Tag Archives: trial

February 11, 2020

European Cannabis is the Emerging Market to Attract North American Investment

By Mark Wheeler

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

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

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

Global mainstream leans to European strength

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

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

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

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

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

Where does the UK sit within cannabis?

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

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

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

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

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

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

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

How North America compares to Europe

Canada

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

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

The US

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

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

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

How you can invest within the UK and Europe

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

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

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

Conclusion

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

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

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

December 3, 2019

What’s Going Down In The Danish Cannabis Market?

By Marguerite Arnold

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Despite the fact that the Danes are going to do something that is still verboten in Germany and many other European locales (namely allow a recreational trial), the overall bloom is off the first heady days of the cannabis rose here in Denmark.

Medical sales have stalled of late because of both supply (and in part CannTrust problems) and of course price in a market with a lot of cultivation enthusiasm, but also one which still imports its medical cannabis (although domestic production is coming online soon).

This is even more interesting of course given some ideas floating in the current Euro cannosphere – namely that Canadian funded, Danish based cultivators are or were planning on importing to both Germany and Poland this fall. In other words, low sales at home for expensive product that can be bought for less at the revived Christiana marketplace are not a market entry strategy that brings ballast to balance sheets. And while the rec market is coming (obviously), the trial is in early days yet.

Further, while the German market certainly presents an opportunity for higher priced cannabis coming out of Denmark (for now), that also will not last. And is certainly not the case in Poland.

For that reason, it is clear there is at least temporary trouble brewing in what some initially thought was going to be a European-based cannabis paradise. But that too, is so 2018.

A Few Numbers

The medical trial in Denmark is now entering the beginning of its third year as of 2020. There are, according to official estimates just over 4,000 legal patients. 34 companies have permits to cultivate cannabis, including all the usual suspects – starting with Canopy Growth, Aurora, Aphria, ICC (Wayland) and The Green Organic Dutchman, plus of course all the indie locals.

Put this in perspective and is it really any wonder why Aurora also just recently announced the halting of partly built construction in both Denmark and Canada this month?

Especially with problems in Poland, slower than expected legal sales in Germany and of course the disaster that is still the UK, this newest setback for the company is also not exactly unexpected. The only cannabis company, European or not, who benefitted from the recent NHS pivot on medical cannabinoids was the home-based GW Pharmaceuticals, albeit at lower negotiated prices as the total pool of patients is now increased with the new NICE guidelines.

Given all of these headwinds, even with a few export possibilities, the Danish market that supposedly offered a promised respite from the problems of the German one (certainly on the cultivation front), has run into a similar problem at point of prescription and sales.

Even Danish patient number growth is anaemic compared to Deutschland – which is, by all reports, not even close to considering a recreational trial in Berlin, Bremen or any other jurisdiction which has suggested the same.

With bulk, high-grade production coming online, there is clearly going to be a regulated cannabis market in Denmark. How the decisions about who will qualify for medical will be made in the future is another question. And one that certainly the larger producers at least, are responding to in kind.

The Winds of Change

Given the amount of compliant cannabis now in the pipeline for the continent (and not just domestically) it will be interesting to see how 2020 shapes up. However, no matter how still sluggish the numbers, another domestic cannabis market has begun to come into its own as the continent moves forward on the issue generally.

November 19, 2019

Luxembourg’s Government Triples Medical Cannabis Budget for 2020

By Marguerite Arnold

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While Luxembourg is a tiny country in the middle of Europe, it is beginning to play an outsized role in pushing all aspects of the cannabis discussion forward in the EU.

The country has steadily moved forward on integrating cannabis into the medical system. In 2018, medical cannabis was tested in a pilot project and is now available, on prescription, from a limited number of hospital pharmacies since February of this year. The program, at least from the Department of Health’s perspective, has been “very successful” so far in the words of Health Minister Etienne Schneier.

So, as a result, the next phase of the transition is going into effect. The budget for doctor training and medical cannabis purchases will be increased from €350,000 to €1.37 million next year. The drug will also be available from all pharmacies. Overall, the government has allocated a budget of €228 million for its cannabis “pilot” next year – an increase of €22m in 2019.

Canopy Growth Moves Into A Prime Position

Canopy Growth also announced last month that it has now become the exclusive supplier of medical cannabis to the country in a deal that extends through the end of 2021 (in other words presumably until recreational reform becomes legal). This is an interesting twist of events, given that Aurora announced it was the first company to import the drug into the country last year.

This is certainly a new chapter in the ongoing competition between the two Canadian companies who have, since 2017, essentially split Europe’s “first entries” between them (with the exception of Tilray in Portugal).

It also comes at a time when Aurora has just lost its third license in Italy to cultivate.

The clash of the cannatitans continues.

Why Is Luxembourg’s Cannabis Experiment So Interesting?

The increasingly strategic position of this tiny country on the cannabis discussion cannot be discounted.

In the summer of 2018, it was the government’s decision to change the law on medical cannabis use that preserved the ability of Germans to continue to buy cannabis stocks. Confused? The Deutsche Börse, in Frankfurt, the third largest stock exchange in the world, claimed that it could not “clear” stock purchases last summer because their clearing company, based in Luxembourg, could not close the transactions in a country where even medical cannabis was still off the table. When Luxembourg changed their law, in other words, the Deutsche Börse had to reverse course.

Since then, this tiny country has continued to challenge the cannabis discussion in the EU – also announcing that a full-boat recreational program will be enacted within the next two years (almost certainly by 2021). This aggressive timetable will also move the discussion in almost every EU regulation still on the table, and probably position the country as the only one in Europe where a fully integrated medical and recreational policy is in place. Even Holland does not cover medical cannabis these days. Dutch insurers stopped covering the drug in early 2017 – just as the German government changed its own laws.

Luxembourg, in other words, has now effectively pulled at least on par with Denmark and Germany in the cannabis discussion, with recreational now the agenda. And appears to be willing to preserve its medical program after recreational comes.

Who says size matters?

The “Colorado” Of Europe?

One of the reasons Colorado was such a strategic state in the cannabis discussion in the U.S. was undoubtedly its “purple” status – i.e. a state which politically swung both ways on a range of policy issues.

Luxembourg in fact, as the seat of the European Courts of Justice, may end up playing the same role in Europe – but on a national level.

In fact, the battle here increasingly resembles not Canada, but the U.S., as individual countries begin to tackle the cannabis question in their own way – both within and beyond the EU rubrics on the drug.

Will the United States legalize federally before the EU changes its tune? That is unknowable.

However, for the moment, the market leader in the EU to watch is undoubtedly Luxembourg, no matter its geographical size and population count.

As usual, cannabis reform enters through a crack, and widens from there. Luxembourg appears to be, if not the only crack, then certainly one of them that is turning into a decently sized crevice in the unyielding wall of blanket prohibition.

November 12, 2019

Doctors & Researchers Push Medical Efficacy Forward at 10th IACM

By Marguerite Arnold

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It is easy to forget as one steps inside this world-class medical conference (held this year in Berlin), that cannabis is disputed as medicine anywhere in the world.

Inside a packed conference hall in an upscale hotel in East Berlin, international researchers presented evidence that when taken as a drug, this simple plant can make a world of difference to patients suffering from a range of illnesses.

There were also doctors who talked about prescribing this as medicine (even to children), with dramatic and affirming results (if not heart-warming pictures).

In sum, as always, the IACM is the best place to find facts if not evidence galore to convince even the most hard-boiled egghead that this drug works – and across a broad range of so far “other” drug-resistant medical conditions.

As a participant in the IACM said after the opening remarks on the very first morning, it is so easy to ask the question – “Why are doctors still so afraid of if not resistant to this drug?”

Medical efficacy is no longer an unanswered question…

For those seeking affirmation and evidence, this year’s IACM did not disappoint. There were presentations on the drug’s impact on neurological, oncological and inflammatory conditions that while not all new, are increasingly impactful in an aging planet.

A full house of attendees for the patients panel

But that is not all that was discussed. The broader implications of adding cannabis into skincare, diets and medicine chests were also presented – from cannabis’ impact on lowering obesity and positively affecting acne to impacting the opioid epidemic.

Also intriguing this year was a far-reaching study on how polluted the CBD supply chain is in Europe, even for non-medical and nutraceutical products. Not to mention a socio-political plea for legalization of personal use in South Africa.

And that was just the presentations from the stage and in the poster hall.

The conversations swirling around were just as interesting. Because of course, nobody at this three-day gathering, for all the normalization on display, did forget that this gathering of doctors, scientists, cannabis companies and patients is still an anomaly.

The fact is that there are still too few doctors prescribing. And too few trials. And too many fights over efficacy still in the room.

As Alice O’Leary Randall (wife and former partner in activism with her late husband, Professor Randall who initiated the medical efficacy fight in the U.S. in 1975 over glaucoma) said to Cannabis Industry Journal, “It is hard to believe that we are still fighting the same fights all over again.”

Another “AIDS” Crisis?

There is a more dramatic sense of urgency at the IACM than other conferences that focus just on the “business.” In part, this is because the conference is made up of not only doctors and researchers who fight to prescribe the drug or get trials funded, but also patients on the front lines in a country where the drug is supposed to be covered by health insurance.

Dr. Franjo Grotenhermen (seen on the table) and others during a panel discussion

The patient panel, as a result, was an international face of accusation: To national authorities who still refuse to mandate cannabinoid care – across Europe and beyond. To medical establishments who are not demanding cannabinoid treatment be made mandatory in hospitals and emergency rooms in every country in the EU and beyond. To individual doctors who refuse to come to such conferences, where, if they wanted to, could learn how to begin prescribing the “next penicillin.” To payers and insurers who are still too slow to pick up the message if not the tab.

Indeed, one of the best panels of the conference was a gaggle of doctors, led by Grotenhermen, who discussed the particulars of approaching a new drug – for the very first patient and first time.

Act Up, Speak Out, Silence Equals Death

As the conference wrapped up with its awards dinner, there was of course, a sense of needing to go home with not wanting this to end. For those in the thick of this multi-generational fight, there of course were words of encouragement to colleagues from the industry, internationally. But there was also a new sense of needing to up the pace, if not create faster change.

The battles are far from over – in fact, they are just beginning in many places. As one questioner said of a panel about halfway through the conference – “We need to pick up the fight the same way the AIDS community did on this drug.”

That remark perhaps means less today than it did 20 to 30 years ago when an embattled LGBTQ subculture was the organized point of the spear that fought the early state legalization battles as pioneers for a cause that sought equality as much as it sought a cure.

The plea did not fall on deaf ears.

In the midst of studies, statistics and scientific evidence, in other words, there was a new sense of a need for a renewed fight – and from the medical and scientific community as well as patients.

September 23, 2019

Alcaliber Spinoff Linneo Health Gets Greenhouse GMP Certification In Spain

By Marguerite Arnold

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As the industry faces what is undoubtedly a watershed moment for the international cannabis vertical, a new Spanish firm steps into the market with its own EU GMP certification license. Linneo Health is also helmed by the ever eloquent and highly experienced Jose Antonio de la Puente – a tall drink of water with a conscience, a brain and an admirable mission statement.

As Cannabis Industry Journal broke in our last story, a lack of international standards in Europe have been on trial of late. The same day that the CannTrust scandal began to blow in Canada and as Danish authorities rang global alerts, the only qualified packager in Holland was issued a new EU GMP cert. That is a government decision, not a commercial one.

This also implies, at minimum, government lack of coordination and agreement on EU GMP cert even between European nations, for a nascent industry while also trying to avoid the thorny issue of patient home grow. See also the trials and travails of the erstwhile German cultivation bid and its reconstituted Frankenstein-esque bigger if younger sister. In fact, this contretemps is almost certainly involved if not indirectly to blame.

Not All Is Entirely Rosy On Cannabis Europe’s Eastern Front

Almost simultaneously to Linneo Health’s announcement, however, the news came that in Poland, authorities had suspended the pending product registration process. Will this be on hold until after the October election?

In this environment it is almost impossible to know.

Here is one thing to consider. These almost simultaneous developments in Spain and Poland and the newest announcement about further certification of the Dutch recreational system under a new pending “recreational trial” are almost directly related.

That said, even such political maneuverings are not new – and far from limited to any single company. Both Germany and Poland have been wracked by reform stuttered by short term gain and market entry strategies executed by most of the biggest players in the room. Aurora, for example, announced their first import into Poland the same day the Polish government changed the law last fall. Aurora uses Germany as its breakpoint distribution center for Europe.

A Stamp of Authenticity That Is Sorely Needed

Beyond the pharma and market entry politics, however, this Alcaliber-helmed project creates a ring of authority to the same that creates at least one cannabis brand the European medical community can see the certification for.

For now at least, certainly among the ranks of the upper echelons of the international cannabis industry, there must surely be a sigh of relief.

EU GMP certifications (in other words, the authorization to produce product bound for a medical, pharma market) do not happen overnight. On the European front, this is surely at least a step in the right direction for an industry embattled by scandals, particularly of the securities, production, certification and accounting kind right now.

In this case, however, it is also clear that no matter the egregious oversteps and potentially illegal and certainly dubious behaviour of some members of the industry, there are also clearly those within it, and at high levels, who have tried to do the right thing. And further, from the beginning of the nascent industry here as of 2015.

Who Is Alcaliber?

Alcaliber is one of the world’s largest opioid manufacturers. Unlike American counterparts, the company decided several years ago to invest in and back ideas of the opioid-to-cannabinoid therapy model. Linneo Health is a 60% subsidiary of Alcaliber and 40% owned by a Spanish family office called Torreal, S.A.

This is, as a result, one of the most important GMP licenses in Europe at the moment if not the world. It means that within a pharmaceutical environment, the first widespread research and production of plants and therapies for those suffering from both chronic pain, plus neurological and oncological conditions that cause or are related to the same, will be put on a fast track long in the offing. Certainly in Europe.

And that for one, is a positive development that will have widespread implications elsewhere. Particularly given the news that the opioid epidemic in the United States finally has a name, and culpable parties.

What Else Is Unusual About This Project?

GMP certification is a vastly misunderstood concept at the moment. It is also a highly thorny one because of a still standardizing set of agreements. The regulatory environment is in place, in other words, but there are many, many gaps, as well as shifting rules and underlying treaties.

However, on top of this, there is also an amazing lack of innovation in interpretation, in part because of many misadvised consultants who are actually seeking to “save” production costs for their clients, or because they do not know any better. Or because producers are scared of doing the wrong thing.

The new project in Spain is unusual because it is a greenhouse grow that got EU GMP cert – although look for more of this in the future. It means that with careful, standardized, pharma production, not all regulated cannabis grows, even for the medical market, have to use huge amounts of energy in repurposed post-industrial developments. It is also certainly cleaner than growing outside. And, when done right, saves huge amounts of water.

Cleantech, in other words, has finally hit the cannabis industry in Europe. As well as a pharmaceutical company invested in the cannabinoid treatment of (at least) chronic pain.

That is an overdue and hugely positive development. No matter what else can be said for shenanigans engulfing the rest of the industry at the moment.

September 16, 2019

Unique Issues With Cannabis-Related Patents & Their Enforcement

By Michael Annis, Liam Reilly

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While enforcement of cannabis patents through litigation is common, there are other alternatives to litigation. Here we discuss some of the unique cannabis-related issues that could arise before the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO).

The growth and evolution of the cannabis industry in the U.S. are not slowing. However, the cannabis industry – with its tremendous upside – is still beset with uncertainty and limited legal guidance curbing its full potential. Intellectual property law, including patent protection, has emerged from the murky legal and regulatory landscape as a reliable business strategy with developing certainty.

A pioneering cannabis patent case in Colorado has progressed without any indication that cannabis patents are to be treated differently than other patents. Relatedly, PTAB recently upheld the validity of a cannabis-related patent as part of a post-grant proceeding. However, although the courts and the USPTO are not discriminating against cannabis patents because of their illicit subject matter, the true strength of these newly issued patents could be suspect.

The fledgling nature of cannabis businesses and the fact that cannabis is just now emerging from its statutorily imposed dormancy combine to highlight certain weaknesses of the USPTO and its mechanisms meant to strike spurious patents.

For several reasons, it is possible that applicants are propelling cannabis patent applications of questionable validity through prosecution beyond the point that similar applications could proceed. The USPTO’s experience with cannabis patents is limited. The universe of prior art available to patent examiners is also limited. There are only about three thousand active cannabis patents, which would only account for 0.6 percent of the total issued patents in 2015. The legal status of cannabis has also likely deterred the broadcasting of public use as prior art, and enabling publications or other public disclosures covering cannabis (e.g., published scientific studies) are limited as well. Taken together, patent examiners considering applications for cannabis patents are at a disadvantage compared to other applications that the USPTO considers in other fields.

Additionally, the post-grant proceedings before PTAB established to review issued patents of questionable validity are not designed to handle the historical context and unique issues of cannabis patents. The difference in the procedural rules and requirements of two common inter partes mechanisms for challenging issued patents, post-grant reviews (PGRs) and inter partes reviews (IPRs), creates a gap in coverage that is particularly salient to cannabis patents.

Although the cannabis patent case in Colorado is first of its kind, we can expect more to follow in its wake.Where a PGR petitioner is free to challenge an issued patent on effectively any ground, an IPR petitioner is limited to validity claims for lack of novelty or non-obviousness based solely on patents and printed publications. However, the PGR petitioner must be diligent, because it only has nine months from the issue date of the challenged patent to file a PGR petition. After those nine months, the challenger will have to rely on litigation or an IPR, with its limited basis for invalidity.

What this means for a cannabis patent is that unless a challenger – likely, a competitor in the cannabis space – can timely file a petition for a PGR, the basis for challenging the patent before PTAB are limited to those types of prior art that are especially rare in the cannabis space: patents and printed publications. What is more, meeting the nine-month requirement to file a PGR is no trivial task. The cost and time required to research and prepare a petition for PGR are particularly problematic for the cannabis industry with its lack of access to traditional forms of business financing.

As a result, it is reasonable to question the validity of contemporary cannabis patents. Further, because of PTAB’s enforcement gap, a patent challenger will likely have to resort to litigation to bring its invalidity arguments unrelated to claims of lack of novelty and non-obviousness based on patents and printed publications. Such broader invalidity arguments could include lack of patentable subject matter – which is an appealing challenge for patents that stem from naturally occurring plants or products, such as cannabis – or lack of novelty and non-obviousness based on other prior art.

Although the cannabis patent case in Colorado is first of its kind, we can expect more to follow in its wake. And, because of the weaknesses at the USPTO and PTAB, invalidity arguments in these early cases will likely be of increased strategic importance than in typical patent cases.

August 5, 2019

European Cannabis Summer Roundup

By Marguerite Arnold

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There have been many significant developments this summer in Europe that will shape the debate about reform and the legal cannabis market that trails it, for at least the next year. Here is Cannabis Industry Journal’sroundup of our biggest events and trends over the summer so far.

Medical Sales Across Europe Are Slow

In Germany, it is easy to maintain a fairly ballpark understanding of patient count. Find the number of prescriptions issued in the trade press and divide by four. Everywhere else, however, the true realization of what is going on across Europe is slowly starting to hit everyone outside producers wanting to know what is going on.Establishing territorial footprint has been what the race in Europe has been all about since mid 2016 for the Canadian LPs so far.

This is going to start to hit stock prices soon beyond the wobbles already evident in the market thanks to this summer’s breaking industry scandals (CannTrust, lawsuits in every direction) to lack of financial performance for investors (Bruce Linton’s firing from Canopy). It is becoming increasingly obvious to everyone that just because a public Canadian company issues a press release about a (cultivation, import, export or processing) “event” does not mean anything other than a slew of social media telling everyone about it. The frustration with “forward looking” statements has hit European investors big time, from the retail to the institutional kind.

Despite a lot of press releases in other words, which clearly show market penetration, there is not much else going on from the sales perspective when it comes to growing those first numbers. Establishing territorial footprint has been what the race in Europe has been all about since mid 2016 for the Canadian LPs so far.

However, from an industry, if not investor and of course, patient perspective, patient numbers are what really count. And unlike Canada, where patients remain the biggest existential threat to the industry, the same industry may not sign them up or ship to them directly in Europe. For several reasons.

Germany is still the only country in Europe with a significant patient count, and while growing, slowly, is still a group where 2/3 of patients obtain dronabinol. It should shock nobody that the most accurate patient count right now in the UK is hovering somewhere under 20. For the whole country, 9 months after the law changed. While the peculiarities of Brexit are also in the room, this is so far, compared to U.S. state markets, Canada, Israel and Germany before it, pathetic.

The Industry Says It Supports Patients…But Does It?

There are several levels to this debate which start with the still appallingly high level of price gouging in the room. 2019 and certainly this summer is a time when the Canadian companies are clearly learning that European governments negotiate for drugs in bulk. Even (and especially in the near future) this one. See the difference between the EU and the US.

The level of industry promotion vs patient access recently reached a new nadir this summer when it emerged that despite a great deal of interest, more people showed up (by far) to the week-long cannabis industry conference (European Cannabis Week in London in June) than there are legitimate patients in the UK right now.

That is about to change, but so far, industry support for trials has not materialized. When the various trials now being planned do get going, look for new battles over a couple of issues, starting with patient access to and control of their medical data.

Novel Food: The Regulation That Keeps On Giving

The issues involved in this discussion are complex, certainly by North American standards. This of course starts with the fact that there is no such regulation on the continent. But also rapidly bleeds into puncturing the amount of hot air entrepreneurialism there is in the room.

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

The CBD market in Europe that everyone got so excited about in investor releases, in other words, is basically dead for the time being. Yes, there are a few smart niche players weaving around the regs, but it is a full-time job.

Here is the reality: Since Christmas last year when Austria put the kabosh on all products containing the cannabinoid CBD, several major countries have weighed in on the issue. It is not going away. And it is here to stay, even after recreational.

Political Advocacy Is Stirring In Europe

Whether it is the vagaries of Brexit, the discussion across the continent about how the EU will work together, right wing populist screeds about “too much regulation” or national elections, cannabis is in the room from now until the end of at least 2021 as one of the hottest global political issues under the sun. That includes of course, a discussion about global climate change, sourcing, pricing and resource use so far unaddressed but rapidly looming.

german flag — Photo: Ian McWilliams, Flickr

Further, patients are still having a voice – whether it is making sure that their children obtain imported CBD, or that they can obtain their own THC prescriptions without going bankrupt or having to solicit in the black market.

Cultivation Bids Looming?

One of the surest signs yet that the German authorities at any rate, are in no mood to solve the cultivation issues still on the ground and the bid itself, is that the government just renegotiated, for the second time since last fall, the amount of medical cannabis to come over the Dutch-German border. Who is going to go next? With the Italian hybrid now done and dusted, Poland is likely to be next. And when that happens, expect a raft of similar initiatives across Europe. But probably not until then.

And in the meantime? Distributors are looking for product. The demand is clearly there. But across Europe this summer there is a clear sense that the hype machine that has been the industry’s mouthpiece is at minimum overenthusiastic about the bottom-line details behind it all.

July 30, 2019

UK Non-Profit Launches Project TWENTY21 To Register 20K Cannabis Patients

By Marguerite Arnold

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In late June, as more than a thousand people descended on the South Bank Center to attend the largest cannabis conference held so far in the UK, another development was taking place away from the headlines.

Drug Science, a non-profit research group founded to reform drug policies based on scientific evidence rather than politics or even economic considerations, launched an ambitious trial project in the UK.

The goal? To get medical cannabis to 20,000 British patients suffering from a range of conditions that the drug is well known to help treat.

Who Is Drug Science?

Founded by Professor David Nutt, the former chief drug advisor to the British government who was fired in 2009 for stating that ecstasy and LSD were less harmful than alcohol, the group itself is clearly not afraid to tackle controversy. The Project TWENTY21 initiative is an ambitious if not desperately needed undertaking.

Targeted patient groups include those suffering from chronic pain, PTSD, MS, Tourette’s and addiction.

Several cannabis companies have already signed up to support the effort which also includes the United Patients Alliance ,and academic researchers.

According to Abby Hughes, Head of Outreach for UPA, “Whilst a change in UK law has given clinicians the green light to prescribe medical cannabis, the majority of patients are denied access, some even being criminalised, whilst corporations are profiting from the same plant.”

Hughes also noted that the goal of the project is to begin to ground patient demand in research and hard data. “We hope that by having a dataset that proves the efficacy of medical cannabis, thousands of patients will be able to access legal, affordable medicine, which may improve their quality of life,” she said.

What Is The Scope of Project TWENTY21?

It is the first-of-its-kind project in the UK where, 9 months after the law changed to allow prescription of cannabinoids as well as the medical importation of the same, there are less than 20 (legal) patients in the country. And all of the successful candidates so far have fought for the right and still do.

While important in its own right, the concept if not forward motion on the same, is also poised to create similar trials all over Europe. This is especially true in countries (like France) where the issue of reform has not moved at all. Or even in Germany (with well over 50,000 patients two and a half years after similar reform was passed by the Bundestag) where problems with access and questions about medical efficacy still frustrate the close to a million Germans who cannot access the drug. Switzerland and Luxembourg may yet prove to be similiarly interesting.

Why Is This Timely?

There has been an increased call for the need for widespread and sustained population trials across Europe as the cannabis industry has really begun to establish itself since mid-2016. This is the only way to help forward medical understanding of cannabinoids at a level that leads to mainstream acceptance. And more importantly, medical and payer mainstream approvals. Until that happens, despite all the press releases, overall sales across the continent remain low.

One of the most important issues beyond this – the extraordinarily high pricing seen in Europe until late last year – has also played a role of course. Payers (see the German “statutory” health insurers) on the front lines of uncertain medical efficacy are still reluctant to pay for a drug, in any form, they do not understand, do not have evidence for, and are still highly suspicious of.

There has been an increased call for the need for widespread and sustained population trials across Europe With cannabis companies agreeing to provide product (in this case potentially from Australia), a research organization with national chops and brave leaders is likely to take the conversation far. And not just in the UK.

While Drug Science is of course not the only British entity planning canna trials and in part supported by the Canadian industry (see The Beckley Foundation for starters), Project 2021 is also certainly likely to be a study with both local as well as regional and global implications.

In Europe, there are other regional trials now in the offing (see Switzerland, Germany and France). Only Germany of course, has a patient population that is starting to be large enough to be effectively studied, and of course, the majority of these patients are still receiving dronabinol.

It is also clearly a steady state march, rather than a discussion that is likely to see significant boosts in patient numbers any time soon. Unless of course, there are other contributing factors.

Regardless, unlike the U.S. and even Canada, the strict medical focus of Europe (including the UK) is finally moving the conversation to the next level. Large, regional and/or national medical trials – and further for conditions the drug is well-known to treat but are so far considered “off-label” for most Europeans will be the watchword here for the next several years.

May 28, 2019

Clinical Trials Commence for CBD Pet Products

By Aaron G. Biros

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Products using hemp-derived cannabidiol (CBD) designed for pets is not a new concept; Companies have been marketing CBD pet products for quite some time now, making their way into pet stores across the United States. Some pet owners have embraced the trend, using CBD oil to calm pets down, help alleviate joint pain as well as inflammation, while others are understandingly skeptical when it comes to using novel remedies for their furry friends.

Researchers at the University of Pennsylvania’s School of Veterinary Medicine hope to find some answers to those questions, particularly regarding the efficacy of using CBD remedies for dogs. According to a press release, a team of researchers at University of Pennsylvania’s Veterinary Clinical Investigations Center will perform the first major double-blind clinical trial to study the effectiveness of CBD in treating joint immobility in dogs. The trial will be led by principal investigator Dr. Kimberly Agnello.

According to the press release, this is the largest trial for cannabinoid therapy in pets so far. The trial will include use of the CBD-infused pet product, Therabis’ “Mobility.” Therabis is a subsidiary of Dixie Brands, Inc., a large cannabis infused products company in markets across the United States. Here are some of the details on the clinical trial, shared through the press release:

Dogs known to be suffering from inflammation secondary to osteoarthritis will be studied to determine whether those who receive the Therabis supplement achieve better outcomes than untreated dogs. One group of dogs will receive the formula for a proprietary veterinarian-specific formula Therabis product; a second group will receive Cannabidiol alone which previous studies have shown may have benefit in osteoarthritic dogs; a control group will receive a placebo. Study designers are targeting inclusion of up to 20 dogs in each group. The design of this study will provide valuable data defining the synergistic potential of the additional ingredients in the Therabis formula.

According to Dr. Stephen M. Katz, co-founder of Therabis, they think the data from the trials will show a positive outcome for dogs using their products. “We are honored to have a Therabis product selected by the world-renowned experts at Penn Vet for their first major study of the effects of natural hemp oil to reduce joint pain in dogs,” Says Katz. “Our experience in my clinic has shown that cannabidiol (CBD) is an effective treatment in reducing inflammatory response. We have a passion for improving dogs’ quality of life, and we look forward to learning all we can about therapeutic methods to achieve this.”

The results from this clinical trial, to be published in an academic journal upon conclusion of the study, should be of great interest to the hemp industry. Brightfield Group estimates that the CBD-infused pet products market is a $199 million industry, expected to grow up to $1.16 billion by 2020.

March 6, 2019

European Moves Signal Green Spring For Cannabis

By Marguerite Arnold

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It is hard to believe that two years have passed since the German government changed the law to mandate insurance coverage of cannabis by public health insurers. It is not so much the passing of time, but what has and what has not happened here on the ground during this stretch.

This is borne out by a quick overview of regional developments just in the last few weeks on the ground across the European Union.

Germany

The country that is still given credit for kicking off the whole medical cannabis enchilada discussion on a formal, federal level in Europe, still has not issued its first domestic cannabis cultivation tender. It will be two years this April since the initiative was first announced. Since then, several lawsuits have derailed the process, BfArM, the federal agency in charge of the tender, has admitted to a “technical fault,” and, presumably after the next round in court, the agency might be able to get on with business. The next date of note is April 10 (when the lawsuit will be heard in Dusseldorf).

Hopefully, this also means that the domestic cultivation of cannabis will finally begin (according to the agency) by, at latest, the fourth quarter of 2020. In the meantime, look for the awarding of bid finalists (or in the worst case, one more bid issuance after April) this year.

In the meantime, and even according to BfArM’s press statements, the import industry will fill in the gaps- meaning that by the time cultivation actually gets under way for real here, it will already be swamped, in terms of volume, by imports.

Where those imports will come from is another discussion. Right now, the only two countries with import rights for cannabis into Deutschland are Holland and Canada. Expect that to change this year, with Israel, Portugal, Spain and potentially even Greece all being very likely contenders.

Switzerland

Significantly, this tiny, non-EU but Schengen state is considering a pilot to study recreational cannabis. Namely, 5,000 recreational users could soon be recruited to help the government set the rules for a fully recreational market, presumably sometime in the near future.

Switzerland has led the discussion in the region on several fronts- notably setting the pace on CBD sales and continuing to air debates about how profitable the fully recreational industry will be for the public purse.

Bern, the capital of Switzerland
Photo: martin_vmorris

It is all very intriguing, particularly to neighbouring DACH state, Germany, but don’t expect the Swiss to do anything too outrageous on the legalization front- namely step too far out in front of either the UN or the European Parliament. Or anger their other DACH trade partner, Austria, who has taken the extreme polar opposite approach to all things CBD.

So to the extent that the Swiss have very much led the charge on the CBD front, such policies have not and will certainly not be copied across Europe (and has not been so far) any time soon. See the controversies over “novel foods” popping up not only in Austria, but Spain too.

Regardless, like Luxembourg, the Swiss are eyeing this new industry and proceeding cautiously in line with larger, international regulations that so far have led the pack on tweaking, testing and presumably changing in the next couple of years.

There are at least 200,000 people who currently use the fully leaded THC version of the drug illegally. Those who would qualify for the pilot study (only one of several proposed as the country considers the impact of cannabinoids from all angles) would have to be adults who already use the drug.

Stay tuned. This will certainly be one interesting trial.

Belgium

Belgium has also just announced the formation of its own “Cannabis Agency.” The new agency will, just as in Germany, oversee the development of the industry domestically- namely issuing licenses for production and import and overseeing quality.

Does this mean a Belgian cultivation bid is on the horizon? Could be. Although so far, no country except Greece has engaged in any large-scale cultivation effort commissioned by the government. And no country except Germany has so far issued a public tender. Even Italy proceeded with a unique hybrid last year when the military essentially turned over the domestic production it controlled over to Aurora.

This too is also likely to be an interesting space over the next few years.

A Belgian tender, right along with a Polish one (also expected after BfArM successfully executes at least one) may well be in the offing this year. This may also put additional heat on the German agency to bite the bullet and issue cultivation licenses by the end of 2019 no matter what happens in Dusseldorf in April.