CBD Offers Opportunities and Risks for the Cannabis Community

Reefer Madness prohibitionists have made numerous ridiculous statements over the years, including the contention that cannabis isn’t medicine, but that cannabis compounds are. While ranting about today’s marijuana, with THC levels over 20%, being so much stronger than that smoked during the Woodstock era, anti-legalization zealots have pushed the synthetic THC drug Marinol on patients, which is 100% THC. Now, with GW Pharmaceuticals likely getting approval for its CBD-based Epidiolex, prohibitionists are hoping that Big Pharma can corner the medical cannabis market.

While it is great that patients in states without medical laws should soon get relief, we cannot let the pharmaceutical industry snuff out medical cannabis programs across the nation. As New Frontier Data notes, CBD products offer both opportunities and risks for the cannabis community:

A particularly prominent development is the diversity of hemp-based CBD products made from high-CBD, low-THC hemp. With the pending 2018 Farm Bill under consideration by Congress this month, legalization is currently inconsistent nationwide, but it has the backing of Senate Majority Leader Mitch McConnell (R-Ky.).

Yet, perhaps of greater significance to investors is that on June 25, the FDA approved London-based GW Pharmaceuticals PLC- ADR GWPH 0.38% Epidiolex. The drug contains CBD as its active ingredient and used to treat two forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients ages 2 years and older. As some welcome it as a victory for medical cannabis, it may yet prove to further muddy the question of legality for CBD. Per the Federal Food, Drug and Cosmetic Act, the FDA considers any product for human consumption containing the active ingredient of an FDA-approved pharmaceutical drug as “adulterated and misbranded,” thus possibly representing a loophole for Big Pharma to take over the CBD market — and medical cannabis at large — nationwide. GW Pharmaceuticals reportedly holds about 100 patents around the medical efficacy of cannabis from CBD extraction processes, to placebos, to dispensing mechanisms, and a range of cannabinoid-based drug formulas to treat dozens of conditions and illnesses.

***

In Canada, as New Frontier Data’s recently acquired Hemp Business Journal predicted in its State of Hemp 2015 report, the CBD market is booming under Justin Trudeau’s cannabis-friendly leadership. M&A activity has been concentrated among Canadian public companies (trading on the TSX, CSE and/or OTC) doing investment and acquisition deals with hemp companies. Overall, access to capital and a better regulatory environment in Canada have played into the stimulated investor activity. Three of the largest Canadian LPs, Canopy Growth Corp. CGC 0.92% Aphria Inc. APHQF 1.15%, and Aurora Cannabis ACBFF 1.98%, have all made hemp-related deals in the past year, and demonstrate how hemp and cannabis markets can successfully mingle.

The mainstreaming of CBD provides entrepreneurs a chance to market a beneficial product to the public, who in turn, receives health benefits unknown to most of the population ten, 20 years ago. However, with just about anything worthwhile, grassroots advocates must work hard to prevent a takeover by big business interests that may seek to control the market. Regardless of the risks, the CBD industry is exploding and its continued growth could provide protection from a Big Pharma hostile takeover.

The International Cannabis Business Conference will provide insight into all things CBD at the upcoming ICBC in Portland, Oregon, this September 27th-28th. If you want to learn more about CBD or the greater cannabis industry, and network with top entrepreneurs and investors, the ICBC is the marijuana B2B event for you.