Deepak Anand on CBD Regulations and European Market Domination

Cannabis business expert Deepak Anand provides an update on his work with cannabis social justice agencies as well as his take on stories shaping the global cannabis industry. Anand works with Norml Canada, an organization working on amnesty for Canadians who have been unfairly charged with cannabis-related offenses as well as CFAMM, a group looking to ensure medical cannabis patients have fair access and taxation. Anand observes that the excitement regarding the health benefits of CBD oil has led to regulatory problems, especially in Europe. However, the US is moving toward a regulated CBD industry and the US FDA is trying to regulate CBD products. In terms of European expansion, Anand believes Canadian LPs have a huge advantage when compared with MSOs. The European market requires EU GMP certification and US MSOs cannot earn this certification without federal legalization. However, Anand cautions that other countries such as Israel, which recently allowed cannabis exports,  are primed to dominant the European space.


Benjamin A. Smith: Welcome back, everybody. On the line joining us is the one and only Deepak Anand. Welcome, Deepak.

Deepak Anand: Thanks for having me.

Benjamin A. Smith: Great. This is the first time we’ve spoken, so the pleasure’s all mine. Now, I wanted to ask you, getting right into it, how are things at your new location at NORML? Do you like working on the policy side of the equation a little bit more than your last gig, or how is that working out for you?

Deepak Anand: Yeah, absolutely, and I’ve always been involved in the policy side, you know, for many, many years. You know, I’ve assisted both Federal as well as provincial governments on cannabis policy, and the role at NORML is just further expanding that anyways.

I mean, one of the biggest things that we’re, you know, sort of moving forward on NORML is the whole amnesty piece, because quite frankly, you know, we’ve gone forward with legalization and, you know, we’ve unrolled a number of things in various provinces. But one of the big issues that still is unresolved is Canadians still continue to be charged unfairly for cannabis-related offenses, and more importantly, there’s a number of Canadians that are sort of, you know, charged historically for minor possession. And you know, one of the things at NORML we’re trying to do is, sort of, you know, fight or lobby for that.

So one of the things that we’re looking to actively sort of lobby for is to ensure that Canadians that have been unfairly charged for cannabis-related offenses are granted amnesty in some end. And you know, there’s that issue that sort of is living, because a number of people, to this day, can’t apply for licenses, they can’t travel to the US – I mean, it’s a serious issue.

Benjamin A. Smith: Okay. Can you tell me what is the motivation or the backers behind the criminality of cannabis infractions, if you want to call it? Is it just sort of a public service that people are trying to get, you know, people not charged under cannabis laws or predatory cannabis laws? Or is there a real backer behind it? What is the motivation behind that, or is it just sort of a policy think-tank thing?

Deepak Anand: Yeah, I mean, you know, historically we’ve had laws in this country that would prohibit anyone from sort of undertaking cannabis retail businesses. And a lot of the laws, you know, whilst the Cannabis Act may have come into effect, a number of laws relating to amnesty and particularly simple possession charge under the previous regulations still hold. I mean, one of the things that the Liberal government said when they were legalizing cannabis was, you know, they would look at sort of cannabis amnesty once they’ve dealt with legalization.

Now that the legalization file has unraveled, you know, we very much are proud of working with them to make sure that we hold their feet to the fire as far as cannabis amnesty is concerned.

Benjamin A. Smith: Sounds good. Now, switching gears to CBD oil: there’s been a lot of talk about all the therapeutic benefits, and of course, there are plenty. It’s, you know, anti-inflammatory, it helps you sleep, there’s a lot of good attributes to it.

Now, I want to get your thoughts about whether you think CBD oil ultimately is a little bit of a fad, or do you think it will, you know, eventually exceed expectations about the therapeutic aspects that it can bring to patients?

Deepak Anand: I mean, clearly there are, you know, a number of benefits with CBD; you know, there’s a number of clinical evidence currently being formed around CBD in a variety of different conditions, and whilst it may be beneficial for certain conditions, I think that we’re getting ahead of ourselves in many ways. If you look at what’s happening in the UK, for example, I just got back yesterday, and there’s CBD everything in a whole bunch of High Street stores or pharmacies that are available over the counter, whilst, you know, the product in general remains unregulated.

Germany is the same story, and now we’re seeing the US, you know, look to put some of the toothpaste back in the tube. I think there are benefits for CBD, clearly, for some conditions, but I think we’re getting ahead of ourselves here by just producing a whole bunch of CBD products. And I think if you look at the Canadian perspective, I think we’re doing it right. We are looking to regulate both THC and CBD in terms of how it can be used, whether that be CBD water, whether that be CBD in vitamins, etcetera.

I mean, quite frankly we don’t know all of the details around CBD at this point. Whilst it may have therapeutic sort of potential for some, it’s not this miracle hail-all drug that people seem to be making it out to be.

Benjamin A. Smith: Okay. When do you expect the regulation behind the manufacturing and safety profile of CBD is going to be generalized within the industry? Because as you mentioned, there’s a lot of unregulated CBD out there, a lot of it that there’s not that regulation framework to really help it. How long do you expect that to catch up? Is it going to happen, you know, now that the Farm Bill has passed, is it going to happen within, say, 12 to 24 months?

Deepak Anand: Yeah, absolutely. I mean, the US FDA has clearly said that they’re going to look at sort of, you know, regulating CBD. We’ve seen a number of states move forward now and actually take CBD off shelves completely, not allowing dispensaries or retail stores to, you know, even carry CBD. So whilst I think the US needs to do a number of things from a Federal legality standpoint, I think that, you know, the latest move with the Farm Bill and getting the US FDA involved clearly shows that this is going to be a regulated industry.

It’s going to be something that is very near to the US. I mean, whilst it had a number of different products around for very many years, including CBD products, at the same time, the times change, and I think a number of these companies are going to have to get into compliance from a regulatory perspective. And I think that’s predominantly what the United States Food and Drug Administration is looking at, you know, is making sure that anything that’s currently on the shelves is safe for human consumption.

Because quite frankly, for too long, the product’s been unregulated, untested, and by and large, unsafe, you know, potentially full of, you know, pesticides and other heavy metals, etcetera. There was a study that was just done yesterday that looked at six CBD products on the market and either found no CBD in it, or found dangerously high levels of pesticides and other sort of harmful ingredients in the product. So that is going to have to change, and I think that’s predominantly what the US FDA is looking to do at this point.

Ed Milewski:  Deepak, your company is a Canadian company, is that correct?

Deepak Anand: Yes, that’s correct. I sit on the Board of a number of different organizations; I think what we were talking about earlier was an organization called NORML. NORML is a worldwide organization in the stance for sort of, you know, the organization for marijuana laws and reform against sort of unjust laws. One of the other, you know, organizations that I sit on the Board of is called CFAM, and that’s Canadians for Fair Access to Medical Cannabis, and I think you’ll hear a lot this week in terms of some of the initiatives that we’re working on, to eliminate tax from medical cannabis.

These are non for profit entities that I sit on the Board of.

Ed Milewski:  You’re talking to other countries all the time, I guess, and looking at different approaches, different ways to sort of have a unified view of, you know, how this should be handled so that there’s not a lot of differences between countries.

Deepak Anand: Yes, absolutely. One of the things that I’ve been doing is working very closely with a number of different Federal governments, as a policy advisor, to kind of assist them in understanding sort of all of the implications of this. And I mean, the fact that, you know, we as Canada have been sort of the second nation and really the first G7 nation to legalize both THC and CBD in medical cannabis and non-medical cannabis in general, I think there is a number of lessons to be learned here, and I think that’s what we’re, when talking to new countries, that’s one of the things that sort of, you know, I advise them, is let’s not make the same mistakes that Canada has made.

I think there’s a lot to be learned from the Canada experiment, as I would call it, but there’s also some opportunities to create some new frameworks. And each of these countries has their own unique challenges, and they need to work within it. So that’s the interesting part.

Whilst all this is happening, I mean, you know, the whole United Nations just released a report, you know, by the WHO, which is the World Health Organization, that sort of called for complete de-classification or deregulation of CBD and removing it from any treaties.

So there’s, you know, a whole bunch of other things that are happening internationally on this pile that seem to be moving almost daily, and we’re seeing more and more countries, you know, daily almost, look at legalizing medical cannabis, so it’s quite exciting from that front.

Ed Milewski:  Sure.

Benjamin A. Smith: Okay, Deepak, I know the capital markets perhaps isn’t your primary focus, but I wanted to get your thoughts about the Canadian LP advantage, especially on the Tier One side, the Canopies, Aphrias and so forth. Now, there’s a line of thinking out there that believes that the Tier One Canadian LPs have a decided advantage internationally, because they’ve already set up shop, they have a different agreements in other countries like Germany, the UK and Latin America, as opposed to the multi-state operators down in America.

So do you consider this a big head start and a big advantage that the Canadian LPs on the capital markets side can parlay into against their MSO neighbours down south, who aren’t even really established internationally?

Deepak Anand: Yeah, absolutely. I mean, if you look at predominantly the European market, I mean, it is a medical cannabis market currently if you look at Germany, you look at the UK, you look at Greece, you look at, you know, a number of other European countries, they’re all currently going down or have gone down the medical path. And they require something called GMP, which is Good Manufacturing Practices; really only six companies in Canada currently have it. There’s a couple more that are currently going through the process, but it is a difficult process to go under, and I mean, it’s taken these six LPs that currently have this, a great deal of time to be able to get this GMP certification. It’s a higher quality sort of, you know, of a quality management system than the ACMPR regulations under which a majority of the Canadian Licensed Producers currently operate.

That program is called something at GPP, Good Production Practices, and then Good Manufacturing Practices is something that pharma companies follow. So really, these six companies have a global opportunity at the moment to be able to dominate the landscape, and they certainly are; we’re seeing a number of countries already start to export to Germany. I think this week we’ve seen, you know, today Aurora announced their first shipment to the UK; last week Canopy made a similar announcement. When you compare that, you know, to the US, I mean, you know, your question around, will we face sort of threat from the US?

I think that a number of US multi-state operators or MSOs have been operating, you know, sort of in absence of any federal regulations, and certainly haven’t been able to get this coveted GMP certification from Europe because, you know, you can only get GMP certification if your country actually has a federal framework. And because the US is absent on that and is still going to remain absent for quite some time on that, I think there’s a real opportunity for Canadian companies here to compete on the global scale.

Now keep in mind, you know, I don’t think the risk is necessarily the US or the threat is the US at this point; I’m paying very close attention to Israel. Israel was recently allowed to start to export medical cannabis, and you know, it’s something that has been stalled for very many years by their Parliament, but the government has finally given it approval. And a lot of the operators there, apparently, already have this coveted GMP certification, so for them to be able to export into the European markets is not going to be a significant challenge.

So you know, I don’t think the US is as much of a threat on the international side, but I certainly see countries like Israel and others that will get GMP sort of established being a threat to Canadian licensed producers.

Benjamin A. Smith: Wow, very interesting answer. Deepak, thank you so much for joining us on the program. We’ll talk to you soon.

Ed Milewski:  Thanks, Deepak.

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