The legalization of drugs also affects Wall Street and the pharmaceutical industry.
Cannabis or marijuana is the most consumed drug by far. In Europe, more than 24 million people use it, especially young people. This is revealed by the annual report of the European Monitoring Center for Drugs and Drug Addiction (EMCDDA), published in June. Almost three quarters, or 17.2 million of them, are between the ages of 15 and 34.
Even though its consumption can be addictive and cause damage to health (e.g. neuropsychological problems), marijuana is now so popular in the world, that in some countries of the planet it has been legalized as a “recreational drug.”
The first country to make both the production and sale of marijuana legal almost five years ago, in December 2013, was Uruguay; the president at that time was José Mujica. With the aim of combating the illegal trade in the well-known narcotic substance, the South American country decided to offer cannabis through a state monopoly at lower prices and even better quality than the drug dealer circuit.
Following in the footsteps of Uruguay just last June was Canada. Their Senate approved an “historic” measure on Tuesday, June 19, with 52 votes in favor, 29 against and two abstentions: Bill C-45 authorized, as of October 17, the consumption and production of marijuana.
With a “Yes” to cannabis, the legalization of which formed part of the 2015 electoral campaign of the current prime minister, Justin Trudeau, Canada became the first member of the G20 and G7 to open the door to the recreational consumption of marijuana. Since 2001, its medical or therapeutic use has already been authorized in Canada.
Situation in the USA
The situation in the United States is diversified, where nine states (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont and Washington) and the District of Columbia allow recreational use. While therapeutic use is permitted in 30 more states, marijuana use remains illegal at the federal level.
While in one state, Vermont, consumption was authorized by the state legislature, in other states the decision was taken by referendum, as in the case of California, where in November 2016 the “Yes” to Proposition 64 (or California Marijuana Legalization Initiative) got 57.13 percent support.
With the “Yes” in the State of California (40 million inhabitants) and in Canada (about 36.5 million inhabitants), it is estimated that the number of adults with access to legal marijuana will rise this month to about 75 million people, according to the calculations of the Spanish newspaper El País in an October 1 article.
Interest of the world of finance and “Big Pharma”
In the article, El País focused especially on the rapidly increasing interest in marijuana on the part of the world of finance and industry. According to the consulting firm Arcview, over the course of 2017 the world spent $9.5 billion on legal marijuana, a figure set to rise to 12.9 billion in 2018 and to 32 billion in 2022.
The recent decision of the Drug Enforcement Administration (DEA) to place Epidiolex®—the first cannabidiol-based medicine (CBD, a non-psychoactive component of Cannabis sativa) approved in June by the Food and Drug Administration (FDA)—on the Schedule V of drugs, that is, those with a minimum risk of addiction, raised the stock of the manufacturing company, GW Pharma, by 6.2 percent on Wall Street, writes the Madrid daily.
Another example is the trend in the stock market of the Canadian company Tilray, the first producer of medicinal or therapeutic marijuana to be listed on the Nasdaq. The stock, as El País recalls, made its Wall Street debut for $17; currently, its value exceeds $130 per share.
Even the beverage industry has risen on the marijuana train, so the daily suggests. In fact, the colossal Constellation Brands, which controls and distributes well-known brands like Corona and Casa Noble (tequila), announced in August that it will invest 4 billion dollars in the Canadian company Canopy Growth, active in the cannabis sector. In addition, Coca-Cola is studying the launch of drinks based on CBD, continues El País.
“Unwanted” effect of legalization
It therefore seems that the sector is in full swing. But paradoxically, the legalization of marijuana has had a negative impact on the situation of people in the state of Oregon who depend on cannabis to treat the symptoms of their diseases.
In Oregon, which was one of the first states in 1998 to legalize its use for therapeutic reasons, only three companies still prepare strictly medicinal marijuana, including PharmEx, founded in 2015 by Erich Berkovitz, who himself suffers from Tourette’s syndrome and treats his symptoms with cannabis.
While in 2016 there were 420 distribution centers for medicinal marijuana throughout the state, today there are only eight left, of which only one has Berkovitz’s products on its shelves, according to a report in the Guardian on July 31st.
In fact, many producers have decided to abandon the therapeutic cannabis market to launch themselves into the more lucrative one of recreational marijuana. This means that many patients are forced to turn to the black market, especially if they need preparations with a high THC content, the psychoactive principle present in cannabis. In fact, as a result of the rules introduced by the Oregon Health Authority, products on the legal market are too mild for those who are really ill.
The black market exists, even in Oregon, and this despite the legalization of marijuana. The cause of this paradoxical situation is the overproduction of cannabis in the state. Last February, there were 1.1 million pounds of cannabis flowers in the Oregon database, three times the amount purchased by state residents within a year. This means, the Guardian observes, that the surplus disappears from the regulated market.
In fact, there is no control over the various producers of cannabis plants in the state, as evidenced by an internal review carried out by the Oregon Health Authority, which manages the program of medicinal marijuana in the State. As the Seattle Times points out, only 58 of more than 20,000 medicinal marijuana growing sites were inspected at all in 2017.