Pharma Giant Novartis Teams up with Billionaire-backed Marijuana Startup
CANADA- Novartis AG is partnering with a Canadian cannabis company, Tilray, backed by billionaire Peter Thiel to get in on the medical marijuana business.The health-care giant’s Sandoz Canada division is forming a tactical coalition with Tilray, which makes cannabis medicines in capsules and other forms. Together, the companies will develop new pot-based medicines and Sandoz would dispense them to hospitals and pharmacies.
“The alliance is a major milestone on the long road to legitimizing medical cannabis as conventional medicine,” Tilray Chief Executive Officer Brendan Kennedy said in a statement.
Canadian companies have led marijuana’s evolution from illegal drug to a medical product. The nation permitted medical pot in 2013 and is expected to sanction recreational use this summer. Toronto-based Cronos Group just became the first marijuana company on the Nasdaq.
This isn’t the first time Tilray’s parent firm has partnered with a big health-care company. Privateer Holdings, a Seattle-based cannabis private equity company, is also teaming up with Shoppers Drug Mart, the largest pharmacy chain in Canada.
Founders Fund, the venture capital firm backed by Thiel, was the first institutional investor to openly put money in cannabis when it invested in Privateer. Thiel also co-founded PayPal and was an early investor in Facebook.
What the World can Learn from the 1st Country to Legalize Cannabis
A new policy paper released by the Brookings Institution shines the spotlight on Uruguay for a clearer look at the lessons that can be learned from the world’s first country to legalize and implement adult-use cannabis sales.
The South American country with a population of 3 million, legalized cannabis in 2013, started sales in July 2017, to head off a fervent black market flush with “brick weed,” or pressed cannabis, from Paraguay. The law hasn’t won many popularity contests, but it has survived two presidential administrations, Brookings said.
“It’s always hard to go first, but it’s not as hard to go second and third,” said John Hudak, deputy director of the Center for Effective Public Management for the Brookings Institution, a Washington, D.C.-based research organization.
Hudak aligned with researchers from the Washington Office on Latin America to investigate how Uruguay’s cannabis laws came to be, what’s played out since, and what changes could be made to guarantee their success.
“There’s been a real commitment to the rule of law and to the continuation of policy that I think is quite impressive in Uruguay,” Hudak said. Uruguay’s law was “bold and cautious” so as to accomplish the goal of combating drug trafficking while staying attuned to concerns that could arise from the international community,” he said.
Uruguay’s law bears similarities to cannabis laws seen in U.S. states like Colorado and California. There are home-grow and commercial regulations, seed-to-sale tracking systems, initial supply shortages and banking difficulties.
The market also presents pronounced differences.
Uruguay doesn’t have medical cannabis, which is often the precursor to U.S. adult-use laws; it has only two authorized cultivators; the federal government sets price and purchase restrictions; and sales are limited to citizens. Additionally, the law has exclusivity provisions under which a citizen must choose the one of three ways to procure cannabis: growing it themselves, joining a cannabis club or purchasing it at a pharmacy.
Following months of research, and an October 2017 trip to Uruguay, Hudak and fellow authors Geoff Ramsey and John Walsh saw areas of probable enhancements in Uruguay’s cannabis laws. The authors’ developed seven recommendations for improving results:
Access to banking: Develop solutions to allow access to financial institutions. That could be an internal fix of having local banks “play a game of chicken with U.S. financial regulators” or the creation of a partnership with bankers in Canada, which is expected to legalize adult-use sales this year.
Increase education: Reduce education gaps in medical and law enforcement communities. Develop classes for medical professionals and fund research into the potential medicinal efficacy of cannabis. Hold department-level trainings for law enforcement officers to prevent unlawful seizures of products.
Expand medical cannabis: Create a system for medical-specific uses of cannabis. The country has an infrastructure in place for this addition as Uruguay produces medical cannabis as exports to other countries.
Reconsider the exclusivity of distribution: Address issues such as supply shortages and illegal sales by devising a system that allows people to access the product legally via more than one specific means.
Create a dispensary model with viable revenue system: The price of cannabis is currently fixed at about U.S. $1.40 per gram. To increase revenue and the viability of the system, the government could consider subsidizing cannabis operations, either as private entities or government-run institutions.
Legal sales to tourists: The government could consider implementing a pilot program by which tourists could legally purchase cannabis — perhaps at a higher cost.
Readiness to correct future implementation problems: Increase the staffing and funding for the Institute for the Regulation and Control of Cannabis, the regulatory body that oversees the laws. In addition to reliance on in-house officials providing evaluations of the system, IRCCA should rely on independent, academic analysis about the positive and negative aspects of the law.
Beware of Cannabis Investment Scams
COSTA RICA- Two Florida physicians have sued the owner of Full Spectrum Nutrition in Colorado Springs, claiming their $1.1 million investment in the vendor of cannabinoid-rich hemp extracts and products went instead to a Costa Rican wildlife refuge.
Dr. Josse Anthony Mazo and his wife, Dr. Maritza Rascos, both of Melbourne, Fla., have sued John Michael Merritt Jr., the owner of Full Spectrum Nutrition.
The doctors claim they were defrauded and they want their money back plus three times that sum in damages. Orlando, Fla., attorney Craig Brand filed a lawsuit on their behalf in Denver U.S. District Court. “Merritt is a ‘classic con artist’ who preys on people who dream of making millions on the rapidly growing marijuana industry,” Brand said.
Costa Rica is an animal lover’s paradise, Brand noted, but Mazo and Rascos never intended for any of their investment to go to the iRescue wildlife refuge Merritt was setting up there.
Mazo and Riascos claim Merritt, who has homes in Florida, Costa Rica and Louisiana, and an apartment in Colorado Springs, presented them with an elaborate business plan that spelled out huge profits, according to the lawsuit.
In May, Merritt claimed his company, which had a Florida address, had a special deal in which it received CBD-infused products at below-wholesale prices from Folium Biosciences, a Colorado Springs-based hemp-products wholesaler, the lawsuit states.
“Folium Biosciences is the largest vertically integrated producer, manufacturer, and distributor of hemp derived phytocannabinoids in the USA,” according to the company’s website.
The special deal, Merrit claimed, meant Full Spectrum could “sell such products at retail to obtain extraordinary net profit margins.”
Merritt in fact provided Mazo and Riascos a tour through Folium’s extraction and purification plant in Colorado Springs to support the claim that he “had an ongoing equity interest in Folium.”
“In fact, Merritt had secretly been establishing a ‘wildlife refuge’ business in Costa Rica in conjunction with bottling and marketing Costa Rica water under the name ‘iRescue,'” the lawsuit says.
