As U.S. Attorney General Jeff Sessions testified before the House Judiciary Committee on Tuesday, he fielded pressing question on the Trump campaign’s contacts with Russians – and his past remarks on marijuana.
Steve Chabot, a Republican from Ohio, which is in the process of implementing its medical marijuana program, noted that while it remains illegal under federal law, many states have legalized cannabis for medicinal or recreational purposes. Given that disparity, Chabot asked Sessions to clarify, “What is your department’s policy on that, relative to enforcing the law?”
Sessions did not add any new nuance to the status quo, responding, “Our policy is the same really, fundamentally, as the Holder-Lynch policy, which is that the federal law remains in effect and a state can legalize marijuana for its law enforcement purposes, but it still remains illegal with regard to federal purposes.”
Moments later, Stephen Cohen, a Democrat from Tennessee, where medical marijuana is still under discussion, followed up on Sessions’ response. Referring to the Rohrbacher-Farr amendment, Cohen outlined how former attorney generals Eric Holder and Loretta Lynch abided by federal enforcement limits imposed by congressional budget appropriation in states that had passed medical marijuana laws. He asked, “Will you abide by congressional appropriations and limitations on marijuana when it would conflict with state laws?”
Cohen also pushed back on a quote from Sessions earlier this year regarding the relationship between marijuana and heroin. In March, Sessions said in a speech to law enforcement, “I’ve heard people say we could solve our heroin problem with marijuana. How stupid is that? Give me a break!”
In the prepared notes for that speech, Sessions had written, “I am astonished to hear people suggest that we can solve our heroin crisis by legalizing marijuana — so people can trade one life-wrecking dependency for another that’s only slightly less awful.”
On Tuesday, Cohen pressed Sessions on this claim. “Marijuana is not as dangerous as heroin — do you agree with that?”
“I think that’s correct,” replied Sessions.
“Well thank you sir,” responded Cohen, who went on to advise Sessions that when it comes to enforcement the attorney general should “look at the limitations you’ve got… Put your enforcement on crack, on cocaine, on meth, on opioids, and on heroin. Marijuana is the least bothersome of all.”
Cohen quoted a recent study and advised, “In states where they’ve got medical marijuana they have 25% less opioid use. It gives people a way to relieve pain without using opioids… So I would hope you’d take a look at that.”
Sessions responded: “We will take a look at it. We will be looking at some rigorous analysis of the marijuana usage and how it plays out. I am not as optimistic as you.”
Cohen wrapped his line of cannabis questioning with a reference to another Sessions quote that has been an ongoing source of concern to marijuana legalization advocates.
“You said one time that ‘Good people don’t smoke marijuana,’” he said. “Which of these people would you say are not good people?” Cohen listed Republicans John Kasich, George Pataki, Rick Santorum, Ted Cruz, Jeb Bush, George Bush, Arnold Schwarzenegger, and Supreme Court Justice Clarence Thomas, implying all of those listed have at some point said they used marijuana.
“Which of those are not good people?” he asked.
Sessions responded: “Let me tell you how that came about. The question was what do you do about drug use, the epidemic we’re seeing in the country, and how you reverse it. Part of that is a cultural thing. I explained how when I became United States Attorney in 1981, and drugs were being used widely, over a period of years, it became unfashionable, unpopular, and… it was seen as such that good people didn’t use marijuana. That was the context of that statement.”
Watch Sessions’ original “Good people don’t use marijuana” statement
Polly joined The Cannabist in December 2016 as a digital producer. She has been creating print, web and video content for a couple of decades. She returned to her home town of Denver in 2012 after living in eleven other cities in four countries, and…
“This bud’s for you” has taken on a whole new meaning for Chris Burggraeve.
The former chief marketing officer for Anheuser-Busch InBev NV, the brewer of Budweiser beer, is moving from barley and hops to cannabis as the alcohol industry casts its sights on the burgeoning market for state-sanctioned marijuana.
Burggraeve, 52, has made two investments in the space. Most recently, he joined the advisory board of GreenRush Group. The San Francisco-based startup, which says it aims to be the Amazon of weed, closed its $3.6 million Series A fundraising round last week. Burggraeve, a native of Belgium with a master’s degree in economics, also co-founded Toast, which makes pre-rolled joints.
After leaving the corporate marketing world about five years ago, Burggraeve said he’s focused on teaching, consulting and investing in what he considers disruptive categories. Cannabis, he said, could shake up the large beer companies in the same manner that smaller, independent brewers did over the past 20 years.
“The same way that craft beer started and, for the longest time, was ignored and then exploded, there’s no reason why the same thing wouldn’t happen in this space,” he said. “There will be part supplementing and part complementing. The jury is out on how and where that will happen.”
GreenRush is a technology platform that connects consumers, dispensaries and delivery people to bring pot to people’s doors. The company, which is live in California and Nevada, plans to expand to other states, including New York and Massachusetts.
Cannabis is legal for recreational use in eight states and the District of Columbia, including California. That means one in five American adults can ingest the drug however they please. Twenty-one additional states allow for medicinal use of the plant. The industry hit $6 billion in sales in 2016, a figure that is expected to reach $50 billion by 2026, according to Cowen & Co.
Still, investing in marijuana isn’t without risk. The Trump administration has sent mixed signals, though Attorney General Jeff Sessions is an ardent opponent of legalizing pot. And traditional banking institutions have largely stayed away, forcing most transactions to be conducted in cash.
Constellation may have broken the taboo. Companies may now find the risk worth it, according to Burggraeve. Otherwise, alcoholic beverage companies could find themselves falling behind.
“It will all merge and cross-fertilize and fuse — not because the companies want it, but because the consumers want it,” Burggraeve said.
But the regulations also adopt the high court’s unanimous order that existing distribution licenses for recreational licensees granted on or before Sept. 14 will remain in effect for the full year from the date they were issued.
SANTA ANA – Three Santa Ana police officers pleaded no contest to misdemeanor charges and were sentenced to community service in connection with a pot shop raid caught on surveillance video in 2015.
Officers Jorge Arroyo, 34, Nicole Lynn Quijas, 39, and Brandon Sontag, 33, were seen on security video eating snacks while serving a search warrant at Sky High Holistic, a marijuana dispensary on 17th Street in Santa Ana, in May 2015. The video also shows two of the officers making disparaging remarks about a disabled woman who was a shop volunteer.
When the footage was first released by the dispensary’s lawyer, some thought the officers were eating marijuana edibles, but prosecutors on Wednesday said the items were protein bars and cookies, and that there was no evidence that officers consumed any marijuana products.
The Orange County District Attorney’s Office filed misdemeanor petty theft charges against the trio. Sontag was also charged with vandalism for breaking some of the store’s surveillance cameras.
On Tuesday, Arroyo and Quijas both pleaded no contest in Orange County Superior Court to one misdemeanor count of petty theft and were sentenced to 40 hours of community service. In a no contest plea, the defendant does not admit guilt.
Sontag pleaded no contest to one misdemeanor count each of petty theft, and vandalism under $400. He was sentenced to 80 hours of community service and ordered to pay full restitution.
Prosecutors said Sontag damaged five of the shop’s surveillance cameras, each valued between $80 and $100, by banging and smashing the lenses. Prosecutors said Sontag and Quijas entered the break room and each took a protein bar.
All three officers ate the protein bars, while Quijas and Arroyo took cookies with them when they left, prosecutors said.
In the aftermath, then-Chief Carlos Rojas fired the trio, but all three have since been reinstated, authorities said. Sontag sued to get his job back and was reinstated by a judge this year while his case is pending. Arroyo and Quijas appealed their terminations and were reinstated in a settlement with the city.
At the time, the pot shop was accused of operating without a license. It remains open.
The city last year agreed to pay Sky High Holistic $100,000 to settle a federal lawsuit in connection with the raid and to dismiss misdemeanor charges against a dozen people accused of unlawfully operating the dispensary.
As early as this week, President Donald Trump is set to declare the opioid crisis a “national emergency.” Trump telegraphed this when he recently told reporters that he would soon have a “major announcement” on the “massive opioid problem,” and people inside the White House are now leaking word that this announcement will herald an all-hands-on-deck push to combat the epidemic.
But members of Trump’s own handpicked commission to combat the epidemic aren’t nearly as confident, I’m told. They are increasingly worried that the Trump administration will not actually follow through with a robust response, even if he does go before the cameras and declare the crisis a national emergency, and they are increasingly annoyed by the efforts of people inside the administration who are resistant to such a response, one member of the commission says.
In a surprisingly blunt interview with me, Patrick Kennedy, the former congressman from Rhode Island who is a member of the President’s Commission on Combating Drug Addiction and the Opioid Crisis, candidly described the mood on the commission as one racked by pessimism about the president’s willingness and ability to follow through with a response that matches the scale of the human disaster that has unfolded.
The commission is set to release a final report of recommendations for combating the crisis on Nov. 1, and “the worry is that it won’t be adopted,” Kennedy tells me.
This apparently includes the head of Trump’s commission: New Jersey Gov. Chris Christie, R, whom Trump picked for the role. Kennedy told me that Christie has confided to him that he thinks failure on the opioid crisis could deal a debilitating blow to Trump’s presidency.
“Christie doesn’t mince words,” Kennedy said. “He said, ‘If he doesn’t recognize this as the issue of our time, his presidency is over.’ ” Kennedy added that Christie, an early supporter of the president, said he had conveyed a variety of this sentiment to Trump himself.
Since then, it has been unclear whether Trump would actually go through with the declaration – that is, until last week, when he suddenly vowed that he would be doing just that. Politico reported that this blindsided members of the Trump administration, who are scrambling to figure out how a response commensurate with that declaration would be implemented. Politico also quoted unnamed officials saying that some in the administration, such as budget chief Mick Mulvaney, are wary that a declaration of national emergency could lock the administration into supporting overly large public expenditures to combat it.
Kennedy confirmed this to me on the record and went even further, claiming that these differences had resulted in tensions between Christie and administration officials such as Mulvaney. “The tension is between the Mulvaney crowd, who is ideological about the numbers, and the Christie crowd, whose fidelity is towards the reality of what’s most practical,” Kennedy said, adding that there are “internal arguments” underway that he defined this way: “Can we do this on the cheap, or are we going to be serious about saving lives?”
The key distinction to understand here is this: While it is certainly desirable for Trump to declare a national emergency, it is not clear how meaningful that will prove in substantive terms, even if he does it. Axios reports that the administration is preparing a massive “public relations” effort that will include unspecified requests for funds and a public role for Melania Trump.
But while such a general vow of seriousness will be welcome, what matters is the follow through. “Visiting rehab centers . . . been there, done that,” Kennedy said, by way of illustrating the difference between photo ops and an actual response.
This is where the recommendations of the president’s commission come in. Kennedy tells me that the commission members are converging on a fairly robust set of recommendations that include expanded health insurance coverage, training and deploying health-care workers to fill the requests of states for help, and additional subsidies to fund addiction treatment.
It will be on the administration to determine how to implement such a set of responses and what it might cost, but Kennedy says commission members worry that the administration will try to lowball that cost. “To implement the recommendations that we’ll offer, it will require hundreds of billions of dollars,” Kennedy says.
Vox recently published a good rundown on what experts think will be needed to combat the crisis. A combination of tactics is called for, including both prevention (such as strengthened federal oversight to reduce the amount of opioids flooding the market and prescriptions handed out to patients) and medicinal treatment for addiction (such as using methadone or naltrexone to blunt the craving for opioids).
Trump’s declaration of an opioid emergency will collide with the GOP repeal drive
Another concern that commission members have is that even if Trump declares a national emergency on opioids, efforts to combat them will end up getting undermined by Trump/GOP health-care policies and priorities. Trump and Republicans have vowed to keep pushing for repeal of the Affordable Care Act, and any version of repeal would include enormous cuts to Medicaid, which commission members fear would set back efforts to combat the crisis, including deep in Trump country.
What’s more, Kennedy says that continued sabotage of the ACA by Trump could also undermine such efforts, since destabilizing the exchanges could leave lower-income people without coverage options in parts of the country hit hard by the opioid epidemic.
Kennedy tells me he has been pushing for the commission’s final report to include a firm declaration that further efforts to repeal or sabotage the ACA would run counter to the goal of treating opioids as a national emergency. He says other members of the commission who are Republican governors, including Christie and Charlie Baker of Massachusetts, agree with this. Another member, Gov. Roy Cooper of North Carolina, D, has voiced this sentiment publicly.
“The current efforts to repeal the ACA, as opposed to strengthening it, are irreconcilable with dealing with this crisis in the way that it needs to be dealt with,” Kennedy says, adding that there’s widespread agreement on the commission on this point.
This will set up a very bad political problem for Trump: His own declaration that opioids are a national emergency will – or should – dramatically undercut any further efforts to repeal or sabotage the health-care law, a goal Trump and Republicans can’t seem to wean themselves off of.
In the end, what will the commission members do if the administration falls short of the response they are advocating?
“Every single member of this commission has principled independence on this issue,” says Kennedy. “I believe they’ll distance themselves from the president if he doesn’t follow our recommendations.”
The deadly wildfires that ravaged communities and wineries in Northern California also severely damaged numerous marijuana farms, just before the state is expected to fully legalize the drug, in a disaster that could have far-reaching implications for a nascent industry.
At least 34 marijuana farms suffered extensive damage as the wildfires tore across wine country and some of California’s prime marijuana-growing areas. The fires could present challenges to the scheduled Jan. 1 rollout of legal marijuana sales at the start of an industry that is expected to generate billions of dollars in revenue.
“It’s the darkness right before the dawn of legal, regulated cannabis in California,” said Hezekiah Allen, executive director of the California Growers Association, who cautioned that the full extent of the damage remains unknown. “These businesses are in a really vulnerable position, and this really came at about the worst time it could have. It means we’re on our own.”
The fires burned swaths of Mendocino County, which is part of what is known as California’s “Emerald Triangle,” the nation’s epicenter of marijuana growing. It also devastated Sonoma County, which is best known for wine but has seen an increase in cannabis farming. The fires killed at least 42 people and damaged thousands of buildings, according to the California Department of Forestry and Fire Protection.
Some marijuana farms were completely destroyed, and many others are believed to have been heavily damaged by fire, smoke and ash. Structures used to store dried marijuana burned, as did greenhouses and irrigation lines. Many marijuana cultivators live on their farms, and some homes burned to the ground.
Erich Pearson, co-owner of SPARC, a large medical cannabis dispensary with two locations in San Francisco and others north of the city, saw his crops in Glen Ellen, California, about 50 miles north of San Francisco, engulfed by flames after awakening to the smell of smoke. The first thing he saw after getting close to the farm was a metal-roofed barn on fire. It was filled with marijuana harvested to sell on the legal market.
“We lost everything we harvested to date, and had significant damage to what’s left,” he said.
There is concern that what has been destroyed, as well as the damage from smoke, ash and lack of water for crops that did survive, could seriously impact the supply for customers when marijuana is legal for sale. The fire has compounded existing problems with the initial start of sales because of a regulatory mess: Many municipalities and the state have not released draft regulations for how businesses must comply with the new law. Businesses in some places, including San Francisco, are not likely to be able to open Jan. 1.
“Now, we might be facing a much smaller harvest than we were anticipating, which could potentially drive the price up,” said Josh Drayton, deputy director of the California Cannabis Industry Association. “It’s going to touch every different piece of the industry, and we can’t get ahead of this yet. We still don’t know how much has survived, how much has been lost.”
Chiah Rodriques, chief executive of Mendocino Generations, a marijuana collective in Mendocino County, said that most of the 40 farms she works with were only about 25-to-50-percent harvested when the fires broke out earlier this month. About a quarter of the farms were affected by either fire or smoke, she said, and just 10 of the 40 have the local permit necessary to become compliant with the state, though all are working toward them. None of them have crop insurance, she said.
Rodriques said that the fires could lead to less usable marijuana on the market come January. The one saving grace might be to repurpose affected plants and use them for cannabis oil and other tinctures that can be sold at dispensaries. The oils are far less lucrative than the flowers, the part of the plant that is consumed – and this year was expected to be a bumper crop.
“You’re looking at the difference between $800 to $1,500 a pound to now getting $100; it’s a huge blow,” she said, especially when farmers have spent so much money trying to become compliant with laws.
“These people put everything they had into paying for this fee and this tax and this permit and this lawyer, one thing after the next, and to have this happen right when it’s finally harvest is huge,” she said.
Pearson carefully selected the seeds and genetic strains for the cannabis he planted in February on part of 400 acres he shares with 11 other farmers. He is now starting from scratch: finding new seeds and securing greenhouse space to grow the new plants. He had submitted all of his permits to become legal under the county and state’s new regulations.
“The hopes of what we could do are still the hopes of what we’re going to do,” Pearson said. “It’s just going to be a little harder to get there.”
Ashley Oldham, owner of Frost Flower Farms in Redwood Valley, California, did something very out of character: She left her cellphone at a friend’s house the day the fire reached her. A neighbor pounded on her door in the middle of the night as flames surrounded her home, saving the lives of Oldham and her 4-year-old daughter.
Oldham’s house was destroyed, but her greenhouse stayed intact, in part because she hiked through what looked like a “post-apocalyptic disaster zone” to check on her property after the fire passed. She said that emergency officials initially did not allow marijuana farmers to check on their crops, as is allowed for farmers of other agricultural products.
When she arrived at the farm, she used a neighbor’s hose to wet down a large oak tree that was ablaze, saving her greenhouse. Oldham has been okayed for a legal permit in Mendocino County, spending “a lot of money” to come fully into compliance. She estimates that she lost about 25 percent of her crop to wind damage, and much of it looks burned.
She and other cannabis farmers must have their crops extensively tested under California’s new regulations, and most people don’t know what impact smoke or burn damage will have.
“We’re totally legal,” she said of her farm. “But we’re still being treated unfairly.”
Susan Schindler, a grower in Potter Valley, California, said she has spent at least $20,000 on consultants, attorneys and fees trying to come into compliance for legal sales in January. She evacuated her home and has been at a San Francisco hotel since the fires. Her master grower told her the plants are “very crisp.”
Half of the crop was destroyed earlier this year due to russet mites, and now she thinks much of the other half will be lost to fire. Some was harvested, and she’s hoping that it will allow her to break even.
Schindler calls marijuana a “holy plant” that she’s farmed for years, selling to medical dispensaries.
“I’m not going to give up,” she said, “but it’s going to take a lot of money out of my bank account this year.”
After the smoke clears: What’s next for Northern California’s cannabis industry? The devastating and deadly wildfires in Northern California could hardly have come at a worse time for the region’s well-established and highly respected cannabis industry. Growers in the area, famous for its world-class quality cannabis, were in the midst of their autumn harvest as the wildfires tore through Sonoma, Napa and Mendocino counties — leaving in their wake a rising death toll, millions of dollars in property loss and scores of acres of scorched farmland and forests. –Report by The Cannabist’s Bruce Kennedy
Trump’s drug czar nominee withdraws after big pharma flap: Rep. Tom Marino, President Donald Trump’s nominee to be the nation’s drug czar, is withdrawing from consideration following reports he played a key role in weakening the federal government’s authority to stop companies from distributing opioids. Trump announced on Twitter Tuesday that the Republican Pennsylvania congressman “has informed me that he is withdrawing his name.” He praised Marino as “a fine man and a great congressman.” –Report by The Associated Press’ Darlene Superville and Matthew Daly
Recreational marijuana is saving lives in Colorado, study suggests: Marijuana legalization in Colorado led to a “reversal” of opiate overdose deaths in that state, according to new research published in the American Journal of Public Health. “After Colorado’s legalization of recreational cannabis sale and use, opioid-related deaths decreased more than 6% in the following 2 years,” write authors Melvin D. Livingston, Tracey E. Barnett, Chris Delcher and Alexander C. Wagenaar. The authors stress that their results are preliminary, given that their study encompasses only two years of data after the state’s first recreational marijuana shops opened in 2014. –Report by The Washington Post’s Christopher Ingraham
Soft on crime? Candidate advocates use of drug-sniffing bunnies: A Philadelphia-area mayoral candidate says he was serious when he vowed to investigate the use of drug-sniffing bunnies if elected — even though it appears to stem from an internet hoax. The Philadelphia Inquirer reports Republican nominee Dave Gautreau broached the idea Thursday at a Phoenixville mayoral forum. –Report by The Associated Press
In testimony before the Senate Judiciary Committee on Wednesday morning, U.S. Attorney General Jeff Sessions said there should be “more competition” among growers who supply marijuana for federal research, though he said he thought the current applicant pool of 26 was too many.
“Can you clarify the position of the Justice Department regarding these applications?” Hatch asked the head of the DOJ.
“We have a marijuana research system working now. There is one supplier of the marijuana for that research. People have asked that there be multiple sources of the marijuana for medicinal research and have asked that it be approved. I believe there are now 26 applications for approval of suppliers who would provide marijuana for medicinal research. Each one of those has to be supervised by the DEA, and I have raised questions about how many and let’s be sure we’re doing this in the right way because it costs a lot of money to supervise these [indecipherable]. I think it would be healthy to have some more competition in the supply but I’m sure we don’t need 26 new suppliers.”
Sessions was representing the Justice Department during an oversight hearing. He has been asked to speak to the Trump administration about DOJ policies on drugs, crime, terrorism, immigration and other topics. The hearing is the Senate Judiciary Committee’s first opportunity to quiz Sessions since his confirmation hearing.
The hearing is still ongoing and this story will be updated.
Polly joined The Cannabist in December 2016 as a digital producer. She has been creating print, web and video content for a couple of decades. She returned to her home town of Denver in 2012 after living in eleven other cities in four countries, and…
Cannabis Industry Experts Share Advice on Successful Career Transitioning
“Can you give me any advice on how to transition to the Cannabis Industry?”
This is the question I get asked most.
Let me start by saying that opportunities in the cannabis Industry are vast and the numbers are enticing. Entrepreneur Magazinesays that 283,000 Cannabis Industry Jobs will be created by 2020 and New Frontier Data expects the Cannabis Industry to be a $24 Billion industry by that same year. Enticing indeed.
Reaching out to the real experts for advice.
I have been living in Denver, Colorado for more than 10 years and have been active in the cannabis space from the beginning. I have had the opportunity and honor to connect with hundreds of men and women and businesses proudly active in the cannabis space both directly and through my cannabis industry networking platform. To get the best answers to the question I contacted the experts I know and respect. This is what I found:
Openly embrace Cannabis Legalization.
You can’t walk between the raindrops of legal cannabis. Fully embrace it to friends, family, Facebook and all your networking platforms. If you want a piece of the multibillion dollar cannabis pie you are going to have to get wet.
Most likely the person standing between you and opportunity is a cannabis industry pioneer or works for one. Keep in mind that she or he risked money, reputation and jail time to get where they are now and their sacrifice and relentless advocacy gave us the opportunities we have now in this new industry. If they even smell a hint of apathy toward cannabis legalization you’re finished.
I tell these folks to start by going to a local dispensary. 99 times out of 100 they will find the dispensary staff to be nothing short of professional. They will be versed about their products, respect your level of knowledge and have the patience to educate you. Buy something and try it; know the product!
Recognize Cannabis Businesses as “for profit” endeavors.
Cannabis businesses are highly regulated, over taxed, wrought with excessive governmental fees and live under the yoke of constantly increasing compliance rules. Every business pays and every business pays the same. All this is happening as cannabis pricescontinue to fall.
Now more than ever cannabis business owners need production efficiency, loss prevention, branding, marketing, increased sales volume, cost reduction and more. Do you have the skills to help?
This recruiter uses the word “love”.
I also reached out to Robin Ann Morris who is the owner of Mary Jane Agency, Ohio’s first cannabis employment agency, to get her take on the question. Morris advises her clients to, “Take what you love doing and apply it to the cannabis industry. Everything you are doing now is going to have to be done in the cannabis industry.”
“Take what you love doing and apply it to the cannabis industry?” That’s maybe the best advice of all.
Author Bio:James Kaufman is the founder and editor of the Cannabis Associates Network. James holds a B.S. in Journalism from the University of Colorado at Boulder and currently resides in Denver, Colorado.
Cannabidiol is a non-psychoactive cannabis compound touted for its medicinal promise — but marijuana- and hemp-derived extracts rich in CBD and low in intoxicating THC are facing a future yet to be determined.
The Cannabist’s special report “CBD, TBD” explores the issues with CBD — federal-state conflicts, national drug policy, pioneering research efforts and the paths toward the compound’s full legalization. This is the sixth installment in an ongoing series. Coming soon: A look at CBD’s path forward with hemp products.
This time next year, an investigational drug hailed as a breakthrough in the science of cannabidiol could be prescribed to children suffering from treatment-resistant epilepsy.
The prospect of its success, however, has caused some unease in the American hemp industry.
The company is expected to wrap up its New Drug Application to the FDA in the coming weeks; the federal agency could conduct its Good Manufacturing Practices (GMP) inspection by June.
If the FDA were to give its blessing to that application, Epidiolex could be readied for commercial sale on the prescription drug market by this time next year, GW officials told The Cannabist.
Cannabis advocates and purveyors of hemp-derived, CBD-rich extracts fear FDA approval of Epidiolex could lead to a pharmaceutical commandeering of promising cannabis compounds.
The company and some prominent members of the medical community, however, trumpet the attempt to harness CBD’s potential and package it into a medicine that conveys the safety, consistency and clarity that FDA approval affords.
“I can’t tell you how happy I was to see those three letters (GMP) in relation to cannabidiol,” Dr. Amy R. Brooks-Kayal, chief of pediatric neurology at Children’s Hospital Colorado, said earlier this year.
She was speaking in Denver at the annual meeting of the Teratology Society, which focuses on birth defects and pediatric health issues. During a symposium on Marijuana and Child Development, Brooks-Kayal spoke to the topic of cannabinoids for the treatment of pediatric epilepsy.
Some of those children would end up in the intensive care unit, Brooks-Kayal said.
Children’s Hospital Colorado does not prescribe or recommend medical cannabis products; however, Brooks-Kayal implores parents to let doctors know if they’ve given their child CBD or another form of medical cannabis — and to not stop the other medications cold-turkey.
GW’s efforts might not be the end-all, be-all solution for these hard-to-treat epilepsy conditions, but to have products put through rigorous testing, trials and regulations are steps in the right direction, Brooks-Kayal said.
GW expressed confidence that CBD is medicine and that the pharmaceutical approval was the appropriate path, despite the fact that extracts rich in the compound are already widely available in dispensaries — and online — in states that have legalized forms of medical cannabis.
“I think physicians, and I think patients, prefer to have a drug that’s been through that very stringent process,” said Steve Schultz, GW’s vice president of investor relations.
Accompanying the first-to-market designation, the hallmarks of the FDA approval process — potential for insurance coverage, directions on dosing, information about drug interactions, quality assurance, and other checks and balances — are important differentiators for GW as the company sets off to carve a niche for itself in cannabinoid drug development, Schultz said.
“You don’t ever get that kind of instruction with a dispensary-based product,” he said.
Some producers are cautiously optimistic, taking the proverbial wait-and-see approach, while others have begun taking precautions such as changing labels and branding to highlight their products as “whole plant hemp extracts” as opposed to “CBD oil.”
Executives at GB Sciences Inc., a Las Vegas firm aiming to develop and patent several pharmaceutical-grade cannabinoid therapies, have extensively evaluated the potential regulatory issues that Epidiolex could raise, said Andrea L. Small-Howard, the company’s chief science officer.
In the event Epidiolex is approved, Small-Howard anticipates the FDA pathway to widen for the creation and testing of novel CBD formulations. At the same time, it would significantly disrupt the market for CBD products sold in dispensaries or online under state-regulated cannabis regimes, she said.
“These (state marijuana) programs are already in violation of federal law, therefore, an Epidiolex approval may push the issue of who has jurisdiction over pharmaceuticals, when CBD becomes an FDA-approved pharmaceutical ingredient,” Small-Howard said.
Others argue that consumers should have access to CBD products outside of the prescription-drug realm.
Alternatively, siloing off CBD and other cannabinoids as pharmaceutical-only would limit the types of products available and result in them becoming more expensive, Stanley said.
There is still much to be learned about medical applications for CBD and other cannabinoids.
“It’s such a unique plant with unique abilities. I think we’re just scratching the surface on it,” said Gabriel Ettenson, general manager for Broomfield-based Elixinol, a manufacturer of CBD oils and hemp products.
Ettenson isn’t losing any sleep over GW and what may come from Epidiolex coming to market.
“There really isn’t any significant fear that I have about what may happen if GW gets approval,” he said.
Heike Newman, a senior regulatory manager at the University of Colorado’s Anschutz Medical Campus, said she is curious as to what ripple effects may come from Epidiolex making it to market.
Such an approval could ultimately trigger a federal down-scheduling of CBD, reducing the barriers to research for Newman’s colleagues, she speculated. Research on cannabis has been hampered by its designation as a Schedule I controlled substance.
“I think they’re showing that CBD has actually a medicinal benefit, and I think that’s huge,” she said.
Epidiolex hurdles include potential expense
For all the excitement and consternation swirling around Epidiolex, the drug’s approval is not a slam dunk, said Ken Trbovich, an analyst for financial services firm Janney Montgomery Scott LLC who follows GW.
Patients in GW’s study already were taking various anti-epileptic drugs, including Onfi (clobazam), an effective treatment for Lennox Gastaut Syndrome, Trbovich said. And there’s a correlation between the plasma levels of clobazam and the effectiveness of the drug, he added.
“In other words, the higher the dose, the higher the response,” Trbovich wrote via email to The Cannabist. “There is a drug-drug interaction such that treating a patient with Epidiolex increases the plasma level of clobazam and its active metabolite.
“Thus, it is unclear how much of the treatment benefit resulted from the increased plasma levels of clobazam as opposed to the independent response to Epidiolex.”
Then, late last week, word came that Zogenix, an Emeryville, Calif.-based pharmaceutical firm’s non-CBD drug showed positive data in late-stage clinical trials of patients with Dravet. The announcement sent GW’s stock tumbling and created additional questions for Trbovich.
“The strength of this data should cause investors to reconsider the relative efficacy of Epidiolex and the implications this has for its commercial success in Dravet, LGS and other epilepsy indications,” he wrote in a Sept. 29 report to investors.
To this point, consensus estimates pegged Epidiolex as a $1 billion drug by 2021, Reuters has reported, citing forecasts from Thomson Reuters Cortellis.
Outside of the lab, GW is effectively “cooking with gas,” considering the prevalent industry of hemp-derived CBD extracts, he added.
“There is no other orphan drug, or orphan biologic, of which I am aware, that a patient has the option of going down to a vitamin store or local pharmacy and buying an over-the-counter alternative,” he said. “While GW (scientists) have been great pioneers in conducting the scientific research to prove CBD has some effect in well-controlled clinical studies, CBD oils are available in the overwhelming majority of states.”
Trbovich expects GW will charge a hefty price — some analysts have projected in the range of $35,000 to $50,000 per patient per year — for Epidiolex, resulting in insurers restricting the drug to those who have Dravet or Lennox Gastaut.
Even those who receive coverage, depending on the nature of their co-pays/co-insurance, may find the cost of Epidiolex to be too high and opt instead for CBD oil from a dispensary,” he said.
Schultz, in his interviews with The Cannabist, declined to provide an estimated cost for Epidiolex. He reiterated that GW expects the medicine will be covered by insurance — not an option for products sold online, in health stores or dispensaries.
Trbovich, as of his Aug. 8 research report, has a “sell” rating on GW.
A “David and Goliath” battle, or not so much?
Schultz also shakes off the notion that GW’s progress with cannabinoid drug development are a means to keep CBD under lock and key from the masses or to cash in on a plant that should be available to all.
“GW Pharmaceuticals is not Big Pharma,” he said.
GW (Nasdaq: GWPH) employs a staff of about 200, generates $10 million in annual revenue and has a market value of roughly $2.8 billion. Its stock closed at $114.54 on Thursday and has been trading in the range of $92.65 and $137.88 during the past year.
Comparatively, companies such as Johnson & Johnson, Pfizer and Roche each employ more than 90,000 people, bring in north of $50 billion in revenue each year and boast market caps with dollar values of the hundreds of billions.
GW may be a smaller player when sized up against the pharmaceutical giants, but it’s considered a behemoth by cannabis industry advocates who classify the juxtaposition as a “David and Goliath” battle.
GW is not trying to monopolize the market but rather aiming to ensure that patients can have access to medicine that is rigorously tested and approved, Schultz countered.
The state law changes are one part of a two-step process, Schultz said. The company would need to have Epidiolex rescheduled by the DEA — the company is hoping for a Schedule IV designation — and state rescheduling to ensure that patients have access for a prescription, he said.
“Where it requires legislative actions, we want to make sure we’re out in front of that and taking action as soon as possible,” he said, noting that the company is in a “mode of understanding” to learn about each state’s requirements and responding to those rules in advance of Epidiolex’s expected launch.
Schultz disputed claims that GW — with the might of the FDA at its side — would run the tables and stamp out sellers of CBD-rich oils. His firm, rather, aims to provide a compelling new addition to the market as a whole.
It’s ultimately up to the patients and the physicians to decide what works best for them, he said.
“Our objective, simply, is to make an FDA-approved medicine, purified CBD medicine available for patients who would be looking at an additional option,” he said. “Whatever is available at dispensaries is really not even an element of our consideration. Our goal is to just add to those options that are available.”
Alicia Wallace joined The Cannabist in July 2016, covering national marijuana policy and business. In her 14 years as a business news reporter, her coverage has spanned topics such as the economy, natural foods, airlines, biotech, retail,…