This ability to easily communicate with diverse audiences is a strong indicator of success.

Passion: If a candidate possesses passion for the cause and the medical and therapeutic value of cannabis, there is a much greater chance that they will weather the storm. Having someone who genuinely cares will show in every facet of the way they conduct business — from discussing quality of life to discussing the scientific background to relating to patients.

Hiring at an executive level is never easy and in the case of the cannabis industry, it is infinitely more challenging than most. It is imperative to never “settle” on a candidate simply because time is an issue. Having someone on your recruiting staff, or using a professional recruiter who has deep experience in the medical, pharmaceutical or consumer healthcare industries is also helpful, as they can “speak the language” of recruits and thoroughly answer their questions. Their credibility can help a candidate determine if the cannabis industry is right for them. Finding a quality candidate who understands the industry, the regulations and has a passion for their work will serve your business well as the cannabis industry matures.

BioTrackTHC To The Rescue: Contingency Plan for Washington

By Aaron G. Biros
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According to a press release published this morning, BioTrackTHC successfully implemented their Universal Cannabis System (UCS) in Washington State, a temporary solution for the state’s seed-to-sale cannabis tracking system, while the new system is yet to be deployed.

BioTrackTHC had a contract with Washington State for four years, which expired just weeks ago at the beginning of November. Back in June, after a few minor hiccups, the state announced that MJ Freeway would be the successive software platform used for the state’s seed-to-sale traceability system.

The deadline for the new software to be ready for deployment was set for November 1st, when the BioTrackTHC contract would expire and the MJ Freeway contract would begin. Between when the contract was awarded and the deadline for implementation, MJ Freeway made headlines for a series of security hacks and systems failures. Subsequently, MJ Freeway said they could not deliver the software platform until January of 2018, leaving a two-month gap where businesses have no state-mandated software to use for the tracking system.

The contingency plan that the state laid out consisted of business owners manually inputting data in excel spreadsheets. When first pressed for a Band-Aid solution, representatives of BioTrackTHC cited security concerns related to MJ Freeway’s hacks as reason for being hesitant to extend their contract through the interim period.

In an open letter to the Washington cannabis industry back in October before the end of their contract, Patrick Vo, president and chief executive officer of BioTrackTHC, laid out an explanation for what went wrong and provided an alternative solution, essentially a private sector version of their government-mandated traceability software system.

The open letter to the Washington cannabis industry, written by Patrick Vo

Announced this morning, the new system, UCS, is being used by over 1,600 of the 1,700 cannabis licensees in Washington. The UCS has so far submitted 39,000 individual excel spreadsheets to the Washington State Liquor and Cannabis Board (WSLCB). “After the WSLCB announced that their replacement system would not be ready in time and that the only other option was for all 1,700 licensees to submit their seed-to-sale data via manual spreadsheets, BioTrackTHC created the UCS—a privatized clone of the government system—within a few days and deployed it minutes after the termination of the old system to minimize the impact on all licensees,” reads the press release.

The UCS allows business owners to streamline data recording, instead of manually entering information into spreadsheets. It is also integrating with 3rd party software competitors such as WeedTraQR, GrowFlow, Mr. Kraken, TraceWeed, GreenBits, S2Solutions and DopePlow. “After the WSLCB’s announcement, we knew that we had only a few days to provide a universal system to which the whole industry could submit compliance data and enable communication across the supply chain between licensees and their seed-to-sale system,” says Vo. “Our priority was to ensure that licensees could continue to operate in the absence of a government seed-to-sale system. Not having that system in place could have left Washington licensees vulnerable to noncompliance in a variety of ways, not to mention the potentially crippling volume of extra work needed to manually track a business’ entire inventory.”

Washington State’s new traceability software system by MJ Freeway is expected to deploy in January of 2018.

Hoban Law Group Expands Internationally

By Aaron G. Biros
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Last week, Hoban Law Group announced a major international expansion, with new offices in Latin America and the European Union. The Denver-based law firm said they will have four new offices across the EU by late fall and two new offices in Latin America by spring of 2018.

BobHobanAttorney
Bob Hoban, managing partner

Bob Hoban, managing partner and co-founder of Hoban Law Group, says they have already been working internationally for years. “HLG steps in to global markets quickly as our direct work with government officials on policy and regulation has kept us in this important global curve,” says Hoban. “We have accepted the challenge of being global cannabis industry leaders & experts and will work with strategic industry-leading partners, such as New Frontier Data, to move the industry forward across six countries.”

The press release says the law firm has been advising governments around the world on cannabis policy for several years, as well as working on a handful of international business transactions in the past. These new offices will work mainly with structured finance, mergers and acquisitions, worldwide trade, regulatory law and equity placement in the cannabis (including industrial hemp) industry. “Combining the firm’s corporate practice, with our intellectual property and tax practice groups will position our firm’s client’s to succeed at the highest levels in this international marketplace,” says Hoban.

The press release also announced they have added Andrew Telsey, an experienced securities attorney, to their firm. He has helped take more cannabis businesses public in the U.S. than any other attorney.

Hoban Law Group, founded in 2009, is the nation’s largest cannabis business law firm. They have attorneys in every state that has legalized cannabis in the United States.

KIND Financial Launches Canadian Payment Solution

By Aaron G. Biros
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KIND Financial, a technology and compliance software solutions provider in the cannabis industry, is launching a new e-commerce and payment processing platform in Canada. According to the press release, they are partnering with a Canadian bank to launch the KIND Seed to Payment platform, which is essentially an e-commerce gateway integrated with their compliance software, KIND’s RegTech platform.

David Dinenberg, founder and CEO of KIND Financial

David Dinenberg, founder and CEO of KIND Financial, says this is an approach to help alleviate the cannabis industry’s banking woes. “We’ve been very focused on a global vision and taking a strategic approach towards solving the cannabis industry’s largest problem – banking,” says Dinenberg. “Not only have we built a broad portfolio of finance and compliance solutions with a high-level of technical sophistication, but we’ve made a strong commitment to security and compliance, which is evident through our partnership with Microsoft.” A little over a year ago, they entered a partnership with Microsoft to utilize their cloud-based solutions for government traceability software.

According to the press release, the software has regulatory and security features built in, such as age and identity verification, which can help companies comply with security and chain of custody regulations. “Our mission is to ensure business and technological growth for all constituencies within the cannabis industry while ensuring full compliance with evolving regulations, and that’s why we’re thrilled to make these services available to our great neighbors in the north,” says Dinenberg. “We understand compliance will be a critical issue for some time to come, but with our solution, all providers and their partners can focus on the job at hand while keeping in line with regulatory mandates.”

KIND Financial has not done much work in Canada previously, but this could be a sign of a greater push for international expansion. “We’re excited to be working in a new country to boost the Canadian cannabis industry in a safe and regulated manner, and we look forward to expanding into other markets overseas,” says Dinenberg. The press release says the new platform is designed to work with different languages and foreign currencies, including the euro and Australian dollar, which could help Canadian producers enter emerging markets.

In addition to their announcement of the KIND Seed to Payment platform, the company also announced they will be rolling out a mobile payment system called KIND Pay, a digital payment option for consumers that will accept Visa and MasterCard. They anticipate that KIND Pay will launch before the end of this year.

What Is Going On With Germany’s Cannabis Bid?

By Marguerite Arnold
3 Comments

Germany is proceeding down the path to officially grow its own medical cannabis crops. Medical use became legal this year, along with a federal mandate for cheap access. That means that public health insurance companies, which cover 90% of Germans, are now firmly on the hook if not front line of the cannabis efficacy issue. As such, Germany’s medical market is potentially one of the most lucrative cannabis markets in the world, with a total dollar amount to at least challenge, if not rival, even California’s recreational market. Some say Canada’s too.

However, before “home grow” enthusiasts get too excited, this legislative move was an attempt to stymie everything but commercial, albeit medical production. Not to mention shut off the recreational discussion for at least another four years.

How successful that foray into legalization will be – especially given the chronic shortages now facing patients – are an open question. Not to mention other infrastructural issues – like doctor unfamiliarity with or resistance to prescribing cannabinoids. Or the public insurers’ so-far reluctance to cover it even though now federally mandated to do so.

Regardless, Germany decided to legalize medical use in 2017 and further to begin a sanctioned domestic cultivation for this market. The decision in the Bundestag to legalize the drug was unanimous. And the idea to follow UN regulations to establish this vertical is cautiously conservative but defendable. Very predictably German in other words.

Since then, however, the path has been far from smooth. Much less efficient.

Trouble in Germany’s Medical Cannabis Paradise

In April the government released its tender bid. And no matter how exciting it was to be in the middle of an industry who finally saw a crack of light, there were also clouds to this silver lining that promised early and frequent thunderstorms on the horizon.

By the time the tender bid application was due in June, it was already clear who the top firms were likely to beIn fact, by the end of the ICBC conference, which held its first annual gathering in Berlin at the same time the bid tender was announced, the controversy was already bubbling. The requirements of the bid, for a laughably small amount of cannabis (2,000 kg), mandated experience producing high qualities of medical marijuana in a federally legitimate market. By definition that excluded all German hopefuls, and set up Canada and Holland as the only countries who could provide such experience, capital and backlog of crop as the growing gets started.

The grumbling from Germans started then.

However, so did an amazingly public race to gain access to the German market directly – by acquisition or capital expenditures that are not refundable easily (like real estate or even buyouts). The common theme? They were large amounts of money being spent, and made by major Canadian Licensed Producers who had the right qualifications to meet the standards of the bid. In fact, by the time the tender bid application was due in June, it was already clear who the top firms were likely to be. They were the only ones who qualified under the judging qualifications.

And while nobody would commit publicly, news of the final decision was expected by August. Several Canadian LPs even issued press releases stating that they were finalists in the bid. But still no news was forthcoming about the official list.

Delay, Delay and More Delay

A month later, as of September, and there was still no official pronouncement. Nor was anybody talking. BfArM, the regulatory agency that is supervising this rollout as well as the regulation of all narcotic drugs (sort of like a German version of the FDA) has been issuing non-statement statements since the late summer. Aurora, however, one of the top contenders for cultivation here, was quietly issued an ex-im license by both Canadian and German authorities. Publicly, this has been described as an effort to help stem the now chronic cannabis shortage facing patients who attempt to go through legitimate, prescribed channels. On the German side, intriguingly, this appears to be a provisional license. Privately, some wondered if this was the beginning of a backdoor approval process for the top scoring bid applicants for cultivation. Although why that might be remains unclear.

Whispered rumours by industry sources that wish to remain anonymous, have suggested that the entire bid is still hanging in jeopardy. Late in the month, rumours began to fly that there were now lawsuits against the bid process. Nobody had much detail. Not to mention specifics. But CannabisIndustryJournal can now confirm in fact that there have been two lawsuits (so far).

The summary of the complaints? It appears that two parties, filing with the “Bundeskartellamt” (or regulatory office focusing on monopolies and unfair business practices) did not think the bid process or scoring system was fair. And both parties also lost.

But as of mid-October, there is still no public decision on the bids. What gives?

Whispered rumours by industry sources that wish to remain anonymous, have suggested that the entire bid is still hanging in jeopardy. Even though the plaintiffs failed, some have suggested that the German government might force a complete redo. Others hint that it will likely be slightly revised to be more inclusive but the regulatory standards must remain. If a redo is in the cards, will the German government decide to increase the total amount of yearly cannabis to be delivered? At this point, it is only calling for 2,000 kg per year by 2019. And that, as everyone knows, is far too little for a market that is exploding no matter the many other obstacles, like insurance companies refusing to compensate patients.

What Is Behind The Continued Delays?

There are several theories circulating the higher levels of the cannabis industry internationally right now even if no one is willing to be quoted. The first is that the total number of successful applicants, including the recent litigants, will be slightly expanded, but stay more or less the same. There is a high standard here for the import of medical cannabis that the Germans intend on duplicating domestically.

The Comprehensive Economic Trade Agreement (CETA – the often controversial free trade alliance between Europe and Canada) is still in the final stages of approval.The second is that the German government will take its time on announcing the final winners and just open the doors to more imported product. This will not be popular with German insurers, who are on the hook to pay the difference. However with Tilray now on track to open a processing facility in Portugal and Canopy now aligned with Alcaliber in Spain, cross-continent import might be one option the government is also weighing as a stop-gap provision. Tilray, who publicly denied in the German press that they were participating in the cultivation license during the summer, just issued a press release in October announcing a national distribution deal to pharmacies with a German partner – for cannabis oil.

But then there is another possibility behind the delay. The government might also be waiting for another issue to resolve – one that has nothing to do with cannabis specifically, but in fact is now right in the middle of the discussion.

The Comprehensive Economic Trade Agreement (CETA – the often controversial free trade alliance between Europe and Canada) is still in the final stages of approval. In fact, on September 19, a prominent German politician, Sigmar Gabriel of the Social Democrats (SPD) made a major statement about his party’s willingness to support Germany’s backing of the deal. It might be in fact, that the German government, which is supportive of CETA, got spooked about the cannabis lawsuits as test trials against not cannabis legalization, but a threat to the treaty itself.

Quality control, namely pesticides when it comes to plant matter, and the right of companies to sue governments are two of the most controversial aspects of this trade deal. And both appear to have risen, like old bong smoke, right at the final leg of closing the cannabis cultivation bid.

Will cannabis be seen as a flagship test for the seaworthiness of CETA? On a very interesting level, that answer may be yes. And will CETA in turn create a different discussion about regulatory compliance in an industry that has been, from the beginning of this year, decidedly Canadian-Deutsch? That is also on the table. And of great concern to those who follow the regulatory issues inherent in all. Not to mention, of course, the industry itself.

Conclusions?

Right now, there are none to be had.

However at present, the German bid process is several months behind schedule as Canadian producers themselves face a new wrinkle at home – the regulation of the recreational crop in the provinces.

It is also clear that there are a lot of questions and not a whole lot of answers. Not to mention a timeline when the smoke will clear.

EVIO Logo

EVIO Labs Expands To Florida

By Aaron G. Biros
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EVIO Logo

Currently, there are no lab testing regulations for Florida’s medical cannabis market. Chris Martinez, co-founder and chief operating officer of EVIO Labs Florida, a veteran-owned business, is looking to change that.

Chris Martinez, co-founder and president of EVIO Labs Florida

When Martinez co-founded EVIO Labs Florida, he saw the need for a dedicated cannabis lab to ensure safety and quality of medicine for patients in the state. Partnering with EVIO Labs to accomplish this goal, Martinez secured a 5,500 sq. ft. facility in Broward County to test for potency, pesticides, microbial contaminants, terpenes, residual solvents and heavy metals. Their lab, a first of its kind in the industry, qualifies as a true pharmaceutical-grade clean room. This week, Martinez also secured their 2nd laboratory location in the City of Gainsville, where they will test for potency, microbials, terpenes and residual solvents. And he isn’t doing it on the cheap. “Our Broward lab is powered by Shimadzu with over $1.2M in the latest testing equipment utilizing LCMS technology with the world’s fastest polarity switching time of 5 m/sec and scan speeds of 30,000 u/sec with UF Qarray sensitivity 90 times that of previously available technologies,” says Martinez.

Martinez, an entrepreneur at heart, started the lab with a team of experts to become the first completely cannabis-focused laboratory in Florida. Jorge Segredo, their head chemist and quality assurance director, has over 18 years of experience in the development of nutraceutical and pharmaceutical products under ISO and FDA accreditation. Segredo has helped launch three independent FDA-accredited laboratories and has extensive knowledge of HPLC, GCMS, LCMS, ICPMS technologies and development/validation of testing methods and procedures. Cynthia Brewer, their director of operations, was an active participant in the 2017 state legislative session and has been an advocate for medical cannabis, working with legislators on a suitable framework to increase patient access to cannabis.

The EVIO team is using instruments from Shimadzu

EVIO is one of the nation’s leaders in cannabis testing, research science and advisory services. It is an evolving network of laboratories with nine EVIO cannabis laboratories operating in five different states: Oregon, Colorado, Massachusetts, Florida and California. “After speaking with industry chemists around the country for months, the EVIO name was constantly brought up in conversation,” says Martinez. “When we spoke with the EVIO Team it was an easy decision for us to partner.” He says Lori Glauser, chief operating officer of EVIO, and William Waldrop, chief executive officer of EVIO, are truly visionaries in the cannabis industry.

According to Martinez, their licensing agreement with EVIO Labs (OTC:SGBYD) marked a first for the publicly traded company with exclusivity in the Florida market. The agreement includes proprietary testing methodologies, operating procedures, training and support.

In addition to testing cannabis for safety and quality, they are launching a technology platform called MJ Buddy, essentially a software tool that takes efficacy feedback from patients and uses testing and genetic data they gather from EVIO Labs across the country. “This will provide real data to the cannabis industry as to the medical benefits for thousands of patients in relation to the genotype and cannabinoid profiles of their medicine,” says Martinez.

Of the states that have legalized some form of cannabis, a large number of them have some lab testing regulations on the book, with some more comprehensive than others. Martinez says he hopes the Florida Department of Health, Office of Medical Marijuana Use follows some of the more thorough state programs, such as Oregon. His team has compiled a set of documents for regulators with recommendations for regulating the lab testing industry.

Without any regulations on paper, it is up to businesses to produce safe and quality medicine, without any oversight. EVIO Labs Florida follows FDA Good Laboratory Practices, has an ISO 17025:2005 accreditation pending, and is working on TNI 2016 accreditation.

When discussing what he wants to see happen with Florida’s regulatory framework, Martinez says the rules need to be specific to Florida. For example, due to the climate being so humid, microbial contaminant testing for things like yeast and mold will be particularly imperative. Because processing methods like butane and alcohol extraction are legal, he emphasizes the need for comprehensive residual solvents testing. “The most important regulation would be to have the laboratories select the samples at the MMTC facility and have the state randomly verify laboratory results to ensure accurate unbiased testing,” says Martinez.

In addition to that, he hopes their pesticide thresholds will be realistic and based on actual science. “We believe the public should receive carcinogenic data for products that are inhaled,” says Martinez. “Chemicals may be introduced into the processing of cannabis to vape liquid that may cause harm. This is important information for public health and communication of the risk related to exposure to such materials.” Martinez says EVIO Labs Florida was founded on the belief that through technology and science we can increase safety and patient outcomes.

Canopy Growth and Spektrum Cannabis Form Alliance With Spanish Alcaliber

By Marguerite Arnold
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Canopy Growth (based in Ontario, Canada) and its subsidiary, Spektrum Cannabis GmbH (in St. Leon-Rot, Germany) have been making waves all year.

As of early September, Canopy and Spektrum also announced their next strategic European move. They have just entered into a supply license agreement with Alcaliber, S.A., a leading Spanish pharmaceutical company. Alcaliber specializes in research, as well as the development, breeding and preparation of plant-based and other raw materials into narcotic medicine. More significantly, it is already a leading company in the global pharmaceutical and narcotic space.

According to Bruce Linton, chairman and chief executive officer of Canopy Growth, the partnership opens a lot of doors. “This agreement gives us additional resources to aggressively enter the European market where federally permitted by law, while we continue to work to establish our own complimentary production footprint for cannabis cultivation, value-add oil extraction and Softgel production in the European Union,” says Linton.

Bruce Linton, CEO of Canopy Growth
Photo: Youtube, TSX

Alcaliber is one of the largest producers of morphine in the world (27% of global production) and supplies 18% of its codeine. Cannabis is also considered a narcotic drug in Europe. This kind of track record is exactly what governments are looking for as they figure out how to integrate cannabinoids as medical products into existing pharmaceutical production and distribution. They are equally excited about the possibilities this partnership brings, according to Jose Antonio de la Puente, chief executive officer of Alcaliber. “There is a clear demand for pharmaceutical cannabis produced in accordance with pharmaceutical standards and the expertise we have developed manufacturing narcotic derivatives for over 40 years,” says de la Puente.

The agreement is also the first of its kind between a Canadian cannabis company and a separate, established, international pharmaceutical company. The fact that Alcaliber is located in Spain (albeit Madrid and not Barcelona) makes this new alliance even more interesting, and for several reasons. Not just in Europe or even Canada for that matter.

In the EU? GW Pharmaceuticals, the only other existing pharmaceutical manufacturer and grower of cannabis in Europe, and based in the UK, just got major European if not global competition.

And then of course, there is what is going on Down Under. Australian and Tasmanian companies moving into the game now (with pharma connections, background in opioids and a global footprint) as the medical market in Australia begins to take shape, are about to go head to head with the Canadian-Spanish-German alliance now forming on the other side of the world.

Cross-Continental Plays Are Now Forming

Just as in the U.S., Europe is turning out to be literally a state-by-state chess game of legalization, regulation and supply. Unlike the U.S., however, European countries are bound by both European law and in some cases, sub-regional agreements – like what exists in the so-called Schengen States.

However, even here, the new world is graduating into federal and regional law. And how that will play out in Europe, where the focus is still largely on medical use, is going to be interesting.

What does this mean for Canada’s largest LP? A strong, multi-country presence in the medical cannabis space that, strategically, is par to none other. There are other Canadian LPs who are planning production facilities in other EU countries of course. And some Canadian companies who appear to see Europe as one giant export market. Germany is just one of them. However, the German-Spanish connection is interesting for several reasons: The two most interesting markets globally right now from both a strictly medical perspective with a clear pathway to much broader acceptance as it transitions into some kind of recreational reform, are Spain and Germany. While the former has not signed up for full-boat medical acceptance, the recent independent assertion by the Catalonian government that they would formalize the cannabis club system is seen here as one more step towards the inevitable. So are ongoing and significant Spanish medical cannabis trials.

This move also gives Canopy and Spektrum something else: access to much cheaper Spanish labour and production. This means that no matter where they grow their crops in Europe, or process them, the company now has a two-country supply system for a multi-country medical market that is just waking up. And that is highly valuable right now.

Why?

It gives Canopy direct market entry into several European states, with federally approved, medical grade cannabis and medical products. Those who are coming to the rest of Europe from a Spanish base only, will not at this juncture meet strict medical growing requirements for the German market for starters. On the Spanish side of things, this also means that cannabis clubs might be pressured to stop growing their own (at least outside of Catalonia) and rely on more corporate entities to actually grow and process the plant.

What Does This Mean For Euro Industry Development?

Canopy, strategically, has been at the forefront of interesting strategic plays in the global industry for at least the last 18 months to 2 years. They have eschewed the American market (unlike other Canadian competitors) in lieu of other game elsewhere. However their current expansion strategy, geolocationally, has clearly also been at least 12 to 18 months ahead of just about everyone else.

The cross-country chessboard game is also something that other Auslander (foreign or international) companies are clearly trying to play, particularly in Europe. This is true of both actual cannabis production and distribution entities as much as tech. The hop-scotching of both Leafly and Weedmaps across the continent in search of a business strategy that makes sense is just another face of this. Advertising rules in Europe, including online, and especially for cannabis, are a lot different from say, California state law.

However what Canopy appears to be doing is establishing both a brand and production presence in a way that guarantees not only European entry, but potentially dominance in the medical market as the market here continues to expand and open up.

What they are also doing with this announcement is telling the German government, for one, that they can supply patients in the EU with EU-sourced product, even if not grown or produced in Germany itself. This alone will help keep prices down as German cannabis production gets underway over the next several years.

It will also help Canopy deal with what is expected to be at least supply pressure as of next year as the Canadian recreational market gets underway. There is a very good chance that Spanish grown cannabis might end up not only in the rest of Europe but will also be shipped back to Canada if the supply problems there are severe enough.

Whatever the end result, this is an interesting alliance, and coming at an interesting time for not only the German cannabis industry, but a regional market as well. And further, it is also clearly a play with not only hemispheric implications but global ones.

What’s Happening on Capitol Hill? Part 3: The Medical Bills

By Brian Blumenfeld, J.D., M.A.
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This article continues the bill-by-bill review begun in the August 1st article on cannabis reform legislation proposed in the 115th Congress. In the next article and final piece in this series, we will examine the banking and tax reform bills related to cannabis.

Medical Cannabis Reform Bills 

S. 1008 – Therapeutic Hemp Medical Act of 2017

HR. 2273 – Charlotte’s Web Medical Access Act of 2017

Policy: These bills would amend the CSA to end federal prohibition over all CBD products and all hemp plants with THC content levels of below 0.3%. In other words, people and businesses would be free to grow hemp and/or manufacture CBD products without any fear of federal prosecution. These products would most likely then fall under the regulation of other federal and/or state agencies, but the bills do not specify what agencies they might be or what controls might be put in place.

Impact: The impacts from these bills nationwide have the potential to be massive. Hemp is a plant that can be put to highly effective use in many different industries, from textiles and construction to foodstuffs and seafaring. The efficiency of its growth and the breadth of its utility will make it a highly valuable commodity and a competitor with many other raw materials. For state-legal cannabis businesses, the legalization of CBD and hemp at the federal level could fundamentally change the market for those products. States that legalized cannabis already have provisions in place dealing with hemp and CBD—sometimes alongside their cannabis laws, sometimes handled by a separate state agency—and they could either leave those as they are or open up those markets to interstate activity. In states that have not legalized, CBD and hemp are typically included in the state’s definition of cannabis, and therefore they will remain illegal under state law unless further action is taken. Most likely, if federal prohibition ends on hemp and CBD, state prohibition will follow suit. Because legalization at the federal level will allow for interstate commerce in hemp and CBD, expect the emergence of a nationwide market, driven by online sales and interstate marketing, and developing independently from a cannabis industry still constrained to in-state activities.

Procedural Status:

Senator Cory Gardner (R-CO) Photo: Gage Skidmore, Flickr

S. 1008

  • Introduced: May 2, 2017 by Senator Cory Gardner (R-CO)
  • Cosponsors: 7 Republican, 4 Democrat
  • Referred to Senate Committee on:
    • Judiciary

 HR. 2273

  • Introduced: May 1, 2017 by Representative Scott Perry (R-PA)
  • Cosponsors: 10 Republicans, 10 Democrats
  • Referred to House Committee on:
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
    • Energy and Commerce
      • Subcommittee on Health
    • Financial Services

S. 1276 – Cannabidiol Research Expansion Act

Policy: This bill would accomplish two objectives: First, it would open channels for researchers to access and experiment with cannabis and cannabis extracts. Second, it would initiate the process at the end of which the Attorney General must make a determination as to which Schedule of the CSA is most appropriate for cannabidiol (CBD).

Impact: The impact on this legislation to state-legal cannabis businesses is rather remote—in both time and practice. The research access provisions will certainly create an uptick in medical and psychological research activity, the outcomes of which will add to our knowledge of how consuming cannabis in different forms and amounts effects the brain and body. This type of government-regulated research takes many years to process and complete, as both bureaucratic and scientific standards must be met. As for initiating the re/de-scheduling review process for CBD, this is a direct response to the 2016 denial by the DEA to re/de-schedule cannabis. That determination, published in the Federal Registrar on August 12, 2016, was made following a comprehensive study of the medical benefits and harms of cannabis conducted by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA). Although such an in-depth study and its resulting negative determination pronounced so recently would normally rule out the chances of success for another re/de-scheduling attempt so soon after, the DEA did leave the door open with its statement that it “did not focus its evaluation on particular strains of marijuana or components or derivatives of marijuana.” It is just this door that S. 1276 seeks to exploit. By focusing the re/de-scheduling process on CBD specifically, the presumption is that the outcome of the scientific CBD studies would have a far better chance at satisfying the re/de-scheduling criteria set forth in the CSA. If such a determination was made, then the impact would come in two potential varieties. One, CBD would be rescheduled and become available for medical use according to FDA rules applicable to other prescription drugs. Two, CBD would be descheduled and would fall under the prerogative of the states, in which case the above analysis for S. 1008 and HR. 2273 would pertain.

Senator Dianne Feinstein (D-CA)
Photo: Daniel Torok

Procedural Status:

S. 1276

  • Introduced: May 25, 2017 by Senator Dianne Feinstein (D-CA)
  • Cosponsors: 3 Republican, 2 Democrat
  • Referred to Senate Committee on:
    • Judiciary

S. 1374 – Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017

HR. 2920 – Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017

HR. 715 – Compassionate Access Act of 2017

HR. 714 – Legitimate Use of Medical Marijuana Act (LUMMA) of 2017

Policy: All four of these bills would make an exception to the CSA for state medical cannabis laws. Federal prohibition, in other words, would end for medical cannabis in those states that have legalized, and it would be left to those states to devise how it would be regulated. In states that have not legalized, both state and federal prohibition would remain. The companion CARERS Acts in the House and Senate, along with HR. 714, would also amend FDA rules to widen access to cannabis for research purposes.

Impact: The impact of these bills on the rules for state-legal medical cannabis businesses would be relatively minor in terms of functionality. This is so because they leave not only the determination to legalize up to the states, but they leave the design of the regulatory system up to the states as well. In other areas, however, big changes will be seen that benefit the industry: banking will open up for state medical businesses, and so will the opportunity to write-off ordinary business expenses. Investment risks over legality will end, making for easier access to capital. Questions about contract enforcement and risks of federal prosecution will become moot, and when state regulatory bodies make decisions on how to govern the industry, they will no longer have to concern themselves with U.S. DOJ enforcement and/or prosecutorial policies. Enactment of any of these bills would be a big win for medical cannabis.

Senator Cory Booker (D-NJ) Photo: David Shinbone, Flickr

Procedural Status:

S. 1374

  • Introduced: June 15, 2017 by Senator Cory Booker (D-NJ)
  • Cosponsors: None
  • Referred to Senate Committee on:
    • Judiciary

HR. 2920

  • Introduced: June 15, 2017 by Representative Steve Cohen (D-TN)
  • Cosponsors: 1 Republicans
  • Referred to House Committee on:
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
    • Energy and Commerce
      • Subcommittee on Health
    • Veterans’ Affairs
      • Subcommittee on Health

HR. 715

  • Introduced: January 27, 2017 by Representative Morgan H. Griffith (R-VA)
  • Cosponsors: 2 Republicans, 1 Democrat
  • Referred to House Committee on:
    • Energy and Commerce
      • Subcommittee on Health
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations

HR. 714

  • Introduced: January 27, 2017 by Representative Morgan H. Griffith
  • Cosponsors: 1 Democrat
  • Referred to House Committee on:
    • Energy and Commerce
      • Subcommittee on Health

HR. 2020 – To Provide for the Rescheduling of Marijuana into Schedule III of the CSA

Policy: As its wordy title indicates, this bill would bypass the schedule review process and by legislative fiat move cannabis from Schedule I to Schedule III of the CSA.

Representative Matt Gaetz (R-FL)

Impact: Businesses handling drugs in Schedule III must register with the DEA and comply with DEA record keeping and security requirements. Doctors would be permitted to prescribe cannabis products. Importing/exporting will become available by permit, which would bring state businesses into competition with foreign cannabis firms. The biggest impact will be that cannabis sold pursuant to federal law will have to undergo the FDA’s New Drug Application process conducted by the Center for Drug Evaluation and Research, the largest of the FDA’s five centers. This includes clinical testing and a comprehensive chemical/pharmacological review. The drug would then be subject to FDA regulation for marketing and labelling. For states that wanted to maintain their legal medical cannabis systems, a conflict would remain because cannabis cultivators and dispensaries could operate in compliance with state law while simultaneously failing to meet new FDA and DEA requirements. States will then have a choice: bring state laws into line with federal laws, creating all of the advantages of federal legality discussed above, yet causing major disruptions to the industry; or retain the status quo, allowing the industry to grow as is with all of the in-state advantages but without the advantages of federal legalization. This all would of course leave behind recreational cannabis which would remain in the legal gray zone.

  • Introduced: April 4, 2017 by Representative Matt Gaetz (R-FL)
  • Cosponsors:
  • Referred to House Committee on:
    • Energy and Commerce
      • Subcommittee on Health
    • Judiciary

HR. 331 – States’ Medical Marijuana Property Right Protection Act

Policy: Section 881(a)(7) of the CSA subjects to federal forfeiture all property involved with cannabis activities. This bill would make an exception to that provision for all property in compliance with state medical cannabis laws.

Impact: Although not legalizing medical cannabis, this bill would be a strong step in the direction of legitimizing state-legal medical cannabis businesses. As a result of the property forfeiture clause of the CSA, two impediments faced by the medical cannabis industry is that investors are hesitant to invest and land lords are hesitant to lease or otherwise engage the medical cannabis market. By eliminating the risk of such property loss due to the federal-state conflict, this bill would have the very welcomed impact of easing access to capital and expanding opportunities for land use.

  • Introduced: January31, 2017 by Representative Barbara Lee (D-CA)
  • Cosponsors:
  • Referred to the House Committee on:
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
    • Energy and Commerce
      • Subcommittee on Health

CWCBExpo Removes Roger Stone From Keynote

By Aaron G. Biros
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Last week, the Cannabis World Congress & Business Expositions announced they have removed Roger Stone from their conference’s keynote talk. The news follows a month-long boycott led by a group of women with the #DisownStone campaign, exhibitors, activists and the Minority Cannabis Business Association (MCBA), among other organizations.

According to the press release, conference organizers met with a number of people and organizations to discuss inclusivity and made the decision to oust Stone, citing the distraction his keynote was causing. “Following collaborative discussions with numerous partners, participants, and interested parties who support the legalization of cannabis in an inclusive manner, Cannabis World Congress & Business Expositions, (CWCBExpo) is announcing that Roger Stone will no longer be featured as a keynote speaker at the upcoming CWCBExpo events in Los Angeles and Boston,” reads the press release. “The forums created by CWCBExpo are crucial to the growth and legalization of the cannabis industry and they supersede the distractions that have surrounded the events.”

When the Minority Cannabis Business Association announced they would boycott the conference unless Stone was removed, support poured in from throughout the cannabis industry and a Change.org petition was created. Shortly after, we published an op-ed in support of the MCBA and their boycott. The boycott received national attention from major news outlets across the country. New Frontier Data, prominent cannabis law firm Greenspoon Marder, Denver Relief Consulting, Cannabis Industry Journal and Dope Media are among the signatories on that petition.

The petition reached 750 signatures in just two weeks and now has 840 signatures. That petition launched the #DisownStone campaign, which was ultimately successful in their mission. According to a statement put out by the #DisownStone campaign, the movement was led Amanda Reiman, Betty Aldworth, Bonita Money, Lauren Padgett, Leah Heise, Tiffany Bowden and Wanda James. It quickly garnered support from organizations involved in the conference. 20 speakers and 11 sponsors and partners signed the petition.

The Facebook post from MCBA where they announced the boycott

The #DisownStone statement praises the CWCBExpo for their decision to remove Stone. “We applaud the leadership at the Cannabis World Congress and Business Expo for their decision to remove Roger Stone from the keynote slot at CWCBExpo in Los Angeles and Boston,” reads the statement. “In choosing to release Roger Stone and to remove the employee that displayed egregious and reprehensible behavior towards members of the industry, the CWCBExpo set an example for the industry to follow. We understand that this decision was a difficult one and respect that the conference chose this route.”

The campaign ended their statement with a forward-looking sentiment, vowing to fight racism in the cannabis industry. “We will continue to denounce racism whenever we see it in the cannabis industry and elsewhere, and look forward to the day when no person can be arrested and jailed for using cannabis,” reads their statement. “We are excited to attend CWCBExpo and continue the conversation in person with their leadership and with attendees.” The campaign is hosting a #DisownStone after party at the LA event to celebrate their victory on September 14th.

Stone told LA Weekly that he plans on suing the conference organizers for $1 million. “The expo is in breach of contract,” Stone told LA Weekly. “I will be suing them for $1 million. I will not be deterred from my efforts to persuade the president to preserve access to legal medicinal marijuana consistent with his pledge to the American people.”

In an email to LA Weekly, Jesce Horton, chair of the board at MCBA, told reporters he is now willing to work with the conference organizers, given their decision to remove Stone. “Roger Stone’s deplorable rhetoric was just a piece of our inability to be involved,” Horton told LA Weekly. “More important is his history of advocating for regulations that work directly against an industry inclusive to small businesses and minority entrepreneurs. I look forward to working with CWCBE and support their decision to stand with us.”