In the past couple of weeks, there’s been a sharp uptick in trends towards wider community use of marijuana.
Some US States have made it easier for doctors to prescribe certain marijuana drugs and for the public to access CBD, THC and CBN products, Canada has legalised cannabis and a marijuana grower has become the first of its kind to list on the New York Stock Exchange.
Investors have been quick to back the trend.
The new NYSE stock is Canopy Growth (NYSE: CGC), a Canadian company with a market capitalisation of around US$10 billion, making it worth more than Bombardier, the Canadian manufacturer that is one of the world’s largest makers of planes and trains.
I don’t want to dampen this trend but having just come back from the US following meetings with Food and Drug Administration, I know where the regulator places its priority.
They (like Medlab) want to see research and clinical trials around cannabis-based medicines so they have a genuine interest in our trial at the Royal North Shore Hospital.
Another aspect of the trend worth a closer look is how closely connected it is to cannabis-based companies making money from it.
It’s not as simple as it might seem.
Take California for example. While recreational use is allowed, lawful marijuana attracts a 15% excise tax and about another 10.5% state tax, although marijuana for medicinal use has a lower tax bracket.
Lawful supply has to come from within the state and be bought from city licenced dispensaries which are limited to certain geographical areas, meaning consumers have to drive to a dispensary for a purchase.
Despite the legislation, cannabis is not available at every street corner, it’s not in supermarkets or gas stations, and dispensaries are not usually in suburban areas.
A key feature is that cannabis, whether for recreational or medicinal usage, must come from within the state and can’t be imported across state lines because that would be “trafficking” and so prosecutable by the US Drug Enforcement Agency (DEA).
And these same “trafficking” rules apply to all states.
The Californian economy may be huge – 39 million people over 163,700 square miles – but there are only some 400 licenced dispensaries.
Even the new Canadian legislation heavily restricts advertising and is laden with bureaucratic rules, including licensing and inspection requirements for producers.
So, when enthusiasts extrapolate from the trends and see wider marijuana use, applications in drinks and foods and consequently soaring profits for growers and product developers, there’s still a gap between potential and reality.
Even The New York Times sees the marijuana fervour as being reminiscent of the dotcom boom of the 1990s – the top 12 Canadian marijuana companies are worth US$42 billion with investors snapping up stock and yet for these companies “profits are a dream of the future”.
Some historical context is also relevant here.
Some researchers have traced marijuana use back 12,000 years, making it one of the world’s oldest cultivated crops, originating in the steppes of central Asia in countries that are now Mongolia and Siberia.
It was used for medical and spiritual purposes and there are records of use in China in 4000 BC, evidence of export to Korea in 2000 BC and used by the Vikings and early Germans to ease pain in childbirth and from toothache.
The first cannabis seeds were grown in Canada in 1606 and yet it has taken over 400 years to achieve legalisation.
So, what’s different today to prehistoric use of cannabis is that while the benefits have long been known, health authorities want to see evidence to demonstrate boundaries around safety, efficacy and dosage.
The recent rescheduling by the DEA relates to “some cannabidiol” medicine “as long as the medications have been approved by the U.S. Food and Drug Administration”.
This has involved moving the medicines from the restricted schedule 1 category to a lesser schedule 5 while noting that a schedule 5 drug is still illegal without a prescription.
Another aspect of these trends is that they can tend to present cannabis as a single commodity while Medlab’s research work is based around isolating the two most active ingredients – CBD and THC – to use them in varying combinations for medicines to be trialled.
This is the great potential drug development can reveal, and that regulators are watching with interest.
As I finalise this post, I note on 27 September 2018, Assembly Bill 2914, Chapter 827 California legislated for preventing CBD, CBN and/or THC to be infused into an alcoholic beverage.
So, times are changing, laws are being written and I feel some of these “trends” may be nothing more than “puff and smoke”