New product testing requirements that came into effect October 1 are squeezing Oregon’s cannabis growers and business owners harder than regulators may have expected and is likely to lead to a major decline in the state’s cannabis tax revenue.
“October was a defining, if not catastrophic, month for Oregon’s cannabis industry, which, until then, was growing at a very fast rate,” Portland economist Beau Whitney said in a Nov. 30 news release issued jointly by the Oregon Cannabis Business Council and Whitney Economics. “OHA’s new testing rules, which very few existing operations can presently comply with, virtually crippled the supply chain of adult-use and medical cannabis, from grower to retailer.”
On Nov. 30, Whitney Economics released polling data that shows how Oregon’s cannabis market has deteriorated in recent weeks. Of the 683 cannabis companies that Whitney surveyed, 22 percent said they are going out of business under the new requirements and a large majority are planning employee layoffs.
Unfortunately for Oregon’s cannabis entrepreneurs, a lack of licensed testing facilities has led to both increased wait times, as well as price hikes, for testing procedures that are now mandated by the state, and many companies can’t afford to have their products tested. Furthermore, the survey shows that many of the new testing requirements are so strict that a significant portion of previously-approved products are now failing for containing small traces of prohibited chemicals and/or pesticides.
Resultingly, activity on the unregulated cannabis market has seen a dramatic uptick — as high as $187.5 million on an annualized basis — since the new testing requirements took effect on Oct. 1. This shift in consumer activity is likely a result of both growers turning to the illicit market to offload their now-inadmissible products, and consumers returning to their former black market hookups as dispensary shelves become sparser and product variety deteriorates. In either case, Oregon’s cannabis tax revenue is certain to take a hit, with conservative estimates putting the initial loss at a minimum of $10 million, with potential losses reaching as high as $20 million.
The survey was conducted by Whitney Economics from Nov. 14 to Nov. 30.
Canopy Growth Corp. has agreed to purchase Canadian licensed medical cannabis producer Mettrum Health Corp., in a deal worth more than $320 million, RTTNewsreports. Both companies are traded on the Toronto Stock Exchange and the transaction will be satisfied by the issuance of Canopy Growth common shares.
Under the terms, Mettrum shareholders will be entitled to 0.7132 Canopy Growth shares per common share of Mettrum. The deal must be approved by a court and both companies’ shareholders, after which Mettrum would become a wholly-owned Canopy Growth subsidiary.
The deal would give Canopy Growth six licensed medical cannabis facilities, upping its production footprint to about 665,000 square feet, with expansion possibilities. The company, once combined, would have 39,730 patients, representing nearly half of Canada’s medical cannabis patient base, according to a Financial Postreport.
“From day one, Canopy Growth has viewed production capacity, brand diversity, and highly-skilled management as the foundational aspects of our business,” Bruce Linton, Chairman and CEO of Canopy Growth, said in the Post report. “Their substantial production facilities will add to our growing production platform as we expand to meet the needs of patients, and their experienced personnel will help Canopy Growth drive our vision forward to the next level.”
Earlier this week, Canopy Growth announced an agreement to acquire Germany-based pharmaceutical distributor MedCann.
Aurora Cannabis has broken ground on a cannabis cultivation facility that, once completed, will be 800,000 square feet — as large as 16 football fields, according to a Calgary Sunreport. The facility, known as Aurora Sky, will be capable of producing 100,000 kilograms of cannabis annually.
Steve Dobler, Aurora president, said the design of the greenhouse took one year and that he expects the construction will be completed by October 2017. The company boasts that, once complete, the Leduc County, Edmonton facility will be the largest and most advanced cannabis cultivation site in the world.
“Our objectives are very clear: to build the largest production capacity, with the highest production quality and the lowest production cost,” he said in a press release.
Presently, Aurora operates a 55,000-square-foot facility in Mountain View County, Alberta, which could see its own expansion.
“Our rate of growth, with rapidly increasing demand for Aurora’s high quality cannabis products, clearly justifies our expansion in both Mountain View County and Leduc County,” CEO Terry Booth said.
The new facility will employ a Dutch-designed hybrid greenhouse system, which will allow the company’s cultivation experts to have “precision control over all critical environmental variables,” the company said in the release. The pre-engineered part of the structure has been underway in the Netherlands since October.
Trading for the first cannabis-related company to gain approval from the New York Stock Exchange has been delayed, according to a Forbesreport. Innovative Industrial Properties, a real estate investment trust, planned to raise $175 million through an initial public offering but dropped that goal to $100 million. They also cut their number of shares, priced at $20 per share, from 8.75 million to 4 million.
The company plans on buying facilities for cannabis cultivation and collecting the rent. A $30 million deal to buy PharmaCann’s 127,000 square-foot New York facility and rent it back to them is expected to close within months.
The company planned to begin trading last week under the symbol IIPR, but made two updates to the filing before the delay. The first announced that management might forfeit their zero-cost basis shares, and the second confirmed that they would do just that. Initially, the 5-person management team would have gotten 15 percent of the trust without using their own money.
That zero-cost plan could be one reason the IPO has, so far, failed to gain traction among investors; another possibility could be because the company does not yet own any properties. However, it could also be due to the election of Donald Trump and the naming of Republican Sen. Jeff Session as the potential Attorney General.
A two-acre patch in Desert Hot Springs, California will soon be host to a 22,000 square-foot greenhouse capable of producing 6,000 pounds of cannabis per year, according to an Independentreport. In 2014, the town became the first in Southern California to legalize large-scale cannabis cultivation.
Jason Elsasser, owner of CV Pharms, hopes the facility, which will include SoCal’s first stand-alone extraction facility, will help turn the city into a “Mecca for cannabis.” The former property manager, who also serves as president of the Cultivation Alliance Network, got into the industry in 2008 after the economy crashed, leaving him close to bankruptcy.
“I had a contract with Bank of America to pick up foreclosures, and there was a guy growing pot at one of the places I went to foreclose,” he said in the report. “I ended up giving the guy extra time because he needed time to harvest his crop, and he told me I ought to start using my properties to grow marijuana.”
Elasser also envisions the town, known for its mineral spas, could become a hot-spot for cannabis tourism and he anticipates it will become home to ‘bud and breakfasts’ and ‘soak and toke’ businesses.
Desert Hot Springs Mayor Scott Matas said there are about 50 cannabis cultivation projects in various stages of development. Companies and growers pay an annual tax of $24 per square foot of cultivation space for the first 3,000 square feet and $10 per square foot after that. At least 20 percent of the businesses workforce must be local.
Vacant roadside lots in Desert Hot Springs such as Elasser’s used to run about $60,000, now some are going for ten times that amount, he said.
The business relationship between the cannabis and alcohol industries remains strained and detached. In states permitting adult use, the sectors’ overlap is only provided by the state boards that regulate both; however, nowhere are the two legally bought, sold, or consumed at the same location.
Big Alcohol and prohibition
During the previous election cycle, the alcohol industry bankrolled anti-legalization campaigns in both Massachusetts and Arizona. The Beer Distributors PAC donated $25,000 to the Campaign for a Safe and Healthy Massachusetts, and the Arizona Wine & Spirits Wholesalers of America donated $10,000 anti-legalization Arizonans for Responsible Drug Policy. Moreover, in May, the Wine & Spirits Wholesalers of America paid for an ad in Politico’s daily Congressional newsletter Huddle, asking lawmakers to fully fund Section 4008 of the FAST Act, which would force a study on “marijuana impaired driving.”
So it surprised many when Rob Sands, CEO of Constellation Brands — an alcohol distributor — indicated the company would consider adding cannabis-infused beverages to their portfolio.
A flight of beer samplers for taste-testing the options at a local brewery. Photo Credit: Diva Thakur
Combining alcohol with CBD
The recreational link between alcohol and cannabis is culturally engrained — ask anybody that partied in college (or has attended a festival, concert, backyard, etc.) whether they used both substances and whether or not they used them together.
Research into the interactions between CBD and alcohol dates back to 1979, when Paul Consroe, PhD published in the journal of Psychopharmacology, “The combination of alcohol plus CBD resulted in significantly lower blood alcohol levels compared to alcohol given alone.” More than 30 years later another study, published in the journal Free Radical Biology and Medicine, concluded CBD prevented acute alcohol-induced liver steatosis in mice. The disease is marked by an increased buildup of fat in the liver — it cannot be cured and afflicts more than 3 million people annually, according to the Mayo Clinic.
Bruce Milligan, Mobius Beverage Corporation CEO, has worked in both industries. Mobius got its start importing tequila from Mexico, and tequila and cannabis have an interesting history. “For a long time in Mexico it was tradition, to put cannabis into [tequila] as a way of preserving your harvest of cannabis,” Milligan explained. The company is now in the early stages of a cannabis-based product that would be added to spirits, which would be sold in dispensaries.
However, it wasn’t that historical relationship that led Milligan to develop a cannabis product for use with alcohol — it was the aforementioned Free Radical Biology and Medicine study.
“As I got further into it I found cannabis was also a neuroprotectant and I thought ‘well alcohol messes up your liver and brain’ so why not put a simple additive to it and make it safer,” he said. Milligan anticipates that as the relationship between CBD and alcohol in humans is further researched, it could become clear that adding CBD to alcohol will help reduce much of its harm.
Anecdotally, Milligan said, he has found that when people use CBD with booze, “people drink less” — which, he suggests, might be why Big Alcohol poured money into anti-legalization campaigns. Additionally, he pointed to several studies that have shown cannabis to be an effective therapy for individuals trying to kick more harmful drugs, including alcohol and opiates.
A cannabis worker in Washington state inspects recently trimmed product. Photo Credit: Rory Savatgy
Federal distribution laws
But there’s more stopping Big Alcohol from entering the market than their desire to protect their bottom line. The disconnect between federal and state drug laws would prevent a company such as Constellation from distributing cannabis-infused spirits. Even distributing state-by-state would be “a pretty hard lift,” Milligan said, because once you cross state lines with a cannabis product, even from one legal state to another, it’s considered drug trafficking by the feds.
Alcohol distributors are regulated by the U.S. Treasury’s Alcohol and Tobacco Tax Trade Bureau, who could choose to revoke or suspend the license of any alcohol business that started distributing cannabis products. An alcohol distributor could, however, create a new company and apply for a distribution license. The three-tiered distribution system of California’s Proposition 646 is modeled after the one already in place for alcohol – and there is no reason not to expect that alcohol distributors aren’t going to try to cash in on being the middleman.
In a Politicoreport, Hezekiah Allen, executive director of the California Growers Association, said that advocates “made some challenging compromises” with the Adult Use of Marijuana Act and the distributor model was “the most challenging.”
“There’s going to be big business in this industry, we can’t keep it out,” he said. “[With this model], we can put all the distributors in the Big Business box and we keep the boutique businesses for ourselves. Yeah, this is big money, big business, but it’s contained.”
Regulatory pushback
It’s worth noting that regulators are in no hurry to close the alcohol-cannabis gap — after Denver’s social use initiative recently declared victory, it took less than a week for the Colorado Revenue Department to ban cannabis from businesses that hold a liquor license. Bans in Maine and Alaska, whose laws permit for so-called cannabis clubs, could follow (comment requests from regulators in both states went unanswered).
Business owners, advocates, and enthusiasts alike are rightfully concerned about Big Alcohol getting into the cannabis space — the industry spent tens of thousands seeking to maintain the status quo and, according to Milligan, it’s taken “entrepreneurs putting their risks, passions, and intelligence on the line” to mold the multi-billion dollar cannabis industry. But Big Alcohol, for now, is more likely to continue funding prohibitionist efforts than they are to prioritize entrance into the cannabis space.
The lower house of Ireland’s legislature is expected to pass a medical cannabis bill, which would regulate the sale, labeling, advertising and marketing of the plant and related products, according to an Irish Timesreport. The bill will be debated on Thursday, but reportedly already has the support of up to 90 of the 158 house members.
If passed, the measure would move to the health committee of the higher house, where it could be amended before moving to the floor for debate and a vote. Minister of Health Simon Harris is also expected to recommend changes to the law once he receives a report from the Health Products Regulatory Authority, which is expected by the end of January. Sinn Féin, an Irish Republican party who to support the bill, plans to request that the HRPA oversees the program rather than establishing new agencies.
Minister of State with responsibility for the National Drugs Strategy Catherine Byrne indicated support for a tightly regulated regime.
“I wouldn’t want people to think we are legalizing cannabis, which is something I’d be totally against,” she said in the report. “We don’t want to see cannabis available on prescription and then being dealt on the streets.”
The legislation was introduced by People Before Profit TD Gino Kenny and has secured support from the Social Democrats, Green, Fianna Fáil, Anti-Austerity Alliance, Labour, Independents4Change parties, and independent lawmakers. Supporters have also proposed the creation of a Cannabis Research Institute which would publish cannabis-related research.
A clinical trial using cannabis to treat children with severe epilepsy is set to begin at Toronto’s Children’s Hospital next year, according to a CBCreport. The study will enroll 20 patients aged one to 18 diagnosed with Dravet syndrome, a rare form of epilepsy that starts in infancy.
The trial, a first in Canada, will test an oral compound that contains both THC and CBD. Research and anecdotal reports have purported that medical cannabis has anticonvulsant properties and epilepsy conditions are approved under every medical cannabis program in the U.S. However — according to Dr. Blathnaid McCoy, a pediatric neurologist who will lead the trials — while research has shown CBD products to be effective in reducing seizures there has not been a rigorous study examining the combination of CBD and THC.
“It varies massively, but [children with] Dravet syndrome often have multiple seizures every day and they can have quite prolonged seizures,” McCoy said in the report. “Certainly when the epilepsy is difficult to control and very treatment-resistant from early on, they can have catastrophic outcomes in terms of their development.”
The clinical products will be supplied by Tilray, a British Columbia-based medical cannabis producer. Catherine Jacobson, Tilray director of clinical research, said the need to develop new medications for children suffering from the “devastating” disease is “very high.”
More than 40 anticonvulsant medications are approved for use in Canada, but 30 percent of patients with severe epilepsy are unable to get relief from any of those conventional drugs.
Rapper Master P, real name Percy Miller, is releasing his own brand of legal cannabis and vape products called Master P’s Trees, according to a report from XXL. The line will include flower and edibles in addition to a “liquid gold” oil line which is produced with edible-grade, preservative-free oil.
“Pioneering the vape movement is what Master P’s Trees is all about. We don’t just want to promote the cannabis industry, we want to shape it in the direction of health, and to promote its health and healing aspects,” he said in a press release. “It’s a forest fire up in here, and Master P’s Trees are blazing the way.”
The liquid gold products include flavor options Sweet Tea, Peach Cobbler, Red Velvet, Irish Apple, Coolaide and Chocolate Beignet. The flower product is branded Master P OG and the disposable pen cartridges line is called “liquid blunts.”
“For as long as I can remember, cannabis has been around helping medical patients, and now it’s a legal lifestyle,” Miller said. “I’m happy to be an innovator in this movement and to offer a healthier option with our edible grade oils.”
Product distribution is expected to coincide with a tour featuring Master P and other artists from his No Limit label. Master P, a New Orleans native, organized and will appear at the iHeart Benefit Fest, a charity concert to benefit Louisiana flood victims, on Feb. 18.
Seantrel Henderson’s 10-game suspension for violating the National Football League’s substance abuse policy has been upheld by the league, according to a CBSreport. The Buffalo Bills offensive tackle was banned for testing positive for cannabis, which he was prescribed to treat his Crohn’s disease. Henderson underwent two surgeries on his intestines to treat the disease during the last offseason.
This is the second suspension this season for Henderson, having already served a four-game suspension for the same infraction. He is set to miss the final five games of this year’s regular season and the first five games of the 2017/2018 regular season if the Bills miss the playoffs this year. According to an NFL spokesman, he will be eligible to participate in all offseason and preseason practices and games.
“The league has notified us of the suspension and we are moving forward with our preparations to play the Oakland Raiders this Sunday,” the Buffalo Bills said in a statement.
According to previous reports, Henderson’s agent Brian Fettner indicated the tackle would consider suing the league if the suspension was upheld.
“His situation is unique, but the drug policy doesn’t line up with the uniqueness. It’s disappointing,” Fettner said in a Democrat & Chroniclereport following the decision. “They’ll give you painkillers by the bottle, which are far, far worse than cannabis. For some reason, the NFL isn’t there yet.”
Henderson was also suspended for cannabis use in college before his Crohn’s diagnosis.
The Maryland Medical Cannabis Commission has awarded preliminary dispensary licenses to 102 dispensaries after receiving 882 license applications, according to a WBAL-TVreport. During a commission meeting, officials also said they were in the process of hiring a diversity consultant to address the lack of diversity claims in the licensing process.
“The commission is in the process and plans to hire an expert consultant who specializes in minority business affairs to do a disparity evaluation and provide future guidance on minority business enterprise initiatives and make recommendations to the commission,” Patrick Jameson, executive director of the commission, said in the report.
The addition of the diversity consultant follows allegations by members of the Black Legislative Caucus that the commission failed to follow the diversity requirements in the law and a lawsuit by Alternative Medicine Maryland — a minority-owned Annapolis-based company — claiming that the commission “ignored race and ethnicity throughout the licensing process in clear contravention of its authorizing statute.”
The agency has met with members of the Black Legislative Caucus and the Governor’s Office of Minority Affairs to discuss the concerns of stakeholders. Additionally, members have asked licensees for their input on a comprehensive diversity plan.
Commissioner Paul Davies admits that the program has been delayed, but does not attribute it to the backlash from the preliminary licensing process — which drew another lawsuit from two companies that were denied a license after the commission reshuffled the application ranking to meet geographic diversity requirements in the medical cannabis law. Instead, Davies said the delay was caused by the program’s early success.
“This program has had more applications that we are aware of than any other state in the country,” he said.
The names of the dispensaries awarded preliminary licenses will be announced on Dec. 9.
We caught up with Matthias recently to talk about his entrepreneurial journey and experience serving the cannabis industry. You can read his responses below, wherein he explains the reasons, science, and strategies behind using CO2 as an extraction solvent. Matthias also explains the planning and early creation stages for the PSICO2 systems, the moment he identified how his hard work would fulfill a special cannabis industry niche, as well as some of the operating specifics of the PSICO2 extractors.
Read the full interview below:
What was your career before founding Paradigm Supercritical?
The journey that led to founding Paradigm Supercritical was within the Cannabis industry. I started working in cultivation around 2010 and seasonally as an assistant oenologist for Eugene Wine Cellars. While working within the cannabis industry, it was suggested that I look into CO2 to see if I could develop something that would work for cannabis. That is when I began researching and developing my first systems. It was a side project at the time but, when I finally had a working model I realized I had developed something special. I then applied for a patent and started taking steps to make the system available to the industry.
How does CO2 work as a solvent for extracting oils?
Normally we experience CO2 as a gas such as when we exhale or as emissions from our vehicles. When CO2 is pressurized it becomes a liquid. Then, if pressure increases enough and heat is added, the CO2 wants to boil and turn back into a gas but cannot because of the pressure. This allows the CO2 to act as a liquid solvent that permeates plant material like a gas.
How are most CO2 extracts consumed?
A typical CO2 system produces low-quality extracts that contain impurities (when compared with PSICO2 extraction methods). These extracts are most often used in vape pens or edible concentrates. The impure extracts require additional processing with ethanol, then emulsifiers must be added to prepare them for vape pens. Unfortunately, this purification method is often undocumented and not mentioned on labeling. Unknowing consumers reading labels proclaiming, ”solvent-less”, “solvent-free”, or “pure CO2 oil” assume that only CO2 was used in the process. Paradigm Supercritical Innovations’ PSICO2 extraction systems are the first systems to produce highly pure extracts that are ready to use without an ethanol post process.
What can you produce with a PSICO2 extraction system?
Our systems provide a range of flavorful, brilliantly colored, truly solvent-free extracts. When using a PSICO2 extractor there is no need to refine the extract. The most common and easily produced product is CO2 shatter. To perform this method, simply place the pure PSICO2 extract into a vacuum oven and let it melt into form. PSICO2 extracts are great for use in edibles, tinctures, and vape pens. Rather than extracts starting with a concentration of 35% from other systems, PSICO2 extracts have concentrations as high as 80% cannabinoids.
How long does it take to complete an extraction on a PSICO2 system?
Paradigm Supercritical Innovations’ dual chamber design allows for continuous operation. While one chamber is being emptied and reloaded, the next chamber is introduced into the process. There is no need to shut down the system to change from processing one chamber to the next. We have two basic designs; THE BANDIT is a 3 liter(L) system and THE REBEL is a 5L system. On the Rebel, each pound of trim takes around an hour to process. Each of the 2.5L chambers takes about 1.5-2 hours depending on the quality of the source material. On the Bandit each pound of material takes about two hours to process. Each of the 1.5L chambers takes about 1.5 hours to complete. We also offer multi-unit systems that will allow for double, triple, or quadruple the processing capacity without added labor costs.
How many people do you have on your team?
We are a small but growing company. To be honest I would have to include all the local businesses that help our company get the materials we need. We have a sales team of three, and assembly team of three and three administrators. For all of our other needs we rely on the expertise within our community. Whenever possible we support our local economy. Our machinists, parts and equipment suppliers, HVAC and refrigeration suppliers, and a whole range of independent contractors for other technical needs are locally sourced. We hope that those businesses realize they’re a part of the community we’re trying to build.
Can you speak more about CO2 extracts needing to be winterized or purified with ethanol in order to remove the impurities?
Purification by way of ethanol winterization is the most common method for refining extracts made on other systems. This method takes over 72 hours to complete, leaving you with a costly 30-40% loss of product. Additionally, equipment used for ethanol winterization can have costs starting as high as $30,000.00. On extracts from a PSICO2 system, there are no additional purification or winterization processes needed. With a PSICO2 system, the only time ethanol is used is for the purpose of minimizing waste and maximizing returns. There are three basic ways: To use ethanol as a rinse to capture cannabinoids still left in the CO2 processed trim. To clean the equipment, recouping residual cannabinoids left inside the system. Finally, to polish extracts that are made from compromised or damaged trim.
What are the benefits of extracting with one of your systems?
With a PSICO2 system, you get the benefits of using a safe solvent while still producing the highest quality CO2 extracts on the market. PSICO2 processing is considered a green process. CO2 used in a PSICO2 extraction system is captured from industrial processes, which would normally be released into the atmosphere. This means that extracting cannabinoids with CO2 as a solvent minimizes your business’ carbon footprint. The CO2 that you use for extraction processing can be emptied into grow room tanks and then fed to your plants, completing the CO2 cycle. CO2 is cheap, therefore, your overall cost of operation is lower than with other solvent choices. It’s one of the greenest choices among the solvents that are available. PSICO2 systems are developed for the demands of the industry and our family of customers has helped to shape the design. PSICO2 systems save time and money by reducing downtime with continuous operation, obtaining the maximum concentrations of cannabinoids for extracts, and eliminating large additional expenses and labor of winterization.
Can anyone use the PSICO2 systems?
We can train anyone. When you purchase a PSICO2 system from Paradigm Supercritical Innovations, training is included. We take our customers through a comprehensive two-day training process where they learn how to run the system, how to set the best parameters for the ideal extraction, and system maintenance and cleaning to ensure optimal performance. We have a growing community of customers that share and offer feedback, and the trade secrets they share with us are an advantage for PSICO2 family members. We also offer more in-depth consultation for any lab set-up or post process production needs. We teach techniques that allow our customers to have the information they need in order to produce the best extracts.
What kind of customer service do you offer?
When you purchase a PSICO2 system from Paradigm Supercritical Innovations you are gaining new friends and family. We believe that the network of caring people and their families appreciate sharing advice and opinions with others in the industry. We feel that this is one of the things that has made the industry so great. We take this to heart and treat you like family. We provide 24-hour tech support. If our phone rings, someone is there to answer. We offer equipment maintenance packages to ensure minimal downtime and provide initial lab setup advice, as well as individualized consultation packages.
Where do you see Paradigm Supercritical ten years from now?
I want all of the industry to know us as the company that kept CO2 affordable to those that built the industry. We want to provide systems that allow them to continue to grow with the industry. While big business entering the industry to make a buck spend exorbitant amounts of money for technology that doesn’t work well, our customers will have a system that cost less, extracts better and eliminates the need for post-processing time and equipment. Our technology allows for such a superior extraction that it is my dream that people began to look specifically for PSICO2 extracted products.
How do you order a PSICO2 extraction system?
Give us a call at 1-866-CO2-5678 (262-5678), or use the Contact Us form on our website. PSICO2 systems can take 4-6 weeks to build. After completing a purchase agreement, our team will be with you every step of the way. We offer turn-key options, can source all of your ancillary equipment needs, and offer consultation for post processing programs. Financing is available. For more information visit psico2extractors.com
If you could offer one piece of advice to someone starting a career ancillary to cannabis, what would it be?
There is still a negative stigma surrounding cannabis, you have to be careful when marketing to the industry. You have to be prepared for what that brings. From banks, property leasing, to shipping, it is scrutinized more when it is related to cannabis. Even though you may be an ancillary company you will be treated as if you are directly involved with the production, manufacturing, and distribution of cannabis, that can be hard to deal with. Aside from getting tax relief for your business, many organizations will be unwilling to do business with you, and you are best to just consider yourself a cannabis business and implement the appropriate precautions.
Thanks again, Matthias, for answering our questions and sharing your experience with our audience! To learn more about Paradigm Supercritical Innovations, visit the company’s website psico2extractor.com or call 1-866-262-5678.
Dr. Hunter S. Thompson’s widow, Anita Thompson, plans to develop “Gonzo” brand cannabis using six strains that the late author actually smoked, according to an Aspen Timesreport. The decision comes after Thompson bought the Owl Farm property in Aspen, Colorado, granting her exclusive rights to the counter culture icon’s likeness and the “Gonzo” two-thumbed fist logo.
Thompson is working with an unnamed Colorado cannabis company to grow the strains, which were favored by the Godfather of Gonzo.
“Since it became legal I get approached probably once a month by cannabis growers, dispensaries,” Thompson said in the report. “I’ve had probably 10 meetings in the last three years and I always ended up saying ‘No’ because it’s the same story every time: somebody wants to slap Hunter’s name on their strain.”
She indicated that she was also worried about getting into the cannabis industry because her main focus was preserving and promoting the author’s literary legacy, rather than his hard-partying lifestyle. Thompson is famously quoted saying, “I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they’ve always worked for me.”
“For 10 years we were always careful to steer the conversation back to Hunter’s work,” she said. “Because it was never guaranteed that Hunter’s work would be appreciated into this generation.”
Israel’s Teva Pharmaceutical Industries will market the world’s first cannabis inhaler able to deliver flower at the precision and safety of conventional drugs, according to a Jerusalem Postreport. The inhaler, currently only used for pain management at the Rambam Medical Center, was developed by Tel Aviv-based Syqe Medical.
“Teva Israel is entering the field of medical cannabis out of a deep commitment to patients coping with pain, which is one of the company’s core therapeutic areas,” Avinoam Sapir, Teva CEO, said in the report.
The inhaler was in development for more than five years, using 3D printing technology made by Stratsys. It allows for the delivery of raw plants, the control of airflow and temperature, and includes a mechanism to enhance absorption and compliance.
Elon Eisenberg, director of pain research at Rambam Medical Center and the former director of the Health Ministry, said the device allows health professionals to better estimate the amount of cannabis administered via vaporization and smoking, which he called “the main problem facing doctors and researchers.”
“The ability to do so forms the basis for administering proper treatment,” he said. “The development of this inhaler fulfills our greatest hopes to be able to administer accurate and reliable doses of cannabis.”
Currently, there are about 26,000 licensed medical cannabis patients in Israel. That number is expected to double by 2018.
Editor’s note: A previous version of this article’s headline incorrectly stated that this was the first-ever medical cannabis inhaler. The headline was updated on 11/30/2016.
HempMeds Mexico, a subsidiary of California-based Medical Marijuana, Inc. is set to export its Real Scientific Hemp Oil to Colombia, the company announced in a press release. HempMeds is currently the only company with approval from the nation’s Federal Commission for the Protection against Sanity Risk (COFEPRIS) to import a cannabis product into the country.
Dr. Stuart Titus, Medical Marijuana, Inc. CEO, said the deal will help nurture new markets in Colombia, where the company hopes to eventually open local operations and work with federal regulatory agencies to build advanced distribution channels.
“Here in the United States, we are able to get access to RSHO and other cannabidiol products online; however, residents of other countries are not as fortunate due to regulatory issues with cannabis-based products,” he said in the release. “We are very excited that Colombians will now have access to all of the benefits of CBD.”
Representatives from HempMeds attended Expo Mede Weed 2016 in Medellin, Colombia, where they received the first product order from federal officials. Dion Markgraff, president of HempMeds, said their exhibition at the expo “gave Colombians the opportunity to explore and interact” with different cannabis companies and to learn from industry experts across the globe.
HempMeds will make a substantial donation of product to doctors and some low-income patients after Colombian government approval.
South Africa’s Parliament has announced that the Department of Health will begin regulating medicinal cannabis for a variety of chronic conditions for which traditional treatment options have failed or have intolerable side effects, the Ladysmith Gazettereports.
The decision comes after two years of deliberations and the death of MP Dr. Mario Oriani-Ambrosini, who introduced the bill during his own battle with terminal cancer. The bill was reintroduced by MP Narend Singh following the death of his colleague in 2014.
“This heralds a great step forward for public access and research into the use of medicinal cannabis,” Singh said in the report. “What matters now is that the Department ensures that access to medicinal cannabis will not be restricted to the rich, but that anyone who needs it will be able to afford it, and get it.”
Severe chronic pain, HIV/AIDS, wasting syndrome, epileptic seizures, severe muscle spasms, and other conditions related to cancer and cancer treatments are among the conditions that will be considered for medical cannabis use.
The Health Department expects to begin accepting public comment and to have regulatory framework for the program by the end of January 2017. It could be implemented by April.
About 2,000 people jailed in California for marijuana crimes are likely to be freed under Proposition 64, with thousands and possibly tens of thousands more potentially able to clear their criminal record of marijuana-related charges, according to a San Francisco Chroniclereport.
The referendum not only legalized cannabis for adult use but also provided for the retroactive expungement of most marijuana-related convictions. According to the state attorney general’s office, California police made 8,866 arrests in 2015 for felony possession, sale, transportation and cultivation; 7,987 of those arrested were adults and 879 were juveniles.
San Mateo County District Attorney Steve Wagstaffe expects police to arrest and cite fewer people under the new regime because it won’t be worth the paperwork and man hours. He said it “will be common” for county jails to start releasing defendants charged with marijuana-related crimes who could not post bail because most of them have already served more time than they would if convicted of what is now considered a misdemeanor.
The number of people in California with previous marijuana convictions is unknown, but it is estimated in the hundreds of thousands — many of whom are low-income Black people who in 2010, according to the American Civil Liberties Union, were more than twice as likely to be arrested for possession in the state.
The California Judicial Council has already posted the forms for anyone seeking to expunge or seal their record, and people currently awaiting trial can ask for a sentence or charge reduction in-person at their next court date.
Buffalo Bills offensive tackle Seantrel Henderson is facing a 10-game suspension for violating the NFL’s substance abuse police for the third time over his cannabis use, according to a report from the Sporting News. Henderson uses cannabis to manage the pain from Crohn’s disease and has already served a four-game suspension this season for a similar violation.
“He needs cannabis,” an unnamed source said in the report. “You can’t take pain killers with the way his intestines are.”
Henderson has used cannabis since his college days — which was known by NFL team owners, causing his draft stock to fall, according to the report. He has appealed the suspension and a decision is expected this week.
Following Henderson’s first suspension this year, his agent Brian Fettner said, “There is zero allowable medical exemption for this per the NFL; however, there clearly should be.” The tackle is considering suing the league if his 10-game suspension is upheld.
According to an ESPN survey of active NFL players earlier this month, 61 percent said they believed fewer players would take pain-killing shots if they were allowed to use medical cannabis; 41 percent said cannabis would be more effective at controlling pain than opioid-based drugs.
The Player’s Association has also convened a committee comprised of science and medical experts to explore the use of cannabis as an alternative pain management therapy to opioid drugs. According to NFL insider Ian Rappaport, at least 10 of the league’s 32 team owners indicated a “groundswell” of support by principals to ease cannabis-related punishments. However, the league remains officially against any cannabis policy changes.
Iowa’s limited medical cannabis program is set to expire in July, but advocates, along with some state lawmakers, see the sunset as an opportunity to rewrite a comprehensive set of rules for the program when the session reconvenes in January, the Des Moines Registerreports. Under the current law, passed in 2014, medical cannabis oil use is allowed in the state but only for the treatment of epilepsy; however, a separate law bars the manufacture and distribution of the oil, essentially making it illegal for patients to obtain it.
Republican State Rep. Clel Baudler plans on introducing a bill that would permit both production and distribution of cannabis oil in the state, which has previously been opposed by other members of his party.
“Last year there was a hodgepodge of panic, if you will, in my caucus to do something. Well if we’re going to do something, let’s do something smart,” Baudler said in the report. “If these people want it grown in Iowa, processed in Iowa, I think we can make that happen.”
A bill by Republican Rep. Peter Cownie attempted to address this issue during last session, introducing a bill that would have allowed cannabis oil production and distribution in Iowa. That bill was blocked by House Ways and Means Committee Chairman Tom Sands, a Republican.
But with the expiration date closing in, Democratic Rep. John Forbes said the legislature is now “under the gun.”
“The people that are currently accessing the medication will be breaking Iowa law as of July 1, and we can’t allow that to happen,” he said.
Baudler’s proposal would allow individuals to obtain a permit to cultivate cannabis with THC content of less than 3.5 percent but does not expand the conditions that qualify for medical cannabis treatment.
“Somebody smarter than me would have to tell us which disease or condition medical marijuana extract could be used for,” he said. “Don’t tell me, ‘Well I’ve seen it on the Internet.’ I’ve seen horses talk and nuns fly on the Internet.”
Republican Gov. Terry Brandstad said he would “keep an open mind” on allowing for the production and distribution of cannabis oil in the state if “unintended consequences” are limited.
Canopy Growth Corporation has agreed to acquire MedCann GmbH Pharma and Nutraceuticals, the company announced in a press release. MedCann is a Germany-based pharmaceutical distributor who has successfully placed Tweed-branded medical cannabis products in German pharmacies. Tweed is one of Canopy Growth’s core brands.
Bruce Linton, Canopy CEO and Chairman, said the acquisition positions the company for “domestic medical production inside Germany if the regulatory environment shifts.”
“Germany has begun a process of enabling medical access to cannabis and through a policy that recognized Canopy as the first legal supply source from North America,” he said in the release. Germany’s federal government requires that imported medical cannabis products come from companies that produce consistent strains with reliable cannabinoid profiles.
“Germans need access to high-quality cannabis and Tweed’s products are proving to be up to the very strict standards set by the federal government,” Dr. Pierre Debs, founder of Medcann, said in the release. “Working together as one team will allow Canopy Growth through Tweed, Tweed Farms, and future production sites to supply the unmet demand that has been building over the past decade.”
German law does not permit medical cannabis cultivation in the nation and currently all products are imported from Canada – the home country of Canopy – and Holland.
The Toronto Stock Exchange must approve of the deal before it is finalized.
OrganiGram Holdings is partnering with the “Trailer Park Boys” to develop branding and packaging for cannabis products aimed at Canada’s recreational users, the Canadian Pressreports. The move is in anticipation of the federal government legalizing cannabis throughout the country in the spring.
“We remain firmly committed to producing and supplying world-class cannabis for our increasing patient base; and we plan on maintaining that commitment in the future at OrganiGram,” Ray Gracewood, chief commercial officer for OrganiGram, said in a press release. “But we also need to be strategic about the opportunities that will be afforded to us with the advent of recreational use in Canada.”
Louis Thomas, president of Sonic Entertainment Group who represented TPB Productions Limited in the deal, said they had been “monitoring closely” how they would enter the cannabis space and found a good fit with OrganiGram.
TPB Productions is indirectly controlled by “Trailer Park Boys” actors Mike Smith, Robb Wells, and John Paul Tremblay — the trio play the series’ main characters “Bubbles,” “Ricky,” and “Julian,” respectively.
The terms of the initial five-year deal were not disclosed but include exclusive product and branding rights in exchange for royalties and other non-monetary considerations.
A Supreme Court in Bermuda has ruled that “ordinary citizens” are technically able to apply for medical cannabis licenses, the Royal Gazettereports. Judge Stephen Hellman ruled that the Minister of National Security has the ability to consider a medical cannabis application rather than Ministry of Health, meaning one might not necessarily need permission from the Chief Medical Officer to obtain medical cannabis.
Kamal Worrell, the attorney who argued the case, pointed out that under the 1972 Misuse of Drugs Act, the National Security Minister can issue a license for the importation of controlled substances, and at least one person has bypassed the Health Ministry to receive a personal license to possess cannabis-related products.
“Forms exist for this process, which we have had sight of as a result of this exercise,” Worrell said in the report. “There are also guidelines to assist those who wish to make a personal application for the importation and use of cannabis, or any other controlled drug, for that matter.”
The Health Minister, along with the Attorney General’s Office, has denied medicinal cannabis requests under the 2014 Cannabinoid Pharmaceutical Products Act, which allows the Health Minister to deschedule or remove drugs from the prohibited list on the recommendation of the Chief Medical Officer — Worrell successfully argued that the 2014 Act does not supersede the 1972 Act.
“A lot of people have been asking for the medical use of cannabis, particularly cancer patients. The tragedy is that the minister, together with the Attorney General’s chambers, had taken the view that the law did not permit such a thing,” Worrell said. “But once a doctor says that they are prescribing it for you, the minister would be hard-pressed not to follow through on the recommendation.”
According to the report, the island’s government is also considering decriminalizing possession of small amounts of cannabis for personal use.
While mainstream insurance carriers such as State Farm Insurance, George Petersen Insurance Agency, and Wells Fargo Insurance Services have yet to touch the cannabis industry, other smaller and independent insurers are willing to take on cannabis clients, according to a North Bay Business Journal report.
John Ford, proprietor of the Eureka, California-based John Ford Insurance Agency, began serving the industry two years ago and since then, his business has grown 62 percent. He estimates that 80 percent of his 130 clients are canna-businesses, including cultivators, distributors, and dispensaries.
“Mainstream carriers are looking in from the outside, but salivating as well,” Ford said in the report.
Ford previously worked with Lloyd’s of London to underwrite the industry; however, they stopped insuring cannabis firms in 2015 over the conflict in state and federal laws. He is now working with specialty insurers Hannover RE and Knight Specialty Insurance.
According to Nick DiNicola, owner of San Francisco’s Nick DiNicola Insurance Services, it’s important that canna-business operators be honest about their business because if they need to make a claim and are insured as, say, a nutrition shop, their claim would probably be denied. When DiNicola first started issuing insurance to the cannabis industry 10 years ago, many of his clients asked him to sign a non-disclosure agreement, but as the legal industry has expanded people have become “much more open” about what it is they do, exactly.
DiNicola explained that while insuring the industry is a risk, it’s not as expensive as most operators assume.
“The biggest challenge for the cannabis industry is there are not enough players out there,” he said; and as more carriers get on board the rates will become more competitive.
Reggie Williams, a former Cincinnati city councilman and 14-year National Football League veteran, is crediting medical cannabis use with improving his quality of life. The 1986 NFL Man of the Year has undergone 24 operations in his right knee and suffered a stroke on New Year’s Eve 2015 and has turned to cannabis therapies to treat his chronic pain.
“I’m enjoying some significant benefit in the quality of my life because of medical cannabis topicals,” he said in the Cincinnati Enquirerreport. “There is reduced pain and inflammation that I experience chronically in my joints.”
Looking back at a video shot by the newspaper just two years ago, Williams describes the agony — “I was almost frothing at the mouth” from the pain, he said. Now, following his medical cannabis regimen, “I can jump out of a car, put my shoes on and start walking without any of the limbering and stretching I had to do every time I got in and out of a car or a table or any close space.”
Williams admits to using cannabis throughout his football days with Dartmouth and the NFL; his term as city councilman, and while working for Disney. He now uses products with higher CBD levels to help combat his pain.
Currently, Williams is receiving treatment from a medical cannabis facility in the San Francisco Bay Area. He still resides in Ohio — which has a medical cannabis program but it is not yet operational. Following his successful treatment, he is hoping that the NFL will reconsider their medical cannabis ban, and has offered his input for any policy-developing organization the league might put together.
“It’s an opportunity to educate everybody,” Williams said. “To those who say [cannabis] can’t [help] a competitive football player, I’d say I may be an exception to that profile. My candor is directly related to the benefits I’ve derived.”
The next goal for the former linebacker is to run onto the field at Paul Brown Stadium during a pre-game introduction next season.
