INTERPHEX 2016: Once-Tabooed Botanicals Gain International Acceptance

The changing medical cannabis industry in the United States and Canada.

With approximately 58 percent of Americans now supporting cannabis legalization and the market currently valued at $3 billion, many pharmaceutical companies are beginning to seriously consider the potential economic and medicinal benefits of this once-banned botanical.¹ According to Medical Marijuana Inc., 23 states in the U.S. have already legalized medical marijuana, with many more pending legislation.

“It’s a completely different world today than it was even six months or a year ago,” said Leslie Bocskor, Managing Partner and Founder of Electrum Partners, an advisory firm to start-up companies in the nascent cannabis industry in the United States.

“What is holding the cannabis industry back in the United States is policy makers,” said Bocskor. “They are over-regulating and are making it difficult for patients to get medications.”

According to Bocskor, the United States is leading the world in establishing regulated markets—creating a framework for others to follow. In the states that have legalized marijuana, legislatures are tackling issues such as packaging protocols and black market concerns head on. By leading the way, other international jurisdictions can learn from and improve upon what the U.S. has done.

“There’s so much talk about the development of therapies based on the cannabis plant—how it helps with seizure disorders and PTSD,” said Bocskor. “These therapies are now in the stages of being developed.”

Medical Cannabis vs. Nutraceuticals & Pharmaceutical Products

Medical marijuana, according to Bocskor, is similar to nutraceuticals and pharmaceutical products but is like neither:

It is very functional, unlike nutraceuticals
It is different from pharmaceutical products because it has not been studied like most pharmaceutical products
Because it is a plant-based therapy that grows like a weed, it is easy to cultivate and process
It is accessible, available in different ways, and puts more control in patient’s hands

Forming Roots in the Cannabis Industry

When it comes to launching into the cannabis industry, Bocskor said that the greatest struggle among the majority of the companies he works with comes from the capital formation process, which is largely due to the changing regulatory environments from state to state.

“If you’re going to be in the legal cannabis industry, it is completely different in each of the jurisdictions,” said Bocskor. “If you are not getting the right information and don’t know what’s going on, you’re going to be heading towards failure.

“If you know the market, it opens up a world of possibility for you.”

Companies looking to enter the cannabis market often face a series of questions:

What state should they launch the company in?
How do they get the capital to start the company?
What is the best way to form a company?
How do they find partners?
How do they find people to help them with regulatory concerns from state to state?
How do they go about finding investors? (Particularly when cannabis is still federally illegal.)

“We work with them on their overarching strategy and make modifications to the strategy that we think will help them succeed in an expedited fashion,” Bocskor explained.

Don’t be ready for the market as it is today, but for as it will be tomorrow, said Bocskor.

“If you want to be in the industry, reach out to people in the industry,” he said, “because if you’re not knowledgeable, you’re never going to get in it.”

Some of the disease states that medical cannabis has the potential to significantly impact, according to Bocskor, include, but are not limited to:

Pain management
Seizure disorders
PTSD
Brain trauma
Managing type 2 diabetes

Then vs. Now

“Seven or eight years ago, marijuana was a very taboo subject,” said Evan Nison, Co-Founder and Director of the NY Cannabis Alliance. “The majority of Americans support taxing and regulating the cannabis industry.”

According to one poll by Gallup, American’s support for legal marijuana has grown steadily over time: from 34 percent supporting marijuana legalization in 2001 to 58 percent in 2015.²

“I think medical marijuana is going to become very industrialized in the pharmaceutical industry and will be nearly indistinguishable from other medications that we consume now on a daily basis,” said Nison. “I also see hemp becoming a major industry by creating biodegradable plastics, rope, cloth, clothing, cars, concrete—it’s a sustainable, environmentally-friendly alternative to a lot of materials that we are currently using.”

But the U.S. isn’t the only country making headway into the cannabis industry.

Canada’s Underground Cannabis Economy

“Canada has a thriving underground cannabis economy,” said Neil Belot, Chief Brand Officer of Aurora, a medical marijuana producer and distributor. “Five years ago, there was little legal ‘industry’ to speak of aside from some licensed personal/caregiver production and one commercial supply option through a single government contractor.”

Although the prohibition currently stands in Canada, Justin Trudeau, Prime Minister of Canada, has announced the government’s intent to legalize cannabis.

“Since the introduction of the Marihuana for Medical Purposes Regulations (MMPR) in 2014, we’ve seen enormous industry growth as Canada has become the world leader in the cultivation and distribution of federally-regulated, pharmaceutical-grade medical cannabis,” said Belot. “Our federal government has set the bar very high for new entrants by entrusting only highly secure, science-driven, responsible, capital-intensive businesses to provide access for patients in need.”

According to Belot, there are about two-dozen firms in the space today.

“The future of cannabis in Canada may possibly include a combination of personal gardens, mail-order, private and/or government retail, as well as pharmacy distribution. We’ll soon see broader medical cost-coverage and innovations in standardized and personalized dosage forms,” said Belot.

Belot believes that legalization is certainly ‘within reach.’

Accessibility of Medical Cannabis in Canada

“In terms of the medical industry, we still have a lot of work to do in facilitating physician access to unbiased, evidence-based information on cannabis and cannabinoid therapies,” said Belot.

As it stands now, physicians are the gatekeepers; and while the number of doctors authorizing patients for use is steadily increasing, the overall percentage of participation remains relatively low—making it difficult for patients to access treatments derived from cannabis.

“As medical cannabis producers, we’re limited by the scope and potency of the types of cannabis-derivative products that can be provided to patients,” Belot explained. “The medical cannabis community and many healthcare practitioners are asking for a wider range of products from producers. The Supreme Court of Canada recently ruled in favor of patient’s right to possess them. I expect licensed producers, patients, and communities will be better served in the future as a wider range of derivative products become available for distribution.”

The regulatory standards under which licensed producers operate in Canada are some of the highest in the world, said Belot. Canada is the first G7 country to begin the undertaking of creating a cohesive, regulated, federally-legal commercial system for medical cannabis.

The Future of Pharmaceutical Cannabis

The future of the pharmaceutical cannabis will likely focus on derivative products, according to Belot, including infused products, lotions, tinctures, oils, capsules, suppositories, and devices like pressurized metered dose inhalers.

“It is possible that healthcare practitioners of the future will have a range of products to choose from,” said Belot. “People may commonly use cannabis-derived products created with standardized doses of personalized synergistic cannabinoid and terpenoid profiles designed to have a range of well understood therapeutic effects to treat specific ailments.”

According to a poll by The New England Journal of Medicine, 76 percent of clinicians worldwide believe that the medicinal benefits of cannabis outweigh the risks and potential harms.³

“We believe there is a bright future for this industry,” said Belot. “We must respect where we have come from and acknowledge those who have helped bring us here in order to reach the greatest possible future together.”

Leslie Bocskor, Managing Partner and Founder of Electrum Partners, and Pamela Johnston, Director at Electrum Partners, participated in the INTERPHEX Live panel discussion, titled “Medicine Authenticity: From Seed to Solution with Leaps in Cannabis Progress,” on April 26 from 3:45–4:30 pm at the Crystal Palace (CP-2) in the Javits Center in New York City.

References

Medical Marijuana Inc. “Industry Overview.” http://medicalmarijuanainc.com/about/industry-overview/
Jeffrey M. Jones. “In U.S., 58% Back Legal Marijuana Use.” Gallup. October 21, 2015. http://www.gallup.com/poll/186260/back-legal-marijuana.aspx
Jonathan N. Adler, M.D., and James A. Colbert, M.D. “Medicinal Use of Marijuana — Polling Results.” N Engl J Med 2013; 368:e30 May 30, 2013DOI: 10.1056/NEJMclde1305159.