A PotNetwork News Special Report
The North American Marijuana Index closed mixed on Tuesday following this week’s news that GW Pharmaceuticals (NASDAQ:GWPH) won FDA approval for their CBD-based drug Epidiolex. A milestone for the medical cannabis community, news of the approval sent GW’s prices skyrocketing, with the company closing the day up 1.21 percent, and up a whopping 6.34 percent in after-hours trading. The ramifications of this approval will be felt far and wide across every sector of the cannabis industry, with GW CEO Justin Gover noting that it could pave the way for further medication approvals.
"This is an approval, not just a landmark for Epidiolex and for patients who may benefit from this specific medication, but also a strong belief from this company that cannabinoids have a bright future in the form of other drug candidates derived from the cannabis plant across a range of other disease areas," Gover said Tuesday in an interview with CNBC.
With the Index rising 1.64 percent on Tuesday to end the day at 257.30, The Marijuana Stock Report takes a look at just what the approval of Epidiolex means to the cannabis industry at large in this special report.
What It Means For The Federal Government
To say that the legal environment surrounding marijuana is complex is definitely an understatement. Despite 20 states that have approved medical cannabis in some form, and despite nine states and the District of Columbia that have legalized recreational cannabis, the drug remains a Schedule I drug under the Drug Enforcement Agency’s (DEA) Controlled Substances Act (CSA). The Schedule I classification deems the drug of high risk and minimal benefit, particularly for medical use. Cannabis is classified right along other Schedule I drugs like heroin and LSD, and is more regulated than either opium or cocaine.
The Schedule I status greatly restricts research that can be performed on medical benefits of cannabis. In fact, research is limited to studying the addictive behavior of cannabis or the negative impacts of the drug.
But the tide is changing, and last year, a government-commissioned group of experts concluded that the U.S. is creating a risk to public health by not engaging in more research about cannabis and CBD in particular. Supporters of the FDA’s Epidiolex approval mark it as a major medical milestone, and are hopeful that this will open the doors to further research of cannabis as a medical cure for other ailments.
The DEA’s stance that any extract from the Cannabis sativa plant is classified as Schedule I was recently upheld by the 9th U.S. Circuit Court of Appeals. However, now that the FDA has approved Epidiolex, the DEA is now required to reclassify CBD into a different category other than Schedule I, because the drug now has federal medical approval. This must occur before the drug can be sold in the U.S.
What It Means for CBD Products
CBD oil is widely sold in the United States, with most producers making general claims that the oils improve overall health. Demand for CBD is at an all-time high. There are many artisanal CBD oil products that can greatly vary in dose, quality control and side effects. Indeed, the FDA has been trying to crack down on CBD producers who make claims that their products can cure diseases like cancer. The FDA’s warnings reminded these producers that only FDA-approved products that have gone through rigorous clinical trials can make such claims. Skeptics remind the public that CBD oils have no regulation, so they don’t exactly know what they’re buying.
Did the CBD legal question become even more confusing with the FDA’s Epidiolex approval? Some say yes. Many consumers are asking the all-important question: Is my CBD legal? The answer largely resides in where the CBD came from, meaning the plant it was derived from. “Cannabis” is a general term referring to all plants in the Cannabis sativa family. Marijuana is a cannabis plant with THC levels above 0.3 percent, meaning it produces the psychoactive effect. Hemp is cannabis with THC below 0.3 percent, and is often referred to as industrial hemp.
The Debate Continues
While there is no clear answer, most legal experts agree on the “source theory” that if the plant is legal, the products derived from it are legal. Lawyers interpret this to mean that CBD derived from hemp grown domestically within the U.S. under the 2014 Farm Bill regulations is legal. CBD from imported hemp is not. In fact, the Ninth Circuit ruling mentioned early affirmed this theory. The DEA recently published an internal directive stating that6 CBD from hemp is mostly legal.
The answer is not so straightforward regarding CBD derived from marijuana plants. A state’s stance on cannabis largely determines CBD’s legal status. If the CBD product is in compliance with state laws and used for medical purposes, it is generally protected, but it is certainly not iron-clad. All of the confusion has led to a very complicated legal situation with lots of room for interpretation.
Still, uncertainty has left consumers across the country in mass confusion, wondering whether they can legally purchase these products, and concerned about law enforcement repercussions if they do.
Many are hoping that the FDA’s approval of Epidiolex will shed light on this confusing problem.