Week in Review: CBD’s global nod, Ohio MMJ developments & Denver social use

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An international health organization determines that CBD shouldn’t be a scheduled drug, Denver sees its first applicant for a public consumption club, and Ohio’s medical marijuana licensing process comes under fire.

Here’s a closer look at some notable developments in the marijuana industry over the past week.

Big CBD endorsement

CBD got its most important affirmation yet when the United Nations’ World Health Organization (WHO) announced that cannabidiol shouldn’t be a scheduled drug because it has such a low risk of abuse.

Even more important, the health agency says it plans to review all forms of cannabis in May.

“If we are looking for the first step toward the end of global prohibition on cannabis, this is it,” said Michael Brubeck, founder of Centuria Natural Foods, a Nevada-based company that processes CBD and grows hemp in Canada and the European Union.

The WHO’s decision carries no rule of law, but the health agency is enormously influential.

It regularly reviews new drugs and suggests how its 60-plus member nations should regulate them. Member nations include the United States, whose Food and Drug Administration submitted CBD comments this fall.

Could the WHO’s recommendations on CBD – and maybe marijuana next year – influence American drug law?

Absolutely, says Brubeck, whose company is among those suing the U.S. Drug Enforcement Administration for declaring CBD a controlled substance.

“By having a global organization tied to the UN claiming that a cannabis derivative not only has zero potential for abuse but also poses no health risks, this statement defuses the rationale behind keeping cannabis a Schedule 1 substance in the U.S.,” Brubeck said.

Social-use pioneers

If the owners of The Coffee Joint are successful in their bid to land a public consumption permit in Denver, they could pave the way for the industry as a whole.

“Right now it’s up to places like The Coffee Joint to be the guinea pigs and work out the kinks,” said Jeffrey Zucker, president of Green Lion Partners, a Denver-based cannabis consultancy. 

The city’s requirements for social-use applicants have been characterized as restrictive enough to dissuade businesses from applying.

It remains to be seen whether the license will be worth the hassle for The Coffee Joint’s proprietors, who also own an adjacent recreational and medical marijuana dispensary.

“In theory,” Zucker said, “I like the idea a lot of a dispensary being able to send customers somewhere to consume if they don’t otherwise have a safe place.”

There are good opportunities with this permit, such as opening opportunities for cross-promotion and increasing awareness of a marijuana brand.

For example, a cannabis customer could buy a pre-roll or vape pen at a retail outlet and consume it at the coffee shop – and get a discount on a beverage or pastry.

It also works the other way: Cannabis brands can market themselves at the coffee shop to attract a casual consumer into a dispensary or retail shop.

Other states are waiting to see how this plays out.

Cannabis businesses in Las Vegas, with its more than 40 million tourists a year, would like to give marijuana customers a place to consume, since it’s illegal to do so  in casinos or hotels.

And they’re watching Denver to see if such a program can work.

Ohio hiccups

Controversy over Ohio’s medical cannabis cultivation licensing process appears to be threatening the slated autumn rollout of Ohio’s new MMJ market.

At least one lawsuit has been filed by a losing applicant, and more are likely on the way.

“It’s highly possible” that more suits against the state regarding the licensing process are on the way, said Brian Wright, executive director of the Ohio Cannabis Association.

“It wasn’t just a case of one or two applicants that said, ‘No fair,’” Wright added. “From what I’m hearing, this has been much more extensive than that.”

Litigation could have any number of possible results, but one of the most likely is a delay in the launch of Ohio’s MMJ industry.

And a delay is even more of a possibility since the recent news of conflicts involving two consultants hired by the state to help score cultivation applications.

“Delays are certainly the greatest concern,” Wright said. “It’s disappointing to see that the process has been handled in a way that seems to be inviting all of these challenges.

“From what I see unfolding, I don’t see this being resolved any time soon.”

However, Wright said he’s still “optimistic” the industry can be up and running by next fall as required by state law.

He noted that several licensees are “moving forward and already breaking ground. And that’s a positive step.”

Also this week, a new push for recreational MJ legalization in Ohio in 2018 was unveiled.

Wright said the backers – who were also behind the ill-fated 2015 ResponsibleOhio campaign – may have a much better chance for success this time around.

“I think it’s a very different effort from 2015. From an industry perspective, full personal use is important. Everyone knows what that means,” Wright said, alluding to immensely increased sales numbers and far more business opportunities.

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Kristen Nichols can be reached at kristenn@mjbizdaily.com

Bart Schaneman can be reached at barts@mjbizdaily.com

John Schroyer can be reached at johns@mjbizdaily.com