Featured in: BUSINESS DAY 03 MAY 2022

Misplaced regulations and red tape hamper the local commercial value chain

Recently the New Zealand government announced that it had entered into a $32.2m joint venture project with the country’s largest medicinal cannabis grower, Puro, to fast-track the establishment of an organic medical cannabis industry in the country.

The project will see the government contributing $13m to help Puro develop unique cultivars and seed stock and, most importantly, a production handbook that will serve as a blueprint for the wider industry. The overall objective is to develop a value chain that will provide domestically sourced medicinal cannabis to local customers as well as facilitate exports to global markets around the world. This is clearly a major boon for the cannabis industry in New Zealand, where medicinal cannabis was legalised in 2017. Interestingly, cannabis for personal recreational use is still illegal there.

In SA we have the opposite situation. The private cultivation, possession and use of cannabis by an adult for personal, recreational use is no longer a criminal offence. However, there are a number of restrictive and misplaced regulations in place that are hobbling the local commercial cannabis value chain, including the manufacture of cannabis products and their sale locally and overseas. This is where billions of rand in revenue and thousands of new jobs could be created.

The department of agriculture, land reform & rural development estimates that the local cannabis market could be worth R28bn and create 10,000-25,000 jobs across the value chain over the next few years — if it is unlocked. With the recent Stats SA quarterly labour force survey for the fourth quarter of 2021 revealing that the official unemployment rate now stands at 35.5% (the highest since the start of the survey in 2008) it is critical that the government and the local cannabis industry work together to create an enabling environment for job creation and growth across the sector, in the same vein as the New Zealand government’s partnership with Puro.

However, to achieve this, the government needs to tackle the red tape that is impeding the sector in SA, in particular the medicinal cannabis sector. Perhaps most restrictive are the CBD dosage regulations contained in the Medicines Act. On May 22 2020, the health minister, acting on the recommendation of the SA Health Products Regulatory Authority, decided to change these regulations.

While CBD is generally classified as a schedule 4 substance, the following preparations of CBD substances were reclassified as schedule 0 substances:

Cannabidiol “in complementary medicines containing no more than 600mg cannabidiol per sales pack, providing a maximum daily dose of 20mg of cannabidiol, and making a general health enhancement, health maintenance or relief of minor symptoms [low-risk] claim”.
Cannabidiol “processed products made from cannabis raw plant material intended for ingestion containing 0.0075% or less of cannabidiol where only the naturally occurring quantity of cannabinoids found in the source material are contained in the product”.

While on the face of it this would appear to have been a progressive move by the government, the 20mg maximum daily dose restriction is illogical, has no rational or scientific basis, and is out of line with international regulations. Naturally occurring CBD is safe and well tolerated in humans (and animals) and is not associated with any negative public health effects, with oral doses of up to 800mg a day having been proven to be safe.

This was echoed in a World Health Organization (WHO) report that found no adverse health outcomes and several medical applications for CBD. The report states that CBD does not induce physical dependence and is “not associated with abuse potential”. It further notes that “unlike THC (the main psychoactive compound in cannabis), people are not getting high off of CBD, either”. The report concludes that “there is no evidence of recreational use of CBD or any public health related problems associated with the use of pure CBD. In fact, evidence suggests that CBD mitigates the effects of THC (whether joyous or panicky).”

The WHO has determined that CBD has been demonstrated as an effective treatment for epilepsy, and there is preliminary evidence that it can be useful for treating a number of other serious conditions, including cancer, psychosis, Alzheimer’s disease and Parkinson’s disease. It is for these reasons that countries across the world have approved much higher maximum daily dosage thresholds. For example, the Australian Therapeutic Goods Administration has approved low-dose CBD containing products up to a maximum of 150mg a  day.

However, despite the SA public health system being under severe pressure, with many citizens struggling to access treatment and medication, they do not have the alternative option of access to over-the-counter products that contain enough CBD to be of benefit to their health. This heavy-handed restrictive approach is also being followed by the government when it comes to foodstuffs and cosmetics containing cannabis, another missed opportunity for the local industry and the SA economy.

We therefore welcome recent announcements by government leaders on unlocking the vast potential of the SA cannabis industry. This includes President Cyril Ramaphosa stating during his annual state of the nation address that the government will address the policy and regulatory framework for industrial hemp, as well as KwaZulu-Natal premier Sihle Zikalala announcing that a provincial government cannabis committee is to be established to develop the sector in the province.

We hope SA’s cannabis master plan, published in 2021, will create more policy certainty and an environment that is conducive for the development and growth of the local cannabis industry over the longer term. However, the government could take some immediate steps to increase the competitiveness of the industry, in particular the medicinal cannabis sector, over the short term, while the longer-term policy framework is finalised and implemented.

Critically, the government should amend the Medicines Act to increase the 20mg maximum daily dose threshold of CBD to 150mg, for it to be classified as a schedule 0 substance. There also needs to be far more clarity on the disbursement and regulation of medical cannabis, including the opening of licensed dispensaries for medical cannabis products as well as the cutting of red tape that is preventing the movement of cannabis products within the country.

Goodleaf, SA’s first commercial cannabis operation, is committed to contributing towards the growth of the local cannabis industry and has already invested significantly in the sector, creating more than 100 jobs. With an enabling environment, the company plans to invest an additional R250m into the local industry over the next few years, which will create a further 150 jobs across the cannabis value chain.

We are also committed to working with the government to ensure an inclusive and responsible cannabis medicinal and recreational market, and have several proposals in this regard. For example, to ensure the inclusion, sustainability and profitability of small-scale cannabis growers in the Eastern Cape and KwaZulu-Natal, there should be a clause in the regulatory framework that stipulates that a percentage of inputs for the extract market are purchased from rural growers.

As a country, we have what it takes to make SA’s cannabis sector flourish. If the government and private sector work together to create a progressive and enabling policy and regulatory framework, nothing should hold us back.

Schewitz is founder and CEO of Cape Town wellness and lifestyle brand Goodleaf, which owns Highlands Investments, the largest exporter of medical cannabis in Africa.

The post WARREN SCHEWITZ: Immediate steps needed to ignite SA’s cannabis industry appeared first on Cannabiz Africa.

Billionaire and self-described free speech champion Elon Musk will acquire Twitter, Inc. according to an April 25 press release. The move will make Twitter private and set off a firestorm of speculation—ranging from whether or not Musk will allow Donald J. Trump to return, to the possibility of an edit button.

Twitter, Inc. entered into a definitive agreement to be acquired by an entity wholly owned by Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion.

Musk is the world’s richest person, according to Forbes and most other lists. Bloomberg estimates he has $3 billion in cash, give or take. Musk described $13 billion in bank financing secured by Twitter and the $12.5 billion backed by a pledge of Tesla stake, but it’s not clear how he’s going to come up with the remaining $21 billion to complete the transaction.

The billionaire is citing the move as a victory for free speech, while others disagree on the ethics of the deal and its implications for the future of social media.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Musk. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential—I look forward to working with the company and the community of users to unlock it.”

With 85.2 million followers and counting, Musk ranks number 8 in the list of the Top 10 Most Followed Twitter Accounts, trailing people like Justin Bieber and former president Barack Obama. He’s gained millions of followers just in the past week or so. But his use of the micro-blogging social media app has been scrutinized and analyzed. The Guardian criticized Musk’s use of Twitter, calling the relationship “chaotic and crass.”

Per the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter’s latest closing stock price.

“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Bret Taylor, Twitter’s Independent Board Chair said. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”

Parag Agrawal, Twitter’s CEO said, “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”

Elon Musk and Cannabis

Does the 420 in the share value sound familiar? On August 7, 2018, Musk tweeted he was mulling over taking Tesla private, quoting a price of $420 per share for the buyout.

He told the New York Times that he’s aware of how popular weed is, but he’s not sure how it could help productivity, to be candid. “It seemed like better karma at $420 than at $419,” Musk said. “But I was not on weed, to be clear.” That all changed a month later on a podcast appearance on The Joe Rogan Experience.

On September 6, 2018, Musk smoked a blunt on episode #1169 of The Joe Rogan Experience. Rogan himself became embroiled in the topic of free speech due to his Spotify fiasco, over concerns the podcaster was sharing information that wasn’t medically sound.

Due to the fallout of Musk’s many investments because of the blunt stunt, Jimi Devine asked for High Times, “Did Elon Musk smoke the most expensive blunt of all time?” Even Musk’s NASA-associated security clearances came into question.

With the power of Twitter at his fingertips, a lot could change in the world of social media, and inevitably, politics and free speech will intersect.

The transaction, which was approved by the Twitter Board of Directors, is expected to close in 2022, pending the approval of Twitter stockholders.

The post Four Years After Smoking Blunt, Elon Musk Buys Twitter appeared first on High Times.

Sales data was released by Akerna on April 26 in a flash report, which shared that the industry collected a total of $154.4 million in combined recreational and medical cannabis sales. Akerna reports that 2021 sales records previously held the record for most cannabis sales on 4/20.

In the weekend following up to 4/20 (April 15-April 20), retail sales varied greatly. The highest sales day, other than 4/20, was Friday, April 15 at $94.3 million, and the lowest was Sunday, April 17 at $38.9 million. The entire weekend netted a total of $485.3 million.

Akerna originally released a prediction report on April 12, projecting that cannabis sales on 4/20 would hit $130 million, and that total weekend sales would rise up to $494 million. The company’s projections were very close to early sales data. “Using our historical Akerna data, we released a prediction report that the period around 420 would bring in a total of $494 million, only –1.79% variance from the actual sales of $485.3 million,” said Akerna Business Intelligence Architect James Ahrendt. “This is a testament to the power of our data analytics. By leveraging data-driven insights, cannabis businesses can make strategic predictions and decisions for their businesses.”

Akerna was formed when MJ Freeway and MTech merged in 2019, but it was initially founded in 2010 in response to the growing need for software to support “visibility, data and analytics, and robust inventory tracking that the cannabis industry requires to be successful.” Akerna’s most recent data is defined as a “flash report” that “looks at buying trends in the cannabis market as captured by Akerna’s flagship solution, MJ Platform,” Akerna shared in a press release.

The success of this year’s cannabis sales is impressive. Akerna mentions that the Iowa Alcoholic Beverages Division reported that it had the largest year for liquor sales, having surpassed $400 million for the first time, and in that perspective, showcases the strength of the cannabis industry.

More data is soon to come, it remains to be seen if Akerna’s other cannabis-related predictions were also accurate. The company projected that the hierarchy of product popularity, starting at the top with flower (48.11%), followed by cartridge/pens (31.66%), concentrates (11.63%), edibles (6.87%), infused non-edible (0.71%) and non-medicated (1.01%).

By demographic, the company predicted that 59.93% of consumers would be men, with 40.07% women. In age ranges, most consumers would be between 30-40 years old (30.43%), under 30 (28.38%), 40-50 (19.92%), 50-60 (11.49%), and over 60 (9.78%).

This data is echoed across the board with other data analytic companies, such as Headset, which shared that sales in U.S. cannabis dispensaries were up by 148% on 4/20 compared to other days leading up to the holiday. Canada sales grew as well, as the average cannabis stores increasing in sales by 65%. Headset also noted that cannabis-infused beverages rose considerably by 110% in Canada and by 176% in the U.S. as the top performing category. The “second place” product was attributed to edibles in Canada (with 83% sales growth) and concentrates in the U.S. (with 155% sales growth).

Although most states have not released any preliminary sales data, Michigan’s Cannabis Regulatory Agency Director Andrew Brisbo shared some information about the success of his state’s 4/20 sales on Twitter on April 21. “Consumers purchased over 2.3 tons of marijuana flower in MI retailers yesterday. Initial data shows overall sales of flower on 4/20 in 2022 were up 242% from the same day in 2021 (which were up 444% vs 2020).” He also followed with an estimation of pounds sold in the last three years in Michigan: 2022 (4,619 pounds), 2021 (1,912 pounds) and 2020 (430 pounds).

The post New Record Set for 4/20 Sales, According to Data from Akerna appeared first on High Times.