The DEA play

David HodesNews0 Comments

It’s been nearly a year since the Drug Enforcement Administration (DEA) announced that they would open up research into marijuana and its chemical conditions with a new policy that would allow additional grows in the U.S.

Reportedly, the DEA will allow four grows initially but they have not released any specific number yet.

All an interested cannabis business needs to do to be DEA-compliant is spend a few thousand dollars, fill out an application form and they will get right back to you.

Since then.. crickets.

One company taking a shot at a DEA license to grow is Medicine Man, based in Colorado. The company is supporting the medical marijuana business development in Pennsylvania and Florida, among others, and wants to take a greater role in research.

They applied for a license through their partnership with MedPharm, a company setting up a lab for developing cannabis pharmaceutical-type products, that allows for companies like them to provide dosage forms of cannabis for researchers around the country. “We have gone through a few rounds of questions with the DEA and it’s difficult,” Andy Williams, co-founder and CEO of Medicine Man and managing partner of MedPharm, said during a recent online medical marijuana seminar. “They haven’t issued a license yet. We don’t know if they will but we are hopeful,” he said. “But these are the types of things that have to be done to advance the research of cannabis.”

According to Albert Gutierrez, CEO of MedPharm, they paid the application fee of $3,000 and have been going through rounds of comments. “But we have not gotten a whole lot of direction from them about what is to come next,” Gutierrez said. “We have offered to be a helping hand and push things forward, but there has not been much coming from them over the last month and a half. They are still working on it. I think the current administration may have influence on it moving forward.”

It’s a big deal for the agency to step up and do this – even though, at the time of the release of their policy statement announcing the offer, there were rumors flying that the DEA was actually considering either rescheduling or a complete descheduling of cannabis.

But they admit that they are willing to support research. What happens now is what has been happening since the announcement – quiet investigations by companies into what, exactly, the DEA wants them to do to be compliant, and a lot of silence from the DEA.

For nearly 50 years, there has been only one federally legal grow in the U.S. – Mississippi State University – with decidedly mixed results. A recent federally-legal PTSD study at Johns Hopkins was cancelled due to the poor quality of marijuana from MSU. “I read that they only grow 42 strains there,” Williams said. “Heck, I do more than that in my facility. And they think that is going to cover everything? It’s ridiculous.

“This is the cannabis used for all of the studies from the NIDA and others,” he said. “How the heck can we determine if these studies are valid based on that? Not to mention NIDA funds the vast majority of studies to see how bad cannabis is, not how good cannabis is. So getting competition into this area is really important.”

With the new policy, it appears that the DEA wants to demonstrate that they are listening to the industry. They reported in their policy announcement that they supported at least 17 state-sponsored pre-clinical studies of marijuana once California legalized medical marijuana in 1999, which had been funded by $9 million dollars from the state. But those studies appeared to end once the state stopped funding them, the DEA noted. “A growing number of researchers have expressed interest in conducting research with extracts of marijuana that have a particular percentage of CBD and other cannabinoids,” the DEA included in their announcement. “The DEA fully supports research in this area.”

The policy statement added that this will open commercial endeavors and not just federally funded or academic research, and open the door for pharmaceutical companies should that research demonstrate that marijuana is safe and effective independent of the NIDA contract process. Some in the industry believe that allowing pharmaceutical companies access was the real driver behind the policy change.

The DEA also said that it will strictly limit the number of growers to make sure that the marijuana grown will not be diverted into the recreational market.

But here’s the rub: The DEA is also investigating whether any applicant has had previous experience handling controlled substances in a lawful manner, or “engaged in illegal activity involving controlled substance.” “While past illegal conduct involving controlled substances does not automatically disqualify an applicant, it may weigh heavily against granting the registration,” the policy paper reported.

They follow that statement with another stipulation that requires any applicant to provide detailed information about an applicant’s past experience in the manufacture of controlled substances, ie, marijuana.

That clause appears to basically disqualify anyone in any state where medical or recreational marijuana is legalized, because anyone working in these areas are still in violation of federal law – which means, if you are an experienced grower, you are likely out of luck to apply as a grower for the DEA.

Will this new policy actually work? If so, it could be very lucrative for any company that gets licensed to grow for the DEA. But there may be too many headaches, too much oversight and control, and, inevitably, too much bureaucracy, for anyone in this industry to actually work with the very agency that has been so problematic for the cannabis industry.

The post The DEA play appeared first on Cannabis Business Executive – Cannabis and Marijuana industry news.

Source: Cannabis Business Executive

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