2018 was a year of growth for the cannabis industry, and the North American market is predicted to continue this rapid expansion from $9.2 billion in 2017 to $47.3 billion spent on cannabis products by 2027. Great developments are also expected to come from abroad, growing from $52 million spent in 2017 to up to $2.5 billion by 2027.
Despite these optimistic numbers, the progress is still met with hesitation by international entities. Approximately one year ago, we witnessed the World Health Organization (WHO) give the checkmark of approval to cannabidiol (CBD), saying that it should not be a scheduled substance. Despite this, WHO is stilled delayed in rescheduling or officially endorsing cannabis. In addition, the International Narcotics Control Board vocalized its regret after the legalization of cannabis in Canada, relaying its belief that the acceptance weakens the framework of drug control.
However, slow progress is the nature of any major change in society, and there is certainly what to be optimistic about. The most recent step in the process is the newly signed Agriculture Improvement Act, also known as the Farm Bill. With this bill in place, some products derived from cannabis will now be withdrawn from the Controlled Substances Act, removing them from the category of an illegal substance under federal law. This bill is expected to give the industry a significant boost.
As the growth of the cannabis industry continues, preempting hurdles is critical. There are already examples of how leaders in the cannabis industry are seeking to address the upcoming growth, including the establishment of an international cannabis medical market in countries where medical cannabis is legal to guide the rollout. The most important aspect of managing the cannabis industry in the coming years will be creating and maintaining an international cannabis medical market with rules and regulations to guide how countries produce, market and distribute cannabis for patients. In fact, the Food and Drug Administration (FDA) issued a statement right on the heels of the signing of the Farm Bill, putting these wheels into motion. The statement explains that Congress reserves the right for the FDA to “continue to enforce the law to protect patients and the public, while also providing potential regulatory pathways for products containing cannabis and cannabis-derived compounds.” For the medical cannabis market to succeed, this is a crucial caveat, as it is necessary to ensure that cannabis products are safe and effective for patients.
This is especially important as patients interested in cannabis treatments are already fighting a disease; making sure their medication is safe is necessary to avoid dangerous side effects or drug reactions. This is already happening in many countries including Greece, Thailand, South Korea and the United Kingdom. The moves by these countries to codify cannabis law in their own countries is a great first step, but there needs to be harmony between countries’ policies when it comes to cannabis. Otherwise, laws may prevent countries from being able to work together toward the establishment of an international cannabis medical market.
Especially in areas such as the European Union, countries interested in taking part in the cannabis industry will need to adopt similar laws in order for cannabis to be distributed effectively. Disunion among countries in terms of their approach or laws surrounding cannabis may cause many fragmented cannabis industries, separated by country, and overall, patients will suffer. For example, if there is a quality medical cannabis grower in a specific country, a patient from a different country would not be able to get treatment if the local laws are at contrast with the rest of the industry. Ensuring that countries have the same laws in regard to cannabis will allow for greater freedom for cannabis companies to provide products, and will allow patients to have greater access to effective treatments.
In the United States, cannabis law varies greatly, as states have the ability to self govern their own cannabis industries. Some states, such as Washington and Colorado, have legalized recreational marijuana, while other states continue to categorize cannabis as prohibited. Researchers and companies are currently wary of investing in the cannabis market in the United States due to the volatility of the legislation and the lack of an overarching federal policy in how the country deals with both medical and recreational cannabis. Recently, the federal government attempted to better clarify their rules with the proposal of a new cannabis farm bill. The bill is currently with the president of the United States, awaiting his final signature. If passed, the bill would effectively remove industrial hemp from the list of controlled substances monitored by the federal government. The president is expected to sign the bill into law in the coming days or weeks, which will represent a massive boost to American farmers and the cannabis industry, as well. The passing of this bill is important in that it legitimizes cannabidiol (CBD) and hemp in terms of federal law and will allow companies to work with these materials in order to create new products.
Historically, strict marijuana laws in the United States have caused much of the cannabis market to operate on the black market to avoid the inherent illegalities of working with cannabis. Now, with the removal of hemp from the controlled substances list, cannabis and CBD will be able to be monitored and regulated to ensure that products containing CBD are safe. This is great news for patients seeking treatment with a CBD product, as the bill will force companies to adhere to strict guidelines around the creation of CBD. Patients will not have to wonder if the treatments they are getting are safe, as the federal government will have the jurisdiction to dictate which products go to market and which do not. Legalizing CBD is a huge step in setting up the international cannabis medical market and providing companies with necessary guidelines for manufacturing CBD to high standards.
As more states, such as New York, begin the process of legalizing cannabis, the need for rules and regulations to guide the industry are becoming more apparent. The establishment of an international cannabis medical market will mean the difference between a widespread adoption of cannabis-based treatment and a much more segmented approach to cannabis, where states and countries have contrasting legislation for how cannabis is handled. We have seen important steps taken with the proposal of the farm bill, and in the independent adoption of cannabis companies in certain countries. However, for the cannabis industry to grow as it is expected to, the differences in approach to cannabis need to be rectified to ensure patients can get cannabis treatments, no matter what country they are from. While the advances made indicate the evolution in the approach to the cannabis market, even more needs to be done to sync up cannabis legislation between countries to prevent the industry from becoming unregulated and fragmented.
About Eyal Barad
Eyal Barad is CEO of Cannabics Pharmaceuticals, a leading company in personalized cannabinoid medicine focused on cancer and its side effects.