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Big Pharma reportedly loses billions every time a state legalizes weed



A recent study found that legalizing cannabis can cost pharmaceutical companies billions in sales and market share. Here’s why.

New data shows that when a new state legalizes medical or adult-use cannabis, pharmaceutical companies operating in that state take a significant hit on the stock market.

For the study, researchers compared stock return data from 45 major “legalization events” across California, Oklahoma, Michigan, Mississippi, and Virginia between 1996 and 2018, and defined a “legalization event” as “the day that the state governor signed cannabis (legalization) or voters approved a ballot initiative to legalize access to cannabis, either medical or recreational.”

The findings reveal that the legalization of cannabis in those states coincided with a 1.5-2% drop in stock prices for giants like Purdue Pharma and Pfizer, among others, which amounts to roughly $3 billion in lost sales and nearly $10 billion in market share losses for the industry as a whole.

After analyzing stock market data recorded in the immediate aftermath of cannabis legalization in legal states, researchers observed a statistically significant drop in the returns of major drug companies. The study’s authors said the trend “persists during the 20 business days following” legalization, resulting in market share losses worth billions, and a decline in post-legalization sales for Big Pharma.

Here’s what the new data tells us

cannabis opioids
When faced with the choice between opioids and cannabis, many medical patients are going green. That doesn’t appear to bode well for pharmaceutical companies. (Leafly)

The study’s authors estimate that full federal cannabis legalization could result in an 11% reduction in sales of conventional pharmaceutical drugs.

The University of New Mexico’s Economics department conducted the study with help from the Finance department at California Polytechnic State University. Ziemowit Bednarek and Sarah Stith are the authors credited for the report, which is titled “U.S. Cannabis Laws Projected to Cost Generic and Brand Pharmaceutical Firms Billion.”

Bednarek and Stith also note that the legalization of adult-use cannabis impacted Big Pharma more than twice as much as that of medical marijuana during the 1996-2018 time period.

The study also suggests that pharmaceutical companies invest in the legal cannabis market instead of advocating against federal legalization. Still, most major companies have taken a different approach that veers away from legal cannabis altogether

Some companies are lobbying against legalization

Purdue Pharma and Pfizer are two of many pharmaceutical giants that are actively fighting against federal cannabis legalization. In March, Purdue paid $6 billion to settle lawsuits over its role in fueling the opioid epidemic.

Purdue Pharma and Pfizer are both members of the Community Anti-Drug Coalitions of America (CADCA), which also includes newspaper conglomerate Gannett, the NFL, which boasts the world’s most valuable sports team, and a handful of healthcare and pharmaceutical companies that oppose legalization.

Black Cannabis Magazine visualized the list of partners in a graphic that went viral this summer, pressuring the CADCA to remove the partners’ names from its website. Although Pfizer lobbies against legalization, the company  is also investing in the weed industry—and its support of federal prohibition may be in alignment with its  business interests.

In December of 2021, Pfizer announced the $6.7 billion acquisition of San Diego-based Arena Pharmaceuticals. The biotech company, which already operates a drug pipeline focused on cannabinoid-related therapeutics, could provide Pfizer with a smooth entry into the legal industry.

Resisting federal legalization could also be Pfizer’s attempt at keeping licenses limited and competition scarce as it commits more resources to Arena and other cannabis-adjacent ventures. Many multi-state weed companies continue to lobby against federal and state legalization measures that compromise their current dominance over limited license markets.

Here what Big Pharma stands to lose from legalization

When faced with the choice of weed or pills, many patients are choosing the latter. (AdobeStock)

The Big Pharma stock study concluded: “The average change in a firm’s market value per legalization event is $63 million with a total impact on market value across firms per event of $9.8 billion… Using the historical price-to-sales ratio of drugmakers for the year associated with each legalization event, this implies a change in annual sales across all drugmakers of $3 billion per event.”

With the opioid epidemic surging in recent years, the reality of patients who will pay for high-priced weed before taking free pain pills can’t be ignored.

Consider Chris Goldstein, a NORML advocate who has been tweeting through a serious leg injury. Chris’ tweets illustrate exactly why Big Pharma fears expanded access to medical or recreational weed. “They tried to give me oxycontin, for free,” Goldstein wrote online in August. “Instead I’m paying out of pocket to treat my pain with cannabis.”

When you put it like that, Big Pharma’s fears surrounding the end of cannabis prohibition could become a reality, and Americans who want to see the end of widespread opioid abuse and Big Pharma’s role in the crisis make a strong case for supporting legalization in all state and federal jurisdictions.

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federal prohibition

Pennsylvania’s Fetterman has smoke for Biden over weed reform




The President hasn’t lived up to campaign promises about cannabis legalization. Will this larger-than-life Senate candidate finally hold Biden to his word?

Pennsylvania Lt. Governor John Fetterman built his political career on an unconventional image. He’s championed social issues like cannabis reform and is currently on the forefront against conservative-spun myths about the harms of legalizing weed.

So it’s only right that the US Senate candidate leads the charge against President Joe Biden’s glacial movement on federal prohibition. Joe promised that and more in his 2020 campaign. But he hasn’t come through on those commitments in any significant way. Despite saying in July that “no one should be in prison for marijuana.”

In a Monday press release, Fetterman made clear he’ll be pressing the chief commander about his unfulfilled promises when he visits Pennsylvania for Labor Day. And Fetterman doesn’t intend to let the President deflect attention from his inaction any longer.

“It’s long past time that we finally decriminalize marijuana… The president needs to use his executive authority to begin descheduling marijuana…I know firsthand what real crime looks like. Marjiuana does not fit the bill. It’s time to end the hypocrisy on this issue once and for all.”

John Fetterman

Biden’s appearance in the PA cities of Wilkes Barre and Philadelphia will involve speeches on combating rising crime statewide and protecting Americans’ rights and freedoms, reports The Hill. Despite his 2020 campaign promises to decriminalize marijuana and expunge prior convictions, cannabis remains a Schedule I substance 18 months later, and thousands of Americans still sit behind bars on nonviolent cannabis charges.

Andrew Sidman, the John Jay College of Criminal Justice political science department chair, told Politifact that “criminal justice reform is not a place where the President is going to try to spend political capital,” while he focuses on COVID-19, the recession, and his Build Back Better legislation.

That doesn’t sound promising to those holding their breath for federal prohibition to end anytime soon.

It’s high time to legalize PA, too

(Marc Levy / Associated Press)
(Marc Levy / Associated Press)

In a report compiled by NORML, an average of 38 cannabis-related arrests were made each day in Pennsylvania in 2021. While the state has legalized medical marijuana, possession of any amount of cannabis and/or concentrates can result in a $500 fine and/or 30 days in jail. And the limited license opportunities in the medical market mean higher prices and limited supply for PA’s medical marijuana patients.

Fetterman has been described as the “nation’s most outspoken pro-weed politician” for his staunch, and expletive-laden support for cannabis reform dating back to his years as mayor of the steel town Braddock, Pa. He’s been spotted at 4/20 events and calls out fellow candidate hypocrisy—his press release makes a point to call “bullshit” on his opponent, the fraudulent Dr Oz, for conflating weed with harmful crime.

His platform echoes the belief of many activists and leaders that cannabis reform will not only reduce crime, but also create jobs and financially uplift communities in need. In 2019, one of his first acts as Lieutenant Governor was a 67-stop tour of Pennsylvania to gauge public opinion for adult-use cannabis; the resulting report indicated overwhelming support for legalization.

Even as the cannabis industry has weathered controversy and an enormous illicit market, it remains a billion dollar industry. Other countries have realized its federal potential. And as for Pennsylvania: When will communities grow tired of sending tax revenue across the border to New York, New Jersey, and New England.

As Fetterman writes on his “Legal Weed for PA” merch description, which are sold through his official campaign website, “It’s high time that we get our sh*t together and legalize weed in PA + USA.”

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Amelia Williams

New York-based freelance cannabis journalist Amelia Williams is a graduate of San Francisco State University’s journalism program, and a former budtender. Williams has contributed to the San Francisco Chronicle’s GreenState, MG Magazine, Culture Magazine, and Cannabis Now, Kirkus Reviews, and The Bold Italic.

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Medical marijuana patients targeted by sneaky new federal drug testing rule




Proposed change would affect 9 million fed workers and contractors

In a proposed new revision to federal drug testing rules, government drug warriors are specifically targeting medical marijuana patients in an attempt to undermine the legal status of medical marijuana in 38 states.

A cruel relic of the ‘Just Say No’ era targets state medical marijuana laws and patients.

The new language, slipped quietly into a proposed revision published in the Federal Register this morning, states that “a physician’s authorization or medical recommendation for a Schedule I substance is not an acceptable medical explanation for a positive drug test.”

In other words: The federal government is doubling down on its insistence that cannabis is a substance “with no currently accepted medical use in the United States.”

Currently, 38 states have legalized the medical use of cannabis for patients who obtain a medical authorization.

Why this is important

The proposed new rule comes out of the Substance Abuse and Mental Health Services Administration (SAMHSA), a division of the US Department of Health and Human Services. Most people who have heard of SAMHSA know of it because of the agency’s annual National Survey on Drug Use and Health, which tracks the use of, and attitudes toward, various drugs.

But SAMHSA also oversees the rules on drug testing for federal agencies—rules that apply to most of the roughly 9 million people employed by Uncle Sam, including members of the military. That’s almost 6% of the total American workforce.


How to pass a drug test for weed–the ultimate guide

A relic of Reagan’s ‘Just Say No’ campaign

Justin Strekal, founder of the BOWL PAC, a legalization group aimed at supporting legalization at the Congressional level, noted that the proposed change “clarifies the existing oppressive and senseless process of drug testing for trace elements of THC, regardless of the worker having a physician’s recommendation.”

“It is appalling that President Biden has done nothing to address the Reagan-era reefer madness executive order that prohibits the government from hiring qualified workers on the sole basis that they consume cannabis in their off-the-clock hours,” Strekal added.

That Reagan-era order, EO 12564, established government-wide “drug-free workplace” policies that include drug testing. The order was signed by President Reagan on Sept. 15, 1986, the day after the President and Nancy Reagan appeared on national television to kick off the First Lady’s infamous “Just Say No” campaign.

To be clear: SAMHSA’s existing federal drug testing rules don’t specifically allow a patient who tests positive for cannabis to simply show their state med card and get a free pass. But there might exist a little allowance room, depending on the judgment of a federal agency’s Medical Review Officer.


Marijuana drug tests are now illegal in most workplaces in New York State

What’s a Medical Review Officer?

Federal agencies and departments employ (or contract with) Medical Review Officers (MROs). These are licensed physicians who serve as the point of contact between the federal employee, the test facility, and the employer.

One of the main duties of the MRO is to investigate “failed” drug tests and determine, in consultation with the employee, whether there is a legitimate medical explanation for the drug test results. An MRO is a medical professional who is tasked with investigating and interpreting the results. For instance, an employee may have recently undergone surgery or be taking prescribed medication under a physician’s guidance. The MRO will undertake to verify and understand the circumstances, so that a single drug test doesn’t scuttle a job, a career, or a life.

Medical recommendation not an acceptable medical explanation

If the proposed new rule were to be adopted, Medical Review Officers would specifically be forbidden from accepting an employee’s medical condition, need for medical cannabis, and physician’s recommendation, as a legitimate medical explanation for the drug test results. In other words, the new rule would eliminate any interpretive wiggle room for MROs throughout the federal government.

It’s unclear how many federal employees would be affected by the new rule, because it’s unclear how many federal employees have had their THC-flagged drug tests overruled by an understanding MRO.

This is how federal prohibition hurts people

All of this is slightly insane but a logical outcome of the federal government’s continued refusal to change its outdated, disproven, and harmful categorization of cannabis as a Schedule I drug. That categorization was first established by Congress and President Richard Nixon for purely political reasons in the early 1970s. Nixon’s own presidential-appointed commission, after lengthy investigation, found that the Schedule I categorization of cannabis was unfounded and needlessly harmful. Nevertheless, it persists to this day.

Medical marijuana was first legalized by California voters in 1996. Since then, 37 other states have legalized the medical use of cannabis. Current polls indicate that 91% of all Americans believe cannabis should be legal for medical use.

Federal agencies continue to test for THC

Despite all the evidence, the federal government continues to cling to marijuana’s Schedule I status. Many federal employees are forced to submit to drug tests that include a test for the presence of THC that may have been ingested many weeks previous. Those drug tests occur—and federal employees still lose their jobs—even in states where it’s legal for all adults to grow, possess, and sell cannabis.

Can you change, alter, or end this proposed rule?

Yes. The public comment period on this rule is currently open, but it closes at the end of business on June 6, 2022.

Go to the federal government’s regulations comment page, and follow the “Submit a comment” instructions. Be sure to refer to file code SAMHSA 2022-0001.

Also: Contact your state’s two senators and your local representative in Congress. They can put pressure on SAMHSA and HHS leaders to scuttle this cruel and unnecessary rule.

Let them know what you think. It matters.

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Bruce Barcott

Leafly Senior Editor Bruce Barcott oversees news, investigations, and feature projects. He is a Guggenheim Fellow and author of Weed the People: The Future of Legal Marijuana in America.

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Five cannabis cases to watch in 2022 – Cannabis Business Executive




Five cannabis cases to watch in 2022 – Cannabis Business Executive – Cannabis and Marijuana industry news

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