On November 8, constituents in nine states will vote on medical or recreational, known as adult use, marijuana laws in what could be the largest policy decision pot has faced since being outlawed by the U.S. government in 1937. In California particularly, legalizing recreational weed for adults (defined in California’s Prop. 64, the Adult Use of Marijuana Act, for people 21 years and older) will have ramifications beyond the state’s borders. That’s because California’s projected dual market of medical and recreational pot is larger than those of Colorado, Oregon, Washington and Alaska combined—the first four states to have legalized weed.
Silicon Valley techies are already eyeing the weed industry. “Prop. 64 essentially opens up the floodgates,” says David Hua, CEO and co-founder of Meadow, a San Francisco-based startup connecting cannabis patients and dispensaries. Last year, California’s medical market was estimated to be worth $2.7 billion. If the state legalizes, total U.S. pot sales could hike to $23 billion by 2020. Prop. 64 also imposes a 15 percent retail tax on adult use cannabis. If Prop. 64 passes, California’s division between adult-use and medical marijuana is sure to influence not only how other states approach pot legalization, but specifically the public perception of cannabis as both a medicinal product and an accepted medication.
“The medical model where you have a pharmacist in a white lab coat greeting patients at the dispensary prescribing cannabis similar to other medications in its delivery form, as it’s done in New York, might combat the stigma associated with medical cannabis,” says Ari Hoffnung, CEO of New York-based medical marijuana company Vireo Health. “It might make it more socially comfortable for a wider segment of society to embrace.”
Many are looking at California’s dual market to figure out those business models. While we’ve already seen the dual-market experiment play out in other green states, Washington’s and Oregon’s medical marijuana markets were not thoroughly regulated at the state level when adult-use pot became legal. Because of this, the former absorbed into the latter. This could create a potentially huge gray zone for the Golden State, as under its current medical marijuana program, it’s often unclear who’s using cannabis to medicate and who’s using it simply to get high.
The medical marijuana industry is leaning on a pharmaceutical model to retain their market segment. Many patients aren’t opposed.
This hazy, unregulated model, made legal 20 years ago, plus the anticipated dual market, has led California legislators to lay out statewide regulations under the Medical Cannabis Regulation and Safety Act. “Part of the impetus was that they had the feeling regulations were coming for adult use and it would be much easier in the long run if we were like Colorado, which had a state-level regulatory system in place for medical,” explains Amanda Reiman, marijuana law and policy manager at the Drug Policy Alliance.
Therein lies the potentially prolific shift in regulated marijuana—one that could alter the industry’s national evolution from a niche market into a Big Pharma business. "The medical market will become more nuanced in California,” says Reiman, “and after recreational legalization, it will become even more medical” even as stoners continue to occupy their own space in the industry.
Smoking whole plant cannabis medicine will always be central to the medical market, but cannabis oils, tinctures, capsules and patches are examples of how the aesthetic of medical marijuana has already changed. In Colorado, high-potency products like sublingual strips or capsules are becoming commonplace in the medical market. Such products are making medical marijuana growers focus on breeding plants with a particular "chemical fingerprint in mind” to accommodate patients’ needs, according to Anthony Franciosi, founder of Colorado-based growery Honest Marijuana. While grinding up some bud to sprinkle into a rolling paper might feel medicinal and similar to plant medicines like echinacea, aloe vera or ayahuasca, reaping the therapeutic effects of a joint is a different medical experience altogether when compared to popping a pill. Pharmaceutical models are not proven to be more effective than smoking whole plant medicine, but choosing between the two will be contingent on a patient’s needs.
That’s why part of the medical marijuana industry is leaning on a pharmaceutical model to retain their market segment. Many patients aren’t opposed, especially those who demand consistency between batches and more sterile, exact methods of ingestion. “If I’m using cannabis every day for back pain, multiple times a day, it makes sense to be a patient. You have access to more places and you get it cheaper because patients don’t pay a sales tax,” Reiman says. “But because of prohibition, it’s been hard to move [standardization] forward with the whole plant because we haven’t been able to do the research needed to give standardized dosages.” If Prop. 64 passes, growers and medicine makers will have greater opportunities to test and refine their techniques in the cultivation and processing of plant medicine as well as manufactured cannabinoid formulations.
A few programs have gotten close to standardized cannabis medicine, such as New York’s, which bans smoking cannabis flower altogether. Only patients with ten qualifying conditions can medicate via cannabinoid formulations manufactured as capsules, tinctures, vaporizable oils, sublingual strips and patches. That’s led companies like GW Pharmaceuticals to measure and isolate cannabinoids such as CBD, a non-psychotropic chemical often used to treat epileptic seizures, to create FDA-approved medications like Epidiolex, which contains less than three-hundredths a percent of THC and thus is not classified as marijuana. GW Pharmaceuticals also created a THC-based medication called Sativex, but it’s only available in Europe.
Other companies manufacture synthetic cannabinoids to be used as medications approved by the FDA. "We’re trying to take all the positive results and distill them into a pharmaceutically relevant medicine—one that has been through a controlled, clinical trial and can be approved by the FDA,” says Seth Yakatan, CEO of Kalytera, a cannabinoid company working specifically on synthetic cannabinoid medication to treat bone fractures and osteoporosis. “We’ll be able to illustrate that there’s a pharmaceutical path out of the plant.”
Synthetic cannabinoids don’t require the long growth period, resources and energy that pot farms do, but can provide exact consistency in commercial quantities. "I don’t deny the therapeutic value of whole plant cannabis, but it’s not necessarily repeatable to grow,” says Jeff Korentur, CEO of Teewinot Life Sciences, a cannabinoid company that aims to synthetically reproduce a variety of cannabinoids and terpenes. “Ostensibly there’s not much difference between strain X you smoke with your friends on Friday night or consume in a tincture for therapeutic value based on a condition that you may be trying to alleviate symptoms for.”
For now, Teewinot only works with a few cannabinoids to eventually sell to other companies looking to incorporate cannabinoid therapeutics into their medications. "We’re hoping to be positive contributors to expanding the cannabinoid research space,” Korentur says. Isolating cannabinoids and proving their efficacy for treating specific indications could eventually help with FDA rescheduling, he speculates.
Still, synthetic cannabinoid medication is controversial. “It’s a question of capitalism. We as small farmers are breeding these high-cannabinoid strains, stabilizing them and doing the work it takes to create this whole plant medicine. But we’re full believers in the entourage effect,” says Justin Calvino, a board director for the California Growers Association. He’s referring to the synergistic relationship among all the chemicals in cannabis. "Focusing too much on one cannabinoid will dilute the therapeutic effects of the whole plant,” he says.
With that said, Calvino doesn’t see cannabis taking a direct jump into mainstream medicine. "I see a transition period,” he says. “Legalization will allow more clinical trials as doctors decide, ‘Wow, this is not some hokey pokey weird phase.’” Whether as a consistent batch of bud, cultivated clones of the same plant or as tested and verified oils and capsules, the aesthetic of marijuana as a medication, will change how people see it and how they use it. “Here’s the deal,” says Calvino. “If you want to break the stigma, also break the form of consumption.”
“One thing I’m hopeful about, especially in California, is that medical cannabis will be integrated more into our medical setting,” says Natalie Ginsberg, the policy and advocacy manager at the Multidisciplinary Association for Psychedelic Studies (MAPS), a nonprofit that is working to get smoked whole plant medical marijuana approved by the FDA. The medical market in California and beyond may have more freedom to grow in a distinctly medical direction only when a clearer distinction between medical and recreational cannabis is established. "I think doctors will be more open to having that conversation about medical marijuana when they know patients can just get it for fun otherwise,” Ginsberg says. “Maybe as people start to identify more with the adult-use part and stop renewing their medical cards, it will make space for people to identify with the medical aspect of marijuana and not feel like it’s just for people trying to get high.”
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