Medicinal marijuana has yet to hit expected highs

In the 1942 film Devil's Harvest, a private investigator goes after criminals who are corrupting America's youth by "spreading the weed of Satan". The film's promotional poster describes the sale of the drug as a "vicious racket with its arms around your children".

Google Devil’s Harvest in 2016 and a legal cannabis seed by the same name will come up first on your search engine list.

Why? Not only because public perception of cannabis has changed dramatically over the last half century but also because the professionals peddling the drug in the modern age understand the importance of search engine optimisation (SEO). They also have high-tech logistics networks for the distribution of their products and understand more than just what kind of “high” you will get from one strand of weed over another.

Model pupil

Now that half the population of the

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United States

has access to marijuana – either for medicinal and/or recreational use – it can no longer be considered a minor racket run by a handful of shaggy-haired hippy types.

"It's definitely not a cottage industry," says Miles Light PhD, a researcher at the Business Research Division of the University of Colorado and co-founder of the Marijuana Policy Group, a Denver-based consultancy on marijuana markets and regulation. "In Colorado, it's larger than the gold-mining industry."

The state has one of the most developed marijuana industries in the country with 10 companies currently accounting for 25 per cent of the entire local market. The remaining 75 per cent is made up of about 350 smaller producers. However, consolidation is happening as more and more of the smaller operations are bought out by the “big 10”, many of whom are now expanding their networks into other states with less developed markets.

According to the Marijuana Policy Group, legal marijuana “generates more output and employment than 90 per cent of industries” per dollar spent in the state. Marijuana taxes are also expected to become the “largest excise revenue source by 2020: three times larger than alcohol.”

The consultancy has also observed average prices falling by 9 per cent from 2014 to 2015 and expects prices to continue falling by a further 7 per cent per year until to 2020.

Of course, legal marijuana market infrastructures vary considerably from state to state, depending principally on when legalisation occurred. Colorado's amendment 64 was passed in 2012 while California, Nevada and Massachusetts just made recreational use legal in November 2016.

"Colorado is much further along than Massachusetts, for example, so there are distribution systems in place in the former, while the latter is reaching out for assistance in setting up the infrastructure," says Ryan Murphy, vice-president, life sciences and IT for healthcare/pharma with Enterprise Ireland in Boston. "But there are already many companies that have sprung up to support the industry."

Medicinal uses

Medicinal marijuana has proven effective in the treatment of everything from glaucoma, epilepsy, anxiety, Alzheimer’s disease, multiple sclerosis and arthritis.

More recently its effectiveness for pain relief has been in the headlines given the growing number of high-profile people – Michael Jackson and Prince, to name but two – becoming addicted to opioid-based pain medicines. Suddenly heroin addicts are being found in middle-class, white neighbourhoods.

While anecdotal evidence and numerous smaller-scale scientific surveys already suggest a growing number of people suffering from pain, nausea, anxiety and various other forms of emotional distress were substituting prescription drugs for marijuana, a 2015 study by the Centre for Addictions Research of British Columbia, published in the journal Drug and Alcohol Review, added additional scientific rigour to what were previously principally casual observations.

The Canadian study, based on data collected from almost 500 medicinal marijuana patient surveys, reported 80 per cent of those surveyed successfully substituted cannabis for prescription drugs in the treatment of pain-related conditions.

There’s also a growing body of research which shows how painkiller abuse and overdose are lower in states with medicinal marijuana laws. A study from the University of Georgia demonstrated that, in the 17 states with such a law back in 2013, prescriptions for painkillers and other classes of drugs fell sharply compared to states that did not have a medicinal marijuana law.

Big pharma

So where is big pharma in all this and why haven’t the pharmaceutical giants become involved?

“It confirms a lot of suspicions for the pro-legal side – mainly that people would use the drug in lieu of prescriptions to manage pain – a big loss for pharma and the anti-legal side,” says Murphy.

“It remains to be seen how pharma will ultimately react. Some pro-legal people fear that pharma getting involved will topple all of the smaller companies and industry that currently sell the drug, especially if pharma lobbies to the federal government that only pharma could safely bottle the drug.”

There are other legal roadblocks preventing big pharma from entering the medicinal marijuana market.

“Now that such a large percentage of people in the United States has access to recreational marijuana, we can expect to see a shift away from opioids but I don’t see the pharmaceutical industry beginning to manufacture cannabinoid-based pharmaceuticals any time soon,” says Light.

The first problem they face is that, as federally chartered companies, they cannot legally sell a product that is still technically prohibited on a nationwide level. They’re unbankable. Any financial institution would have to file reports on what is still considered “suspicious” activity.

For now, big pharma will continue to fight the pro-cannabis lobby, despite any negative impact – albeit small – medicinal marijuana is having on market share.

“Pharma still seems to be fighting legalisation where they can with campaigns against ballot questions, funding anti-legalisation research and lobbying for strict laws where the laws do pass,” Murphy says.

"A big obstacle for getting further involved seems to be that marijuana is currently a 'Schedule I' substance (same as heroin and other narcotics). The US DEA is considering reclassifying it to 'Schedule II', which would allow pharma companies to bottle the drug. When a US state legalises marijuana, they are essentially ignoring federal law, and President Obama has basically said that federal departments will not interfere."

Big evidence

In addition, big pharma requires big evidence to back up any claims made as to the efficacy of a “new” medicine before a major pharmaceutical manufacturer will put its name on a pill bottle.

"While studies on the effectiveness of the use of medical marijuana for some issues exist, none have been as rigorously studied as FDA-approved existing legal medical treatments," says Swapna Reddy, clinical assistant professor at the School for the Science of Health Care Delivery at Arizona State University.

“As such, we do not have empirical proof whether or not either type of treatment is better than the other.

“Since it has not been well studied for its efficacy or its toxicity regarding the treatment of these health issues and/or side effects, it is hard for a physician to have a well-informed discussion about the risks vs benefits for patients.

“Therefore, it is difficult to estimate the impact of medical marijuana as a disruptor in certain medical markets and for specific treatments. The legalisation aspect in 28 states may provide opportunity for rigorous research that would aid in the progression of this discussion.”