Recently, the U.S. Department of Veterans Affairs (VA) changed its language on their website to suggest that the department is open to researching the effects of medical marijuana as a viable treatment option. On the VA’s website, a recent update suggests that research towards the benefits of medical marijuana for Veterans may finally be opening up.
The VA is seeking to clarify its position pertaining to the VA and marijuana. According to the VA Website, they understand that several states have approved marijuana use for medical use. They also reiterate that marijuana and all derivative products are still classified under federal law as a Schedule One controlled substance. Therefore, it is still illegal under federal government laws.
What Does the FDA Have to Do With the VA?
Since the U.S. Department of Veterans Affairs is mandated to follow all federal laws and the Food and Drug Administration still classifies marijuana as a Schedule One drug, VA doctors and health care providers are not allowed to recommend it or prescribe it to veterans.
However, they are allowed to discuss marijuana use with their patients as part of an overall care plan. This is where the “waters get murky.” The VA states:
- Veterans are still allowed access to VA benefits when marijuana use is reported to their healthcare provider.
- These same Veterans are encouraged to discuss all drug use with their providers.
- The provider will record marijuana use in the veteran’s record as a means to help with treatment planning.
- Clinicians at the VA may not recommend medical marijuana.
- Clinicians may not provide any paperwork for Veterans to allow participation in state-approved marijuana programs.
- Pharmacies at the VA are not to fill any prescriptions for medical marijuana.
- Funds from the VA will not be used to pay for medical marijuana prescriptions.
- Any state laws regarding the possession of marijuana are not in effect when on VA grounds. The VA is a federal facility and federal laws govern any federal facility.
In addition, Carolyn Clancy, M.D. Executive in Charge, emailed a directive to employees of the VA on December 15, 2017, to provide clarification on the VA’s stand on medical marijuana. Some items in the directive include:
- Reason – The Veterans Health Administration (VHA) directive is to provide guidance on access to VHA clinical programs for all Veterans who participate in State-approved marijuana programs.
- Summary of Major Changes – The major change in policy is to add additional support to the Veteran-provider relationship when discussing the impact on health and use of marijuana for any Veteran-specific treatment plans.
This language gives hope to medical marijuana advocates that the VA is finally opening up to investigating the effects of medical marijuana on health problems faced by Veterans, including post-traumatic stress disorder (PTSD).
Marijuana Moments Tom Angell originally reported the change by the VA’s Office of Research & Development. Their website refers to earlier research on medical marijuana saying that in their review they “found limited evidence” where marijuana use helped reduce pain in some patients. In addition, it found that medical marijuana “might reduce spasticity associated with multiple sclerosis,” but found little evidence to determine the direct effect of marijuana on PTSD. VA doctors are not currently able to prescribe medical marijuana to Veterans, but they can look at marijuana as an option in treating medical problems faced by Veterans.
This leads many in the healthcare and marijuana industry to have hope in one day using medical marijuana as a possible treatment option for suffering Veterans. However, this new stance directly conflicts with VA Secretary David Shulkin’s recent letter that announced there would be no agency research on marijuana due to its federal classification as a Schedule I substance.
Shulkin’s letter was in direct response to a request for clarification made by the House Committee on Veterans Affairs. The U.S. House members want the VA to begin investigating the potential effects of medical marijuana for veterans who suffer with chronic pain and PTSD. Representative Walz, ranking member of the House committee said that Shulkin’s response to their request was “disappointing and unacceptable.”
He went on to say that the VA did not answer their “simple question,” but that they also made an attempt to mislead the committee by claiming, “without citing any specific law, that VA is restricted from conducting research into medical cannabis, which is categorically untrue.”
It seems as if Shulkin has been caught pointing the finger at the FDA for the VA’s lack of interest in researching the benefits of medical marijuana for Veterans.
Pressure Towards the VA Mounts
A recent poll, funded by the American Legion, found that more than 9 out of 10 military veterans desire additional research into medical marijuana and its benefits in treating ailments faced by veterans every day. The new poll by the nation’s largest veterans service organization shows:
- More than ninety-two percent of veterans who support the expansion of research into medical marijuana
- Eighty-three percent of veterans believe that medical marijuana should be legalized by the federal government
- Over eighty percent also favor allowing VA doctors to recommend medical marijuana to their patients
American Legion spokesman, Joe Plenzler, told The Cannabist, “We already know that greater than 80% of the American public supports research into the efficacy of medical cannabis. What this survey shows is that America’s veterans feel even more strongly about the need to study cannabis and its potential in treating PTSD, chronic pain and other ailments veterans face every day.”
How the House Committee on Veterans Affairs is Helping
The 10-member group who sit on the House Committee on Veterans’ Affairs, is currently urging the Trump administration to study the benefits of medical marijuana for military veterans. Congressman Tim Walz (D-MN) understands the importance of medical marijuana research and how access has become a critical issue to veterans.
The House Representatives who joined Walz in urging President Trump to act include:
- Mark Takano (D-CA)
- Julia Brownley (D-CA)
- Ann McKlane Kuster (D-NH)
- Beto O’Rourke (D-TX)
- Kathleen Rice (D-NY)
- J. Luis Correa (D-CA)
- Gregorio Kilili Camacho Sablan (D-MP)
- Elizabeth Esty (D-CT)
- Scott Peters (D-CA)
In response, Congress passed a defense bill in December that opened the door for medical marijuana to be approved by the Department of Defense. President Trump signed HR-2810 into law on December 12 which gives the Department of Defense the authority to approve any medical devices or drugs for members of the armed forces, stepping on the toes of the FDA.
Many states have already passed recreational marijuana laws and many more are considering passing legislation this year. For example, fifty-seven percent of Michigan voters are in favor of legalizing recreational marijuana.
Michigan Voters in Favor of Legalization
TV station WDIV Local 4 and the Detroit News conducted a survey that asked Michigan voters whether they were supportive of a proposal to legalize marijuana in their state.
The poll found that 56.6% of voters supported the proposal, 36.7% opposed it, and 6.7% were undecided. With the voters who supported and opposed legalization, there were subgroups within the supporters and detractors with regards to their level of support.
- Almost thirty-eight percent strongly supported the proposal
- Twenty-nine percent strongly opposed the proposal
Party lines have some influence on how voters believe:
- Those who identify as strong Democrats support legalization overwhelmingly with 71.5% in favor of legalization
- Those who lean toward Democratic beliefs support legalization by 675
- A little over half of Independents (51.1%) support legalization
- Voters who lean toward GOP support legalization with 44.7%
- Even strong GOP voters still support legalization with 43.5%
Surprisingly, the greatest indicator on a voters’ position is not party affiliation, but rather on past behavior. Forty-seven percent of voters polled stated they have smoked marijuana while forty-nine percent said they have not.
- For voters who have tried marijuana in the past, 72.7% were in favor of legalization
- For voters who have never tried marijuana, only 40.6% were in favor of legalization
However, with fifty-seven percent of Michigan voters admitting that they were in favor of some measure to legalize recreational marijuana, it seems that Michigan is heading toward a vote sometime this year. The Michigan Regulation and Taxation of Marihuana Act is likely to come to Michigan voters in November.
The Michigan Regulation and Taxation of Marihuana Act
The ballot measure proposes establishment of a statewide commercial marijuana production and sale licensing program. Adults 21 years old and older may possess up to 2.5 ounces of marijuana for personal use. They would also be able to grow up to 12 marijuana plants at home.
In addition to growing plants for personal use, there would be state-approved dispensaries. A 10 percent excise tax and 6 percent sales tax would accompany any sales from these dispensaries with the proceeds going to K-12 public schools, road construction, and local governments. Each local government would be given the option to allow marijuana businesses in their communities.
In addition to marijuana, hemp is part of the discussion for legalization. Hemp, a low tetrahydrocannabinol (THC) cannabis plant used for cultivation, is used to make textiles, food, clothing, and cannabidiol (CBD) hemp oil. Legal in all 50 states, CBD oil is already used by many people.
In order to secure a spot on the upcoming general election ballot, 252,523 signatures were needed. Last November, 363,000 signatures were submitted by the Coalition to Regulate Marijuana Like Alcohol. However, Michigan’s secretary of state has not yet approved the measure formally.
The Coalition to Regulate Marijuana Like Alcohol gains support from both national and local advocacy organizations such as:
- The Marijuana Policy Project
- The National Cannabis Industry Association
- The ACLU of Michigan
- The Drug Policy Alliance
- Michigan NORML
- The National Patients’ Rights Association
- MI Legalize
If passed in November, Michigan would be the tenth U.S. state to legalize recreational marijuana. As one of the 29 states to already have legalized medical marijuana, Michigan seems to be in step the with direction of U.S. voters.
Other States Considering Marijuana Legalization This Year
Michigan is not alone in putting forth marijuana legislation in 2018. Other states include:
- Vermont – In early 2018, Vermont lawmakers moved to approve recreational marijuana. Governor Phil Scott signed the law into effect January 22 of this year.
- New Jersey – Governor-elect Phil Murphy has pledge to sign legislation for adult use marijuana within his first 100 days in office. Although, this depends on a Democrat-led Legislature sending the new governor a bill to sign.
- Delaware – A 25-member panel called the Adult Use Cannabis Task Force is expected to release a report in February evaluating the impact of legal cannabis in the state.
- Rhode Island – As neighboring states Main and Massachusetts have implemented their own policies, Rhode Island lawmakers are hoping to have some type of legislation passed on recreational marijuana before July 2018.
- Connecticut – In 2017, the Hartford City Council approved legalizing recreational marijuana. Although this was a symbolic move, it was hoped to spur conversation in the statehouse of legalization.
- Ohio – Responsible Ohio, a group campaigning to legalize recreational marijuana, is currently collecting signatures for a ballot proposal for 2018.
- Oklahoma – Depending on Governor Mary Fallin’s decision, Oklahoma voters will get to decide whether to legalize medical marijuana in June or November.
- Kentucky – Secretary of State Alison Grimes is pushing legislation aimed at legalizing medical marijuana in her state. She created a task force to draft the bill that aids veterans and patients who suffer from severe illnesses.
- South Dakota – Currently, the secretary of state in South Dakota is reviewing collected signatures for a ballot imitative for limited medical marijuana legalization. Results are expected in March allowing voters to decide whether medical marijuana would be legalized in their state.
- Utah – Currently, activists in Utah are gathering signatures of a 2018 ballot initiative to approve medical marijuana. By April 2018, organizers need 113,000 in order to get the initiative on the ballot.
- Missouri – New Approach Missouri currently has 100,000 of the 170,000 signatures needed for a ballot initiative to legalize medical marijuana. There are two other initiatives backed by former state lawmakers that are also in the works.
With so many states changing their laws pertaining to recreational adult use and medical marijuana, the face of the United States is changing from red and blue to green. Democrats, Independents, Republicans, men, and women are in support of change in their state. Is your state included?
The demand for recreational marijuana has increased considerably. Most industry observers predict that there will be a recreational marijuana shortage in 2019. What is causing this shortage?
Supply and Demand
Health Canada, the department responsible for issuing production licenses for marijuana growers, more than doubled the number of production licenses in 2017. Unfortunately, this has not balanced the supply/demand ratio. Regional supply imbalances in provinces that only allow sales through government-run retail outlets and unmet cultivation targets from producers are thought to be the culprit.
Often, what is on paper does not pan out in real life. This is true for the Canadian marijuana industry. The amount of paid-for production capacity is more than enough to meet demand for 2019. In fact, companies have been spending hundreds of millions of dollars in order to boost production.
The Marijuana Policy Group
A Denver based company called the Marijuana Policy Group (MPG), has provided analysis and policy advice to the Canadian government and private clients. They found that Canada’s publicly traded licensed producers have funds available to produce 1,370 tons of cannabis for this year and the next. MPG believes that this supply is actually three times more than needed to serve the legal cannabis market in the coming year.
The supply and demand problem leads to two key questions:
- How much of Canada’s 992 tons of black market marijuana can it bring into the legal market in the next two years?
- How successful will producers be in meeting their cultivation targets?
MPG predicts that Canada will take approximately 40% of the recreational cannabis black market share. This equates to almost 400 tons of marijuana in the first year. For producers, this means that they only have to meet 35% of their cultivation capacity in order to meet market demand, MPG estimates.
According to Miles Light, co-founder and partner with MPG, “Licensed producers are well capitalized in Canada, making it easier for them to ramp up production in the first year. Supply may be limited initially but should ramp up sharply after a few months…Legal demand won’t be 100% of the market. Some portion of that will be supplied by home growing, and some is going to be supplied by the same black market that exists today. Then you have what’s being already supplied in the medical market.”
Currently, Canada’s licensed medical cannabis production is almost 83 tons per year.
Where Is the Cannabis Shortage?
MPG predicts that any shortage of cannabis will not be from production and cultivation of cannabis, but rather from market distortions. Retails and wholesalers who sell the marijuana after it is produced are thought to be responsible for the market shortfall.
Light predicts, “You’re unlikely to have a systematic shortage or bottleneck in cultivation, but there may be bottlenecks further down the supply chain, especially in distribution and retailing.”
What is the reason for this “bottleneck” effect? Provinces such as Ontario and Quebec have opted for government-run retail monopolies creating a shortage of sales outlets. Ontario and Quebec account for two-thirds of the overall population in Canada. Even with this large percentage, there will only be around 70 adult-use marijuana outlets in 2019. In comparison, there are 1,066 government-run liquor stores and 250 illegal marijuana dispensaries in these two provinces.
Regional market imbalances may be seen regionally. Some areas may have too much marijuana and other areas may not have enough. In contrast, provinces that allow for private-sector retailors will see many entrepreneurs help the bottleneck by opening outlets with a larger selection of products and a wider range of prices. According to Khurram Malik, partner with Jacob Capital Management in Toronto, regional retail networks will be key in alleviating the bottleneck in distribution.
This equates to an inventory surplus in the market before there is excess supply. According to Malik, if there are only 50 stores in Ontario when 500 are needed, there will be an “inventory glut” before the market sees any supply surplus. This surplus will benefit smaller producers, who will be able to produce at a higher utilization rate.
The Big Picture
The larger issue is going to be the variety of products available for sale. What are consumers going to demand? What are they willing to buy? Will the products sold in the regulated markets satisfy the demand of consumers?
The initial in-demand strains of marijuana, which includes edibles, will not be a part of the initial legalization rollout. President of the Cannabis Commerce Association of Canada, Ian Dawkins, explains it best by comparing cannabis sales to alcohol sales.
He surmises that a government run liquor store would not be very successful if it only sold three kinds of rum. Instead of settling for a limited choice, Canadians would be “lining up at the border to ship in the U.S.” Dawkins is a principal consultant of British Columbia-based Althing Consulting.
He also predicts that the best way to approach the supply problem is to quit focusing on total weight. Instead, he believes that the shortage will be in particular sub segments that larger licensed producers (LPs) do not understand.
Some LPs, however, are attune to market demands. Canopy Growth, a major licensed producer that trades on the Toronto Stock Exchange under the symbol WEED, is offering a diversified product offering by recognizing that the demand will not be for one particular product, but a wide variety of marijuana products.
This means that successful companies must offer cannabis varieties grown by a diverse set of producers. More customers are attracted to a store when there is a wide variety of products for sale. This holds true in all retail outlets across every type of product sold.
Therefore, in order to meet the high demand for recreational marijuana, Canada must:
- Ensure that there is adequate production of marijuana to meet market demand
- Allow for private companies to fill in for government run shops when there is an area that has bottlenecked
- Lift restrictions on private companies to allow them to compete in all provinces
- Offer a wide variety of products by resourcing from many different producers
- Listen to market demand and adjust as needed
Canada stands on the precipice of recreational marijuana legalization. Ensuring that all Canadians have access to and choice of recreational marijuana will determine how successful it will be.