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GW Pharmaceutical’s Shot Across the Bow of America’s Hemp and CBD Industries

Prior to authoring this article, I have never viewed big pharma as a threat to the U.S. state-licensed cannabis industry. The sudden change in my attitude is because of actions that GW Pharmaceuticals (GWPH) has taken in Nebraska and South Dakota. Yes, Nebraska and South Dakota!

 

In December, United Kingdom-based GW Pharmaceuticals announced the formation of an operating unit in the U.S., Greenwich Biosciences, Inc. At the time I wondered why GW Pharma didn’t name their new subsidiary with a name tied-to its corporate name, such as GW Pharma USA. It’s now becoming clear that GW’s decision was likely made to take the future heat off of GW itself, and instead, let the unknown new company Greenwich Biosciences, take the fallout for what was going to come.

 

I don’t see conspiracies lurking everywhere. But GW Pharma’s actions through Greenwich Biosciences are a threat to America’s new and fast-growing hemp and CBD industries. I haven’t noticed any national cannabis or hemp policy groups or patient advocates that have been aware of GW’s strategy, so the company’s actions are definitely flying under the radar screen. Up until now, GW has been able to hide behind its front company, Greenwich Biosciences.

 

GW has very quietly, and one could say covertly, hired lobbyists and managed to have bills introduced in the Nebraska and South Dakota legislatures. If passed by the legislatures and signed into law, these bills could have significant implications for the legality and availability of CBD products in those two states. The two bills, which are essentially clones of each other, would give GW a monopoly for the sale of products that include CBD in those states.

 

Why Nebraska and South Dakota when neither state allows medical cannabis? I think it likely that GW selected these two states precisely because there is no state sanctioned cannabis industry. GW’s thought process being that legislative action would occur quickly and with minimal scrutiny due to the lack of any organized protest by Nebraska and South Dakota cannabis caregivers and patients.

 

The South Dakota bill, SB 95, had its first committee hearing last week. The bill exempts CBD from the state definition of marijuana and moves it under state law, from a state-designated Schedule I drug to a Schedule IV substance.

 

What’s critical for GW is that these bills only affect drugs that contain CBD that have received federal approval by the FDA. Epidiolex is currently the only plant-derived CBD drug that is within the realm of obtaining FDA approval. It’s clear that GW, through Greenwich Biosciences, wants to be the sole option for patients in those states and have a monopoly on the sale of products containing CBD.

 

Interestingly, GW has also engaged registered lobbyists in at least nine other states. It would appear that the company plans to seek the introduction of similar legislation in those states as well.

 

As initially reported by the website Leafly, Greenwich Biosciences has engaged the well connected California-based lobbyist Kurt Sternbridge, to handle the states of Arizona and Idaho, with implications that he may be the lobbyist in California as well. In Wisconsin, the company hired the lobbying firm, Martin Schreiber & Associates. In Florida, Douglas Russell, a former top official with the state’s health care industry was engaged and in Washington State, Stephen J. Buckner was hired. In Minnesota, the company retained Randy Morris.

 

Neither GW Pharma nor Greenwich Biosciences has made any announcement, nor is there any mention at the companies’ websites about the Nebraska and South Dakota bills, nor the hiring of the lobbyists.

 

It’s clear that GW’s lobbyists were instructed to act now, before the approval by the Food and Drug Administration (FDA) of the company’s drug, Epidiolex for Dravet Syndrome, a rare form of childhood epilepsy.  Epidiolex is a plant-derived, CBD-based formulation that is currently completing Phase 3 trials under FDA protocols. FDA approval for Epidiolex could happen as early as this summer. Epidiolex is also undergoing FDA trials for Lennox-Gastaut syndrome.

 

The obvious question is why GW chose to take this approach when it has two other pathways available to monopolize the U.S. market for CBD formulations.

 

Upon the FDA approval of Epidiolex, with its active compound, CBD, it precludes the use of that compound for other “non FDA approved” health or medical purposes. Then the FDA could issue cease and desist orders to anyone selling products containing CBD for health, wellness, or medical purposes. This FDA action could include companies selling products containing CBD in state-licensed marijuana businesses as well as companies selling the products in stores or online. After approval by the FDA of Epidiolex, the company can also wait and see if the agency takes action against sellers of products including CBD.

 

GW also has another arrow in its quiver and that arrow is that it holds a significant number of patents as well as a number of applied for patents.  Once Epidiolex is approved by the FDA, and when there is a commercial reason to do so, GW could start threatening legal action against any company infringing on its patents or selling any product containing CBD.

 

GW’s strategy may be seen by its board and management as a brilliant move. It takes the pressure off of GW and lays the blame at the feet of the states that pass the legislation. It avoids the probable uproar and protest from current patients, families and caregivers. Most importantly it gives GW a monopoly on the product.

 

It is probably that GW assumes that the hemp and CBD industries are so fragmented and disorganized that they will pose almost no threat to this legislation. The patient and caregiver population are of little concern because they are unlikely to be able to organize a grassroots campaign to take on a multi-billion dollar company.

 

The bottom line, if America’s hemp and CBD industries want to continue to exist, they must take GW’s shot across the bow seriously.  

 

 

Author: Jeffrey O. Friedland (www.jeffreyfriedland.com jeffrey@jeffreyfriedland.com)

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