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Docs, Stocks and Two Legal States

Doc’s, Stocks and Two Legal States

Medical Cannabis Industry Changing Rapidly

By Owen Smith


After the good news just before Christmas that the charges against me, relating to the V-CBC bakery incident in 2009, were dropped, and after successfully completing the trial in less than ten minutes and being acquitted, I am glad to say, a lot of pressure has been lifted from my shoulders. Predictably, the Harper government has appealed Justice Johnston’s ruling on the Voir Dire, asking to have his order removing the words “dried marihuana” from the MMAR set aside and for a new trial to be arranged. i

The appeal will take 2 days that lawyers are estimating will happen sometime around the end of this year. Around the same time, only a short ferry ride away, a monumental effort, the ‘New Approach’ of Washington State’s marijuana legalization initiative, will be open for business. In light of the regulations that Washington State plans to enact, the Canadian government could learn a great deal about how a properly regulated cannabis industry works.



I-502, in Washington, creates three cannabis licenses: Producer, Processor and Retailer. Producer licenses involve growing and distributing while Processors make cannabis infused products and Retailers sell all of this through a storefront. Individuals over the age of 21 will be authorized to possess up to one ounce of usable dried cannabis, 16 ounces of cannabis infused product in solid form; and 72 ounces (a 6 pack) of cannabis infused product in liquid form. 

The Washington State Liquor Control Board has been given until December 1st 2013 to create the procedures and criteria necessary to implement the I-502 legal cannabis initiative. The WSLCB have enlisted the services of BOTEC Analysis Corp. whose collective expertise covers “formalized cultivation and testing, quality standards, statistical modeling, policy analyses, dynamics of illicit markets, law enforcement, drug control, drug dependency economics and rule-making.”ii The WSLCB will be updating their website as the regulations are developediii.

BOTEC, based out of Massachusetts, is spangled with stars from the cannabis industry. A formidable team of pioneers have been collected for this historic task including the first CFO of Harborside Health Center (California’s largest medical cannabis dispensary), the president of SteepHill Labs (California’s premier testing facility), Former CEO of Bedrocan (Netherlands exclusive medical cannabis producers), a Nobel Prize winning economist, a former presidential advisor andthe list goes oniv. The team is lead by Dr Mark Kleiman, author of Marijuana Legalization: What Everyone Needs to Knowv.



Amendment 64, Colorado’s successful voter initiative, also regulates Cultivators, manufacturing and testing facilities and retail sales through licensed stores. Access is also restricted to those over 21 years of age. The Amendment defines cannabis as a whole, not arbitrarily isolating ‘dried marihuana’ like the MMAR/MMPR in Canada.


The department of revenue has until July 1st 2013 to adopt regulations for the implementation of the initiative. An implementation task force was appointed and have already produced a 166 page report of recommendationsvii. Colorado will begin to accept and process applications on October 1st 2013.viii

The possibilities in Colorado will continue to expand on July 1st, 2014, when the general assembly enacts legislation governing the cultivation, processing and sale of industrial hemp. The hemp is going to be grown as a controlled phyto-remediation study, to test hemps ability to clean and restore “mining-waste contaminated soils”ix.

These novel efforts by very serious, well educated people within the Washington and Colorado State governmental apparatus, as well as the suggestion by president Obama in an interview with Martha Stewart that “It would not make sense for us to see a top priority as going after recreational users in states that have determined that it’s legal”x, has many people seeing the long awaited dawn light crack over a shimmering green and gold horizon.

However, after decades of intensive prohibition, a crust of mistrust, compounded by the continued crackdown on medical cannabis facilities in states that have deemed them legal, persists between experienced cannabis experts and government agencies. Attention doesn’t stray long from the looming dark cloud of Federal law enforcement. Nonetheless, the movements’ growth is as vigorous as the plant itself.


In Canada

A recent announcement made by Canadian Olympic gold medal winner, Ross Rebagliati, of plans to open a state of the art cannabis dispensary in Whistler, BC, received national media attention. This air of excitement was soon sullied however when Health Canada’s spokesman, Mr. Outhouse, responded that dispensaries, like ‘Ross’s Gold’ would be illegal. “In its move to privatize distribution of medical marijuana in Canada, while ending the practice of letting individual users grow their own, the government envisions the establishment of licensed producers, who will ship [dried] marijuana to customers by direct mail”xi.

Besides mail order, the new MMPR (Marihuana for Medical Purposes Regulations) have proposed Pharmacists and Hospitals distribute dried marihuana. The CMA (Canadian Medical Association) and the CPA (Canadian Pharmacists Association) have been outspoken opponents of the proposed changes to the MMPR. The CMA assert that until clinical trials have been completed, the government is “asking doctors to write prescriptions while blindfoldedxii and the CPA fear being robbed.

Patients groups as well as some dispensaries engaged in nationwide protest (fightthemmpr.ca) during the recent consultation period, after being ignored during previous consultations. The cannabis community will do its best to adapt to the new proposed regulations, while contemplating the recent imposition of mandatory minimum sentencing for cannabis in Canada.


Business Interests

X-Change Corp. (NASDAQ OTC: XCHC), a U.S. Company specializing in Cannabinoid formulation-based health solutions through its Phytiva brand product lines, plans to develop and open cannabis medical treatment centers in Colorado, California, and other U.S. and international markets where existing law permits.” xiii

They have recently teamed up with the Maliseet nation in New Brunswick to build a legal cannabis growing facility, clinical laboratory, manufacturing and production facility, and state-of-the-art treatment centre which will compose a hospital. The treatment centre and clinical wings are connected to reception, lounge, kitchen, restaurant, retail, and dietary-advice spacesxiv

The Maliseet Nation has allocated 500 to 1000 acres of its reserve land for the project in the Agreement. Approximately 50 acres will be used for the location of the hospital facilities, laboratory, organic production facilities, treatment center, and multiple-unit accommodation campus for patients.  Further, initial cannabis grow operations will be implemented immediately with approximately 10 acres with a full potential of at least 300 acres for cannabis and 100 acres for hemp, as demand for medicines and treatments increase.xv

Phytiva currently makes a lip balmxvi, an ‘eczema moisturizing cream’, a sunscreen and an ‘anti-aging serum’, but more products are planned following projected clinical trials. As these formulations are skin products aimed to “enhance beauty and instil a sense of wellbeing” it is curious that they have announced this operation in Canada. Currently, and as a direct result of my trial last year, only MMAR patients in BC can make products that remove the plant bulk from its’ active chemicals. 

For the rest of Canada, until my case is settled in a higher court, the MMAR (and soon MMPR), does not allow for experimentation with cannabis products, for medicinal application, as doing such would make the active ingredient harder to recognize and quantify by law enforcement officials. So any new Phytiva skin creams developed under the existing regulations in Canada would likely need to be a thick green paste.

It’s important to note that press releases from publicly traded penny stock companies, like XCHC, often come with a disclaimer for ‘forward looking statements’. This says “Some or all of the events or results anticipated by these forward-looking statements may not occur.” This may be due to “the Company’s reliance on existing regulations regarding the use and development of cannabis-based drugs”. For Phytiva, these ‘forward looking statements’ include the assumption that the laws restricting medical cannabis patients and producers from making cannabis extracts, like Phytiva’s skin creams, will be struck down by the BC Court of Appeal and at a later time become law in New Brunswick.

In contest to this projection, I have been invited back to court on April 8th to address the one year delay that Judge Johnston placed on the restriction of Designated Producers to render edible or topical products for the person they provide medicine to. The delay is due to expire on April 13th 2013, but the government will argue to extend the delay until a decision is rendered by the BC Court of Appeal on the matter.

There is great hope that companies like XCHC; MJNA (Medical Marijuana Inc.); Rebagliata Gold Ltd. (Ross’s Gold) and others will help to quickly expand and transform society from one shadowed by cannabis prohibition to one elevated by radical cannabis inclusion. Businesses who aim to “be selling the bluejeans to the gold miners”xvii are now seeking investments from Wall Street to expand their hydroponic equipment, software development and dispensing technology businesses.


Honest marketing

It may be sooner than we think that in place of exaggerated negative claims made about cannabis through the media, we may become the target of expertly marketed positive cannabis media campaigns. As excitement mounts and new cannabis industry potentials become known, like ‘Ross’s Gold’, it is more important than ever for interested investors to be up to date on the latest news within the cannabis movement. Despite the headlines, until serious work is done changing the cannabis policy in BC and Canada, Ross’s Gold will stick to selling coffee and glassware.

The more important we consider cannabis medicinally, the better we ought to define our language so as not to be mistakenly misleading vulnerable individuals. Currently the arbitrariness of the MMAR leads individuals to use the most physchoactive and least healthy method of ingestion. Patients need not hastily repeat overbroad phrases like ‘Cannabis Cures Cancer’, when the scientific community may soon prove or disprove them. Scientists are careful to qualify their statements about cannabis, noting it as a “potential anti-cancer drug,xviii” that “inhibits angiogenesisxix” and exerts a “Chemopreventive effect in vivoxx”.

Member of the BOTEC team Dr. Donald Abrams commented on the phrase that, “as an oncologist, “cure” means five years of disease-free survival, so I don’t think we’ve come to five years beyond when people started first claiming this”xxi While cannabis has mountains of anecdotal and laboratory support, clinical trials are the gold standard to which the experts in Washington State and Colorado are soon to begin digging. When conclusive evidence is presented we will be able to settle the score once and for all, creating a ground breaking base of evidence for global cannabis policy change.



i Notice of Appeal R.v.Smith



ii Liquor Control Board Announces BOTEC Analyses Corporation as Marijuana Consultant



iii Washington State Liquor Control Board – I-502 Implementation



iv BOTEC Proposal



vDr. Mark Klieman Marijuana Legalization: What Everyone Needs to Know



vi Amendment 64: Regulate Marjuana like Alcohol. Section 2. (f) 



vii Amendment 64 implementation task force Final Report



viii Amendment 64, The Regulate Marijuana like Alcohol Act of 2012



ix Hemp Cleans Pilot Project Colorado



Obama discusses Marijuana Legalization 



xi Health Canada may stifle Rebagliati’s high-flying medical-marijuana plans



xii CMA decries new medical marijuana rules



xiii XCHC Announces Initial Planning and Development of Cannabis Medical Treatment Centres to Open in Colorado, California, and Other Friendly Markets across the Globe



xiv XCHC Provides Significant Operational Guidance on Maliseet Nation Partnership



xv Ibid. 


xvi Phytiva Lip Balm



xvii Wall Street sees opportunity in marijuana



xviii Cannabidiol as potential anticancer drug



xix Cannabidiol inhibits angiogenesis by multiple mechanisms



xx Chemopreventive effect of the non-psychotropic phytocannabinoid cannabidiol on experimental colon cancer



xxi Does Cannabis Cure Cancer?



Owen Smith
Owen has been writing for the Cannabis Digest since 2009, covering a wide range of topics related to medical cannabis. Owen’s articles are closely related to his constitutional challenge to legalized cannabis edibles extracts and oils. He is the founder of Ethical Growth Consulting www.ethicalgrowth.ca

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