Business
How Many Billions Will Big Pharma Lose If Cannabis Gets Legalized?
This is the first study to ever assess the impact of marijuana on the pharmaceutical industry, regardless of patient or product type.
Each time a single person chooses to medicate with marijuana products instead of pharmaceutical drugs, it’s one big step for the legal cannabis industry and dollars lost for Big Pharma.
Ever since cannabis legalization began to take traction in the United States, Big Pharma has felt the looming threat. Slowly, biotech firms began to develop not just in the US but abroad as well, focusing on how to utilize the health benefits of the cannabis plant and translate it into safe, effective medicine that has successfully treated many conditions with no side effects — something Big Pharma has failed at doing. To add insult to injury, cannabis has also been effective at treating the opioid epidemic which is caused by medications developed by them.
Now, a new study has found that Big Pharma loses billions of dollars when states legalize marijuana. The peer-reviewed study, entitled “US Cannabis Laws Projected To Cost Generic And Brand Pharmaceutical Firms Billions”, analyzed how publicly traded pharmaceutical firms fared after adult-use or medical marijuana laws were enacted by states. According to Ziemowit Bednarek, California Polytechnic State University’s Finance Department, together with Sarah Stith, pharmaceutical stocks were worth 1.5-2% lower in only 10 days following cannabis legalization.
It solidifies other studies demonstrating how access to legal marijuana reduces consumption of fatal and addictive opioids. However, this is also the first study to ever assess the impact of marijuana on the pharmaceutical industry, regardless of patient or product type.
The study’s authors also predicted an 11% drop in pharmaceutical sales if cannabis were ever federally legal, which would cost them billions. They also acknowledge the fact that people are substituting marijuana for conventional drugs even if the industry is still working on dosage guidelines, coverage from health insurance, and standardization issues.
“Currently, cannabis patients and their providers have little information to guide them towards the most effective treatment for their condition. The future of cannabis medicine lies in understanding the prevalence and effects of the plants’ components beyond THC and CBD and identifying ways to categorize cannabis by measurable characteristics that are known to yield specific effects,” explains Stith. She also goes on to explain that in their findings, branded pharmaceutical drug companies were affected more than generic firms, likely because of the competitive impact.
The authors concluded by saying that pharmaceutical manufacturers can benefit from this by investing in the cannabis landscape instead of fighting them.
If You Can’t Beat Them, Join Them
There have been numerous cases of Big Pharma lobbying against the cannabis industry. One of the most notorious cases was that of Insys Therapeutics, a firm based out of Arizona, who was found to have spent $500,000 to a group called Arizonans for Responsible Drug Policy, which was established to try and fight Proposition 205 back in 2016. Prop 205 was the voter initiative that legalized marijuana in Arizona.
It’s no surprise why: Insys Therapeutics back then was responsible for just one product: Subsys, a sublingual spray made out of fentanyl, an extremely strong opioid that has taken thousands of lives. “Insys Therapeutics made $62 million in net revenue on Subsys fentanyl sales in the first quarter of this year, representing 100 percent of the companies earnings,” reported The Washington Post.
More recently, a group called the Community Anti-Drug Coalitions of America (CADA), which has made it their mission to advocate against the federal legalization of cannabis, shut down a page on their website where they listed their partners. One of them is Pfizer, a large global pharmaceutical firm.
What makes it ironic is that in 2021, Pfizer inked a joint deal with Arena Pharmaceuticals Inc., a biotech firm that has dedicated a segment of their medications to developing cannabinoid drugs. Arena is focused on developing drugs that target the cannabinoid receptors to treat pain caused by gastrointestinal conditions. Even if Pfizer is not directly in the business of touching the plant, it doesn’t change the fact that they are trying to make money from it.
At the end of the day, Big Pharma really is in a much better position to support cannabis instead of fight back. There’s simply no competition with marijuana – a natural, affordable plant that contains hundreds of compounds, affecting people differently yet with minimal, if any, side effects. Unlike pharmaceutical medications that come with a range of undesirable side effects if they even do work on patients.
Marijuana is one plant that can be used to treat dozens of conditions: chronic pain, anxiety, insomnia, Parkinson’s disease, cancer, depression, epilepsy, and so much more. Pharmaceutical medications have tried in vain to develop drugs that would treat these same conditions, and while they worked for some, many did not find relief. Instead, patients were left broke and unable to afford expensive treatments and medications. Whereas cannabis simply works. It’s extremely powerful and that’s why pharmaceutical corporations are afraid, feeling threatened.
So threatened, in fact, that Big Pharma has been trying to copy various cannabinoids by taking advantage of its federally illegal status and instead developing synthetic cannabinoids that they can profit from. In doing so, they also control the price and release of cannabinoids. Large pharmaceutical conglomerates need to stay afloat somehow, so they must innovate and do what they can in the meantime.
But the cannabis industry has got to keep on fighting back. Let’s not lose hope that the government will finally change the federal status of marijuana in the near future.
Source: https://thefreshtoast.com/news/how-many-billions-will-big-pharma-lose-if-cannabis-gets-legalized/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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