The anti-cannabis Public Service Announcements of the 80s and 90s were not only alarmist but also laughably bad. Thankfully we live in an era where there is less fear and more understanding about cannabis and its versatile applications.

In recognition of Substance Abuse Month during the month of October, California cultivator and lifestyle brand Sparx Cannabis is releasing a series of unique public service announcement videos that parody iconic anti-cannabis PSAs from the past. The first of five videos was released last week and is a play on the famous “Marijuana Anti-Drug Dog Commercial.” The Sparx Awareness Month version is called “Marijuana Anti-Schwag Dog Commercial.”

Cannabis was once stigmatized as a ‘gateway drug’ but is now seen by many as a cornerstone of a healthy life and incorporated into wellness routines. In fact, medical cannabis laws are associated with significantly lower state-level opioid overdose mortality rates when compared to states without medical cannabis laws.

The latest video of the series released is titled, “I Learned by Watching you.” The newest installment is based on the 1987 PDFA Anti-Drug Commercial wherein a father confronts his son about a cigar box full of cannabis flower, asking his son “who taught you how to do this stuff?” to which the son reveals that he learned it from his father.

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Parents who smoke crap weed have kids who smoke crap weed. Smoke the best, smoke Sparx. #sparxawarenessmonth #everyoneeveryday #saynotomids

A post shared by Sparx Cannabis (@sparxcannabis) on Oct 8, 2019 at 8:33am PDT

In today’s age we are no longer parent-blaming when it comes to cannabis consumption, in fact, now some parents are turning toward cannabis as a stress reliever versus having a drink or using more harmful substances. According to a study, one in five marijuana users are parents and there has even been a surge in parenting-and-cannabis workshops.

As the global cannabis market continues to grow, there is a demand for unique marketing tactics to ensure cannabis brands stand out. California has the largest legal marijuana market in the world and is on track to reach $3.1 billion in sales in 2019, up from approximately $2.5 billion in 2018.

“When it comes to marketing in the cannabis industry, you have to get creative and this is exactly what we did with Sparx Awareness Month,” said Sparx Cannabis President Dr. Jared Helfant in a press release. “The PSA videos are hilarious takes on famous anti-drug commercials. These were created to not only bring attention to our high-quality Sparx Cannabis products, but to also have a lasting impact that resonates with today’s cannabis consumer.”

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Don’t let your dog catch you smoking schwag weed… it’s embarrassing. Smoke the best, smoke #sparx #sparxawarenessmonth #justsayno #saynotomids

A post shared by Sparx Cannabis (@sparxcannabis) on Oct 1, 2019 at 8:27am PDT

Dr. Helfant said the reasoning for creating Sparx Awareness Month is to bring unique and memorable originality to the brand through organic reach. In the wake of strict advertising regulations for cannabis companies, this is one of the ways the company feels will help fuel people’s interest. Through the utilization of old anti-cannabis PSAs, Sparx is also hoping their versions of the PSA commercials will help remove the age-old stigmas associated with smoking cannabis.

The remainder of the Sparx Awareness PSA videos are scheduled to be released weekly through Sparx Awareness Month:

• October 15: Sparx 51 Commercial
• October 22: Your Brain on Sparx Commercial
• October 29: Be the Sparx Commercial

All videos in the series will be hosted on multiple platforms, including YouTube, Facebook, Instagram, the Sparx Cannabis newsletter and on the Company’s website.

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As popularly reported, Merrill Lynch, the investment arm of Bank of America, recently leaked an equity report — “Medical cannabis has high POTential: a joint biotech & tools primer” — detailing a bullish outlook on the cannabis industry.

The 45-page report authored by Bank of America Merrill Lynch’s lead “Life Sciences Tools and Diagnostics” analyst, Derik De Bruin, along with several other in-house analysts, offers great news for investors, entrepreneurs and anyone with a financial stake in the legal cannabis industry.

The report is significant, as Merrill Lynch is arguably one of the most important investment firms in the country, and it is believed that this is the first report of its kind coming from a major Wall Street firm. It reveals extensive research and analysis across a diverse cross-section of areas coupled with an optimistic overall outlook of the industry.

On their view of the industry, Merrill Lynch stated:

The cannabis industry is poised for growth if cannabis legalization and use expand. As the cannabis industry expands, we expect to see a corresponding increase in cannabis medical research and the implementation of cannabis testing and labeling regulations, which should drive adoption and growth of life sciences tools within this market in our view.

Seth Yakatan, CEO of Kalytera, a company developing synthetic CBD to treat osteoporosis, Prader-Willi Syndrome and obesity, is enthusiastic Wall Street is taking note of the cannabis industry: “The cannabis industry continues to be looked to as one with enormous potential for growth, and this report’s development is a clear indicator that the trend isn’t going away. I’m very happy to hear that even large firms such as Merrill Lynch are taking notice of the industry in this light, and hope that others follow suit.”

Key findings of the report

Chris Goldstein, of Philly420 and PhillyNORML, was the first to report on the leaked version and offered key highlights of Merrill Lynch’s findings — culled from the reports analysis on three key areas: products, fields, and markets. Moreover, the report provides insights into the current and future legal status of cannabis, as legal issues surrounding cannabis will affect the industry’s bottom line.

More specifically, Merrill Lynch focused on the investment opportunities within “life science tools and diagnostics” — a sector within the industry that deals with lab analyses, testing and quality control.

Merrill is particularly bullish and enthusiastic about the “life science tools and diagnostics” sector, because in every state where cannabis is legal, state governments are becoming increasingly attentive to quality control issues, therefore mandating stricter attention to product consistency, quality and testing.

As the industry grows and matures, the role of these companies will no doubt become more and more important. By and large, before cannabis can be sold on the open market, it must be screened, tested and approved. 

Among other issues, a key safety concern is the use of pesticides, which has become a hot button issue. States are crafting stricter regulations around what kinds of pesticides may or may not be used by cultivators. While the report didn’t provide specific details on individual testing labs, Merrill Lynch reported that they are bullish on the sector, which they describe as “highly fragmented and rapidly evolving.”

Matt Karnes, managing partner of GreenWave Advisors — an independent New York City-based advisory and research firm whose research was cited on page 39 of Merrill’s revised report — concurs with the findings of the report: “The [Bank America Merrill Lynch] report underscores GreenWave Advisors thesis on the industry and in particular ‘lab testing’, a subset of the sector that we believe is emerging yet presents some challenges, specifically with respect to the inconsistency of regulatory frameworks, testing and reference standards which vary from state to state.”

Merrill Lynch believes the “life science tools and diagnostics” sector will be one of the most lucrative areas for cannabis investors to put their money. In fact, Merrill Lynch estimates that the market for testing equipment may very well grow to between $50 million and $100 million by 2020.

GreenWave Advisors, on the other hand, estimates the size of the market to reach $850 million by 2020. The reason for Green Wave Advisors higher estimates is that their forecast includes revenues from testing, consulting and other analytic services, while Merrill looks only at the companies who provide the tools and consumables. 

Key players in the industry

Merrill Lynch went on to identify who they believe are they key players who manufacture “life science tools” used to perform cannabis lab tests. The companies they identified include:

• Waters Corporation (NYSE: WAT): A $2 billion dollar Massachusetts-based company
• Agilent Technologies (NYSE: A): A $4 billion dollar Silicon Valley company based in Santa Clara, California.
• Thermo Fisher Scientific (NYSE: TMO): An $17 billion industry powerhouse based in Philadelphia

Merrill’s report also covers “pharma” companies developing “canna-pharma” products, including:

• GW Pharma (NASDAQ: GWPH)
• Insys Therapeutics (NASDAQ: INSY)
• Zynerba Pharmaceuticals (NASDAQ: ZYNE)

Unlike GW Pharma’s plant-derived products, both Insys Therapeutics and Zynerba are developing drugs with synthetic cannabinoids.

Silicon Valley + Wall Street = A bright future for legal cannabis

As the industry continues to blossom, more and more wealthy investors are drawn to legal cannabis, including prominent billionaire Silicon Valley investors such as Peter Thiel, Paypal founder and one of Silicon Valley’s most successful venture capitalists, and Mark Zuckerberg’s pal, Sean Parker, who founded Napster and was an early investor and co-founder of Facebook.

Conveniently, Sean Parker is also one of the key proponents and big-money backers behind California’s “adult-use” cannabis legalization efforts. Not only has Sean Parker been putting significant financial and intellectual capital behind advancing California’s legalization efforts, Parker has been trying to consolidate and unify California’s dizzying number of competing ballot initiatives.

Merrill Lynch’s report, and the increasing backing of high-visibility investors such as Parker and Thiel, is good news for the industry. Merrill Lynch is one of Wall Street’s biggest players; Parker and Thiel are two powerful Silicon Valley forces.

A reality check?

While this is great news for the industry, it’s not necessarily time to break open the champagne — or your favorite Kiva edible. The lack of regulatory consistency, unresolved banking issues, the evolving legal landscape and uncertain political climate continue to create barriers to achieve critical mass throughout the mainstream investment community.

GreenWave Advisors’ Matt Karnes is bullish, but cautiously optimistic, “While we believe this is a significant move for a ‘bulge bracket’ firm, one of the largest and most profitable multi-national investment banks in the world, to publish a detailed report on the industry, we do not expect Bank America Merrill Lynch — or any other major firm — to write extensively on the sector in the immediate future.”

Karnes continues, “We also don’t believe coverage of any of the ‘pure play’ cannabis companies will be considered. But rather, research efforts will be focused more on opportunities that are tangential, or ancillary to the industry, companies with the potential for significant market valuations and investor returns.”

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While most may think that money figuratively grows on trees in the cannabis industry, resolving financial woes in all aspects of the business have proved trying. Typically, all cannabis-related business only accept cash with a few exceptions, as cannabis remains federally illegal, and, therefore cannot be reported by the FDIC. With so much cash involved in these businesses, the industry has been begging for a solution and it may have just found it.

Luckily for dispensaries, consumers, and investors alike, there is a solution to this cash-heavy industry. Since we, as humans, touch our mobile phone more than 2,000 times a day, it only makes sense that an app could prove the saving grace of the cannabis industry.

Thanks to CannaCard®, funds no longer need trees from which to grow. Now, one simply needs to download the app and spend at their favorite dispensary (assuming they have added the system).

Essentially, CannaCard® functions much like the Starbucks app of the cannabis world. The CannaCard App can be downloaded for free from Google Play and Apple Store. Consumers can then load their CannaCard® through the app, at participating dispensaries, loading stations, or directly through their online/mobile account using a checking account or even a debit or credit card! The company also plans to provide consumers with loyalty rewards as well as specific menus for each dispensary before going in-store.

“We saw an extreme need for cannabis companies to be able to accept something other than cash. The CannaTrac® team knew that for consumers to adapt to the platform quickly, we would need to model the system after other existing systems,” said newly appointed CEO Thomas Gavin in an email interview. “We aim to serve the cannabis industry as the go-to cashless payment solution. The CannaCard® allows consumers and retailers benefit from the ease and safety of cashless payments.”

Currently the app can be used at a dispensary in Colorado called Kush Gardens, but the company plans on adding retail locations as quickly as possible according to a spokesperson.

We believe this is another example of the cannabis industry legitimizing by adding modern conveniences that other, more well established industry consumers enjoy. Hopefully one day we will all be purchasing our cannabis products as if it was our morning cup of joe.

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California has rolled out state licensing for cannabis businesses, and legal advisers have absorbed over 300 pages of regulations released in late November.

Los Angeles cannabis attorney Kellsi Booth got her start in the cannabis industry with the Maryland Department of Health, where she helped the Natalie M. LaPrade Medical Cannabis Commission create regulations for their medical cannabis program.

We asked Booth – who has read the rules three times over – what California cannabis businesses need to know about the detailed and comprehensive state licensing rules.

1. Local authorization is a priority

“The number one thing at this point is you need local authorization,” Booth said. There are few jurisdictions in California right now that are permitting cannabis businesses, but step one in state licensing is getting local approval.

There are two types of state licenses: A license for recreational, and an M license for medical. “Sometimes that decision is made for you. Many jurisdictions are allowing only medical commercial cannabis activity at this time. It’s possible to hold both an A and M license for the same activity at the same licensed premise – there are conditions that need to be met.”

In general, businesses will need a license for each premises where cannabis activity is conducted.

“One of the great things they’ve done is create more nuanced categories,” she said. For example, there are manufacturing license types “N” and “P” for infusing cannabis products and for packaging and labeling of manufactured products, respectively.

There’s also a Type S license for shared manufacturing facilities on the way. “Being able to collaborate will be helpful for small-scale manufacturers. Those regulations are expected from the California Department of Public Health in early 2018.”

Licenses are not transferable in the state model. “This means you want to be set up as a for-profit entity, rather than a non-profit collective or cooperative, and some will have trouble making that switch depending on their operating rules,” Booth said.

2. Some jurisdictions are tough

Major cities – Los Angeles, San Diego, and San Francisco – are leading the way for recreational cannabis, but smaller jurisdictions are mostly sticking to medical-only.

“I believe more and more jurisdictions will open up now that the state has put forth a regulatory framework. Northern California counties like Sonoma and Humboldt are also setting the standard for cultivation,” Booth said.

“Being in a jurisdiction that has granted or will soon be granting local licenses or permits is valuable,” Booth said. One of the most cannabis-friendly jurisdictions is Long Beach, where processing is faster because it follows the standard business license application process and there’s no set limit on the number of cultivation, manufacturing, distribution, and testing businesses allowed, she said.

3. Fees and taxes are shocking

For a 5,000 to 10,000 square foot indoor cultivation facility, the licensing fee is $34,910 annually – and the next level up is $77,905, plus application fees.

For retail, fees depend on estimated operational volume. For estimated volume of up to half a million, the fee is $40,000, and it increases incrementally from there. These are high barriers to entry.

Tax rates are another concern. “Because of tax code 280E, cannabis businesses can only deduct cost of goods sold from their income – there’s no built in cushion for tax purposes,” Booth said. “In other states with a similar situation, we’re seeing high state and local tax rates resulting in businesses staying in the black market instead of moving over to the legal market.”

The application and licensing fees, state tax rates, and local tax rates will add up quickly, and may prove overly burdensome.

4. Excessive concentration rules can be a deal-breaker

“At the state level, if you meet all requirements, they can still deny you if there is an excessive concentration of retail or microbusiness licenses in the area.”

“That means the ratio of licensees to population within the census tract or division exceeds the ratio of licensees to the population within the county in the area where the premises is located. This definition may be problematic in some parts of the state,” Booth said.

5. Volatile/Non-volatile extraction rules are more lenient

When it comes to extractions, the regulations have been expanded, she said. “You can do extractions with ethanol and not be considered volatile. Volatile licensing is a more difficult process – you need a closed loop extraction system with the stamp of approval from a certified engineer, and fire department permits.”

In common practices using ethanol or carbon dioxide in extraction, businesses are able to be considered non-volatile, she said. “Jurisdictions are much more accepting of non-volatile licenses due to horror stories of people blowing themselves up during volatile extraction.”

6. Seed-to-sale requirements are specific

A key change involves seed-to-sale tracking rules. All cannabis activity must be entered into the state’s track-and-trace compliance system, and activities must occur in a particular order. “Manufactured cannabis products have to be packaged and labeled to state standards before they leave the hands of a manufacturer. Retail outlets cannot do any packaging or labeling,” Booth said.

This is a different from the practice of allowing customers to open, smell and handle cannabis products prior to purchase. “That won’t be happening.”

The retailer can have “samples” of cannabis goods that are removed from their packaging and placed in containers to allow for customer inspection. However, cannabis goods removed from their packaging for display cannot then be sold or consumed, she said.

7. Delivery services rules remain murky

“The original legislation did not cater to delivery services. Now, it’s okay to do deliveries if you have a retail license, but it’s really hard to get a retail license.”

In San Diego, there are 200 delivery services and only around 11 retail licensees currently in operation, Booth said. “Not many jurisdictions have the framework for non-storefront retail licenses for deliveries and it’s very hard to get retail,” she said. “Businesses are allowed to use apps for deliveries, but all deliveries have to be carried out from your premises by your employees. So there’s no Uber delivery scenario.”

8. Small business barrier to entry concerns remain

Cannabis industry members voiced concerns that the new licensing fees will create a barrier of entry that gives big business an advantage.

“I can’t disagree,” Booth said. “Licensing fees are very burdensome, but they have contemplated this with the scaled fees. You’re also not going to see one entity monopolizing the market. For example, an entity can hold one medium cultivation license, not five. The fee-less temporary licensing process will incentivize small operators who know cannabis to stay in the legal market.”

In Los Angeles, the social equity program is designed to ensure equal access to the market to minorities, who have traditionally been targeted for cannabis-related prosecution. “It gives priority in processing of licenses – their applications will get through the process first,” Booth said.

Don’t worry – The transition period is allowed through July 1

The regulators have created a transition period with more lax rules, so existing businesses will have until July 1, 2018 to meet the new regulations in full. “To support the transition of the market, you’ll be allowed to adjust by repackaging or labeling items currently held in inventory or conducting business with either M or A licensees, for example.”

To jumpstart the licensing, temporary licensing are available. “If you can show that you have local authorization and are meeting all business formalities, the temporary license should be granted. It’s good for 120 days, and can be renewed for 90 days thereafter if you’ve submitted an application for annual licensing.” All forms are available here.

In Los Angeles, existing businesses allowed by Proposition D will be first in line for licenses, Booth said. “You’ll be in good condition if you’re in compliance with the local law.”

Get an adviser to sidestep challenges

Booth said it’s in the best interest of every business to retain legal counsel or a compliance adviser to navigate the extensive regulations.

Make sure to vet them, too – “Be wary of people saying they’re experts in cannabis and check their background, especially criminal defense lawyers branding themselves as cannabis attorneys. I can tell you criminal defense is very different,” she said.

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South Carolina-based Palmetto Harmony is pushing forward cannabis advertising by running the first commercial for cannabis-based products to appear on nationally syndicated networks. The commercial is airing on 12 national networks including CBS, ABC, NBC, Oxygen, Lifetime Movies, and BBC-America.

Palmetto Harmony offers a range of CBD oil and cannabis-based products, which the commercial promotes as wellness products. The commercial, airing in 71 different cities, contains no specific mention of CBD oil or cannabis.

Janel Ralph, CEO of Palmetto Harmony, said the response has been “crazy, with a lot of positive feedback.”

“We had to be very careful in how we presented the products,” Ralph said. “Just like with the rules for pharmaceutical ads, there were certain things we couldn’t say and we had to be conservative.”

So far, she said the company hasn’t received any backlash or negative feedback. Her company plans to run a holiday-themed ad on 42 national channels starting December 1.

Ralph said she hopes the commercial opens the door to advertising for the cannabis industry. “We all have to be very careful in how we present ourselves. Hemp is not yet regulated by the FDA as a food or dietary supplement, which is the end goal. We can’t go making any medical claims,” Ralph said.

Palmetto Harmony TV Commercial from DCP Media Production LLC.

As competition heats up with legalization, U.S. cannabis businesses must determine how to stand out while advertising is still legally restricted in TV, radio, print, email marketing, and direct mailers.

In September, Las Vegas-based Allegiant Air became the first U.S.-based air carrier to accept advertising from a cannabis dispensary, the LA Times reported.

Acres Cannabis, a marijuana dispensary located a few blocks off of the Las Vegas strip, ran ads in Allegiant Air’s in-flight magazine, Sunseeker.

While airline-based ads show potential, ground transportation is taking a step back. In San Francisco, the public transit board voted to ban marijuana advertising on its buses, trains and shelters.

Earlier this month, Los Angeles agency Sandwich Video aimed to go viral with an online-only SNL-style video for Briteside, a cannabis delivery service in Oregon.

The video, hosted on YouTube and Briteside’s website, was created in the style of a typical pharmaceutical industry ad. AdWeek reported that the “90-second video, like SNL skits that have come before it, mimics now-infamous pharma ads in its look, tone and voiceover.” The ad shows a 30-something woman treating her anxiety with cannabis.

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Between Christmas movie reruns, TV viewers might see a commercial for this new stocking stuffer: a cannabis product sampler pack.

Christmas-themed commercials for CBD oil and cannabis-based wellness supplements are now running on over 40 network channels, in 24 countries.

Major networks airing the commercials for Palmetto Harmony products from Dec. 18 through Jan. 14 include Fox News, Fox Business, Bloomberg, MSNBC, CNBC, Headline News CNN, Weather Channel, HGTV, Hallmark, DIY, Food Network, Travel Channel and more.

It’s the first time Time Warner Cable has approved cannabis product ads to appear on its channels.

“This holiday season, fill your loved ones’ stockings with our sample pack of all natural, organically grown wellness products,” the ad’s voiceover says. While the ad doesn’t mention cannabis specifically, it depicts Palmetto Harmony’s line of hemp and cannabinoid vape oils and topical creams.

Christmas Ver 2 from DCP Media Production LLC on Vimeo.

In November, South Carolina-based Palmetto Harmony pushed cannabis advertising forward by running the first commercial for cannabis-based products to appear on nationally syndicated networks. The commercial  aired on 12 national networks including CBS, ABC, NBC, Oxygen, Lifetime Movies, and BBC-America.

Palmetto Harmony offers a range of CBD oil and cannabis-based products, which the commercial promotes as wellness products. The original commercial, which aired in 71 different cities, contains no specific mention of CBD oil or cannabis.

Janel Ralph, CEO of Palmetto Harmony, said the response to the original commercial was “crazy, with a lot of positive feedback.”

As competition heats up with legalization, U.S. cannabis businesses must determine how to stand out while advertising is still legally restricted in TV, radio, print, email marketing, and direct mailers.

“We had to be very careful in how we presented the products,” Ralph said. “Just like with the rules for pharmaceutical ads, there were certain things we couldn’t say and we had to be conservative.”

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Beer companies are looking for ways to edge in on the green rush before the legal cannabis market gets too competitive.

American-based Constellation Brands, the firm behind major beer brands Corona and Modelo, announced it purchased a 10 percent stake in Canadian cannabis giant Canopy Growth Corporation. The $190 million acquisition prepares the company to market cannabis drinks in Canada after recreational adult-use cannabis legalization.

Rob Sands, Constellation CEO, said “We’re obviously trying to get first-mover advantage” as the company anticipates federal legalization in the U.S., according to the Wall Street Journal.

At a recent National Beer Wholesalers Association meeting, AdAge reports that Heineken USA CEO Ronald den Elzen mentioned the potential for cannabis to compete with the beer market, saying “Wine and spirits are not sitting still and marijuana is being legalized in many states across the country. We have to act now and we have to do it together.”

A a recent market research study from Ameri Research Inc. estimated that the global cannabis market will surge from $14.3 billion in 2016 to an estimated $63.5 billion by 2024. “In the U.S., the tax revenues of legal marijuana are now comparable with other commodities such as draft beer,” the report stated.

In California, cannabis business owners are already preparing for soon-to-come recreational cannabis tourism by planning for cannabis-infused drinks at social clubs, adjacent bars and even dispensaries. Magnolia Wellness director Debby Goldsberry said that at her new licensed dab bar, “We’ll be making fresh edibles, and we’ll have a marijuana-infused coffee bar with infused drinks. We’ll have a dabber at every table, and infused mocktails at the bar.” While there is no alcohol in the infused mocktails, similar cannabis product “bars” could become an alternative to traditional alcohol-based establishments.

Beer brands have created small batches of cannabis-infused brews in the last few years. While infused cannabis beer has no THC, brewers aim to have marijuana aroma and taste.

This summer, Lagunitas partnered with CannaCraft AbsoluteXtracts to make SuperCritical, “infused with NorCal’s Finest Cannabis and Yakima’s Finest Hops.”

Humboldt Distillery released “Humboldt’s Finest” in 2016, a limited release premium small batch vodka infused with legal U.S.-grown hemp. Colorado’s Dude’s Brew also sold “General Washington’s Secret Stash,” another cannabis-infused beer, in 2016.

When it comes to tourist destinations, rules and regulations could step in the way of partnerships between alcohol and cannabis companies. In Maine, “future rules likely will prohibit serving alcohol and cannabis in the same place,” according to attorneys evaluating Maine’s cannabis tourism potential.

Some cannabis industry advocates warn against a close association between the alcohol and cannabis industries. Kirsten Velasco, director of Illinois Women in Cannabis said, “If we go too ‘recreational’ and [cannabis] becomes regulated like alcohol – sociologically it sends the message that this is a vice, that it’s a dangerous, addictive, gateway drug. Imagine if everyone understands that cannabis is a safe, effective medicine – that it has nutraceutical, pharmaceutical health benefits.”

In 2015, the federal government partially funded a study that lead researchers to the conclusion that alcohol has a much bigger impact on driving than cannabis.  Researchers found that alcohol “significantly increased lane departures/minimum and maximum lateral acceleration; these measures were not sensitive to cannabis.” Researchers went on to say that drivers under the influence of cannabis “may attempt to drive more cautiously to compensate for impairing effects, whereas alcohol-influenced drivers often underestimate their impairment and take more risk.”

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The U.S. Food and Drug Administration issued warning letters to four CBD companies Oct. 31, stating that companies selling products and making unsubstantiated claims to cure or treat cancer are in violation of the Federal Food, Drug and Cosmetic Act.

The FDA issued warning letters to Greenroads Health, Natural Alchemist, That’s Natural! Marketing and Consulting, and Stanley Brothers Social Enterprises LLC.

The letters cited an FDA investigation that probed into the companies’ websites and social media for claims “regarding preventing, reversing or curing cancer; killing/inhibiting cancer cells or tumors; or other similar anti-cancer claims. Some of the products were also marketed as an alternative or additional treatment for Alzheimer’s and other serious diseases,” according to an FDA release.

The FDA is interested in seeing more substantiated, clinical research on cannabinoid medicines, however.

“We recognize that there’s interest in developing therapies from marijuana and its components, but the safest way for this to occur is through the drug approval process – not through unsubstantiated claims made on a website,” FDA Commissioner Scott Gottlieb said. “We support sound, scientifically-based research using components derived from marijuana, and we’ll continue to work with product developers who are interested in bringing safe, effective, and quality products to market.”

Gottlieb said, “Substances that contain components of marijuana will be treated like any other products that make unproven claims to shrink cancer tumors. We don’t let companies market products that deliberately prey on sick people with baseless claims that their substance can shrink or cure cancer and we’re not going to look the other way on enforcing these principles when it comes to marijuana-containing products.”

The warning letters mentioned existing clinical investigations into CBD and cannabinoid medicines that the FDA considers legitimate.

“The existence of substantial clinical investigations regarding CBD has been made public,” they wrote to Stanley Brothers Social Enterprises. “For example, two such substantial clinical investigations include GW Pharmaceuticals’ investigations regarding Sativex and Epidiolex. Under FDA’s regulations [21 CFR § 312.2], unless a clinical investigation meets the limited criteria in that regulation, an IND [Investigational New Drug application] is required for all clinical investigations of products that are subject to section 505 of the Act.”

“FDA is not aware of any evidence that would call into question its current conclusion that CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B)(ii) of the Act, but you may present FDA with any evidence that has bearing on this issue.” The FDA considers a substance to be “authorized for investigation as a new drug” if it is the subject of an Investigational New Drug application (IND) that has gone into effect.

“We have an obligation to provide caregivers and patients with the confidence that drugs making cancer treatment claims have been carefully evaluated for safety, efficacy, and quality, and are monitored by the FDA once they’re on the market,”Gottlieb said.

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Four numbers you should know about the cannabis industry this week.

6.5 Percent

Colorado’s legalization of recreational cannabis sales and use resulted in a 6.5 percent reduction in opioid-related deaths, reversing a 14-year upward trend in opioid-related deaths in the state, according to a study published in the American Journal of Public Health.

The researchers added, “Given the rapidly changing landscape of cannabis and opioid policy in the United States, the need for evidence of the diverse health effects of these laws is increasing.”

$33 Million

Tel Aviv-based Syqe Medical, the Israeli company that created a 3D printed inhaler for medical marijuana and other uses (Phillip Morris has invested) has raised $33 million in funding, Merry Jane reports.

The inhaler is unique because it is a smart device, and allows doctors to prescribe the drug remotely and in controlled doses.

150 Compounds

Canada is calling for more researchers as there are 150 cannabis compounds that have yet to be explored, according to Mike Dixon, a Canadian researcher and professor at University of Guelph who led a study funded by a licensed medical marijuana producer as well the federal government.

Dixon’s team told CTV News that marijuana companies need a “huge number of scientists” to research medical applications associated with marijuana. “There are more than 150 compounds found in cannabis that need to be explored,” Dixon said.

$10 Million

Uraguay company International Cannabis Corporation plans to invest $10 million in cannabis production in 2018.

ICC will produce Uruguay’s first batch of medical cannabis oil for export to Canada and Mexico in December, Business Insider reports.

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Edibles have been in focus for the cannabis industry this week.

1. Cannabis companies are urging the Florida Department of Health to develop edible cannabis product regulations.

Voters passed a new law in June to allow medical cannabis edible products in Florida. But before vendors can begin developing and selling products, Florida Department of Health officials need to determine “by rule any shapes, forms, and ingredients allowed and prohibited for edibles.”

To speed up the process, Surterra Florida filed a petition for officials to start a rule-making process. “Patients receiving treatment from the petitioners’ medications are barred from doing so via the consumption of legally produced edibles,” Surterra’s attorney wrote.

Health department spokeswoman Mara Gambineri said the rules are already being worked on, but declined to give a time frame, according to Sun Sentinel.

2. Arizona’s Baked Bros encourage safe edible consumption by educating patients on edibles’ dosage and how the body processes them.

We interviewed Nadeem Al-Hasan, co-founder, who talked about what makes a good budtender – including knowing about how edibles differ from other cannabis products. “A lot of patients don’t know their dose. If you have the right dosage, you can make it more effective,” he said.

3.  Colorado has banned gummy bears and other edibles that might appeal to kids.

A ban on gummy bears and other edible marijuana products shaped like animals, people and fruit takes effect this month in Colorado, according to CBS.

“In an August letter responding to Attorney General Jeff Sessions’ request for information on marijuana legalization, Colorado’s governor highlighted the state’s progressively stricter packaging and labeling requirements as a key part of its efforts to minimize retail pot’s appeal to kids.”

4. An Oregon company creates baked-in labels for edibles.

Oregon-based Baked Smart, a company that focuses on safe edible consumption, wrote “If edibles look identical to regular food then it doesn’t matter what shape they come in. Kids and adults can still easily mix them up and eat one by accident. Instead let’s focus on making them easier to identify.”

Baked Smart has developed a line of baked-in edible labels called Cannacals, that are placed on baked goods prior to baking, and can’t be removed.

5. Canada will allow edibles within one year of cannabis legalization.

While Canada’s Cannabis Act allows legalization next summer, edibles were initially left out. This week, the House Standing Committee on Health approved an amendment to Canada’s legalization bill to allow edibles.

“Edibles containing cannabis and cannabis concentrates will be authorized for sale no more than 12 months of the proposed cannabis act,” said Liberal committee member John Oliver.

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A new real estate development company is making big moves in California – and what sets it apart from other real estate development firms is the state’s hottest commodity: cannabis.

Canna-Hub, a California-based real estate development and property management Company for the cannabis industry, announced Tuesday its innovative cannabis real estate development business model to help current and prospective cannabis licensees secure properly zoned property for their cannabis businesses in California. The overall California cannabis market is expected to reach $6.5 billion by 2020, according to ArcView Market Research.

Additionally unique to the Canna-Hub real estate business model is the way it promotes synergies between cannabis business licensees. According to the Company’s release, Canna-Hub has already identified several sites in strategically located cities that can accommodate hundreds of cannabis licensees in an organized manner through the development of Canna-Hub Business Communities, or “cannabis hubs.” The real estate developments will have availability for cultivation, manufacturing, distribution, transport, service or supply vendors, and testing labs.

Helmed by Canna-Hub founder and CEO Tim McGraw, an experienced commercial real estate developer who has also designed or built cannabis specific facilities in several states and abroad, the cannabis hubs will boast about 12 state license types per site.

“Real estate is one of the greatest challenges and biggest opportunities for cannabis licensees and investors ready to participate in California’s exciting Green Rush,” McGraw said in the release. Canna-Hub has identified or secured real estate and zoning approvals in several strategic regions; among the first developments in its portfolio are in California’s Colusa and Fresno counties.

Beginning on January 1, 2018, businesses will be allowed to produce and sell recreational cannabis in addition to medical cannabis which has been permitted for more than 20 years. With a focus on speed to market, Canna-Hub seeks to help cannabis business owners planning to operate under the new regulatory environment starting in 2018 by eliminating the painstaking process of identifying suitable property with the necessary infrastructure and zoning for their operations.

At city council meetings throughout the state, McGraw says Canna-Hub developments provide economic and job creation opportunities for their home communities.

At a Williams City Council meeting in April, McGraw said licensing fees at full build-out could amount to “well in excess of $1 million per year, probably closer to exceeding $2 million per year, which goes into the city’s coffers.”

And at a recent Mendota City Council meeting, he said, “The amount of economic impact and the amount of jobs that it creates is so beneficial to this town that anybody pushing against it would just be pushing against progress.”

The most challenging aspect for any cannabis business can be meeting local zoning laws and requirements, but Canna-Hub offers those businesses space that is already pre-approved with the lowest local permitting fees in the state, the Company said.

“A lot of cannabis companies find a location, and then try to convince, so to speak, the community to accept them and get the support. We did the opposite: We worked backwards into the location, by finding communities that wanted us,” McGraw said to Cannabis Business Times in December about his approach to building relationships between cannabis businesses and communities.

“From an investor perspective, Canna-Hub offers the stability and security that any other commercial real estate venture can provide,” said Canna-Hub founder and chief financial officer Jonathan Charak in the Company’s release. “We also appreciate the fact that our investment risk will be essentially spread across numerous licensees of different types rather than relying upon any single grower or manufacturer for our success. California has the perfect mix of strong market conditions and a regulatory environment that will allow our business model to be successful.”

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The CBD oil market will be at $1 billion by 2020 according to a Brightfield Group report.

The report’s findings are based on a 55 percent annual growth rate. There were $170 million in CBD sales in 2016 according to Brightfield Group.

The total cannabidoil market will reach $467 million this year, according to Brightfield Group and HelloMD.

CBD oil differs from other cannabis medications in that it can be produced without THC, so it’s legal in all 50 states and not subject to federal regulation.

The lack of psychoactive effects from THC, while providing medical relief to many conditions including epilepsy, makes CBD oil a strong option for children and elderly patients.

A recent user experience report found that nearly half of patients who use CBD oil stop using traditional medicines including prescription pills.

About 66% of CBD users indicated that CBD products are either “more effective” or “much more effective” in relieving their medical conditions than are over-the-counter products.

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