It’s high time for responsibility in the marijuana industry
It’s the Wild West in today’s budding cannabis industry, according to panelists discussing “The Highs - and Lows - of the Cannabis Economy.” It’s a business with no recognized brands, no industry leaders, no consistency of product and no federal regulations on how products containing marijuana may be marketed and sold. For investors, cannabis offers a huge potential upside—one company saw its stock price increase from a penny to 68 cents—but also huge pitfalls.
Mike Zapolin, CEO of Zappy Inc., a diversified cannabis company, calls the current situation “Cannabis 2.0.” An industry that has long been the domain of mom-and-pop operations in the shadows now needs the contributions of businesspeople, scientists, doctors and federal regulators to avoid some of the mistakes made by alcohol and tobacco companies.
Todd Denkin is one of those working to bring standardization to the industry. He is president of Digipath, Inc., a pharmaceutical pathology company that has started testing marijuana not only for THC and cannabidiol content, but also heavy metals, microbial fungus, mold and other contaminants. In addition to improving yield, profit and public safety, he said, increased testing and standardization would allow consumers to choose strains of marijuana that relieve pain without making them hungry, or help them sleep without causing mental impairment.
“Every grower tells you he’s the best because he’s got some special system or does a voodoo dance,” said Denkin. The kind of testing his company does would evaluate those claims empirically.
Sue Rusche, president and CEO of National Families in Action, Inc., suggested going a step further: putting marijuana through the Food and Drug Administration’s approval process. “What bothers me is to see products out there in Colorado and Washington where the bud tender [analogous to a bartender] says this is good for sleep or aches and pains with no scientific evidence whatsoever.”
She worried about use by minors and the incidence of drugged driving, noting that marijuana use has doubled since the advent of medical marijuana, which shifted public perception of cannabis away from its use as a “recreational” drug. She urged the industry to partner with the public health community to avoid sparking a backlash in the form of anti-marijuana campaigns similar to those against tobacco use.
Doug Praw, a partner at Goodwin Procter LLP, noted that Colorado is using the first $40 million in tax revenues from legal marijuana for school construction.
“Building schools is wonderful, but it’s not providing money for drug education, prevention or treatment,” said Rusche.
Craig Ellins, CEO and chairman of GrowBLOX Sciences, Inc. is working on standardizing the growing process. GrowBLOXes isolate individual marijuana plants in a box, preventing cross-contamination and infestation while providing each plant with appropriate amounts of light and water. Now that cannabis is on the verge of becoming a big business, he said, it is critical that it be grown under laboratory conditions.
“The genie is out of the bottle,” said Michael Kraft, chairman and cofounder of Canada’s WeedMD RX Inc. The question now is, how are states going to take responsibility?