Cannabis marketing data firm New Frontier Data yesterday hosted a day-long webinar on the effect of the coronavirus (COVID-19) crisis on the global cannabis and hemp industries.
Moderated by CNBC’s Tim Seymour and Amanda Drury, and former FOX News announcer Carl Cameron, the Global Cannabis Town Hall: New Economic Realities featured online panels with cannabis and hemp industry members from Asia, Europe, Latin America, and North America. Webinar segments were separated into discussion topics by geographical region.
The six hour event covered “the impact of the ongoing health and economic crisis, exploring emerging challenges and opportunities across regional cannabis markets.”
Pharmaceutical applications of cannabinoids emerged as a dominant topic, especially with experts from countries like Israel, Australia, and the U.K., where cannabis research has been sanctioned and regulated by governments. In Israel, which has been conducting research studies and clinical trials on cannabis for the last 50 years, many see a bright future for herbal-based pharmaceuticals.
“We’re on the right track,” said Yahav Blaicher, co-founder and chief scientist at botanical research and development company Kaneh-B, “as we are approaching more and more conditions, both physical and mental.”
In regard to whether cannabis medications might help patients suffering from coronavirus, Blaicher said that anti-viral cannabis medications might be developed eventually, but—in a familiar refrain—more research is needed.
While CBD products may contribute to an overall feeling of physical and mental well-being by supplementing the endocannabinoid system of a patient, there is no cannabis-based medication that specifically treats coronavirus. Nevertheless, illicit manufacturers and scammers have promoted some CBD and cannabis products as treatments for COVID-19.
Oliver Zugel, founder and Chief Executive Officer for cannabis producer FoliuMed said companies making such false claims were, “digging their own grave,” as well as damaging the credibility of the medicinal cannabis industry.
Panel experts agreed that, in addition to research, normalization of cannabis-based medicine through education was vital. Zugel suggested new terminology like “herbal drugs” or “phyto-pharmaceuticals” might better represent the end product of medicinal cannabis companies.
Stepping away from the “stoner” image often projected with recreational cannabis products, panelists said, was also a necessary step in expanding infrastructure and markets for medicinal cannabis companies.
Cannabis consultant Dr. Joseph Rosado also speculated that CBD or cannabis use for coronavirus may be contraindicated. The anti-inflammatory effects of CBD, he said, are well-established; some pandemic reports suggest that anti-inflammatory medications, like ibuprofen, may actually worsen symptoms and that concern may also affect coronavirus patients who are using CBD products.
The North American segment of the webinar focused on the U.S. as the second largest potential cannabis medicine market in the world; unfortunately, for countries like Australia and U.K. that are ready to export cannabis-based products to global markets, the U.S. remains off limits due to federal prohibition.
The market with the largest potential for the cannabis industry, according to panel experts, is Asia.
Several webinar speakers noted that, until there is a change on the federal level regarding U.S. cannabis regulation, other opportunities may arise to gain U.S. Food and Drug Administration (FDA) approval for cannabis-based drugs. Formulations that use non-psychoactive cannabinoids, terpenes, and compounds extracted from hemp or cannabis may find an easier process for approval. Medicinal products that have already received approval from governmental agencies in countries outside of the U.S. might also find a faster track to eventual approval by the FDA.
Lack of regulation infrastructure for cannabis-based products and medicines, at this point, presents a significant obstacle for global vendors to crack the U.S. market, and also creates hyper-local conditions for legal sales in the United States.
Speaking from the CBD side of the industry, Mile High Labs Chief Financial Officer Jon Hilley said the Farm Act of 2018, which legalized hemp cultivation in the United States for the first time since the 1930s, was the “worst thing” that happened, because it gave regulatory control of hemp to the FDA, which has been slow in creating regulations.
Currently, the only cannabis-based medication approved by the FDA is Epidiolex, a drug manufactured by U.K.-based GW Pharmaceuticals for the treatment of two forms of severe childhood epilepsy.
Some panelists suggested that the FDA take a two-tiered approach to cannabis regulation. One tier would regulate products, including supplements and “cosmeceuticals” that are infused with compounds derived from cannabis, while the second tier would be for pharmaceutical drugs that contain compounds derived from cannabis.
Specific to the coronavirus crisis, panelists examined possible opportunities and risks that might result for the cannabis industry. The sheer global scale of the pandemic crisis has shifted growth projections for industries across the board, including cannabis. But the industry, panelists speculated, has so far emerged as a strong haven for investors and a strong market for vendors.
In particular, the designation of cannabis dispensaries and retailers as “essential services” in some legal U.S. states represents a major gain for the industry, panelists said, and raises the awareness of cannabis as a medicinal necessity for many.
New Frontier Chief Knowledge Officer John Kagia presented data and charts with information collected immediately after “safer at home” restrictions were implemented in states hard hit by coronavirus.
Data said consumers indicated the primary reasons for use of cannabis products were for relaxation (66 percent), stress relief (59 percent), anxiety relief (53 percent), and sleep issues (43 percent).
“Safer at home” regulations resulted in a mid-March spike in sales, according to data gathered from vendors. Kagia presented statistics that said dried flower sales spiked 23 percent; followed by vapes, edibles, and pre-rolls at 14 percent higher sales; tinctures and extracts saw a 7 percent rise, and topicals bumped up 4 percent.
Data representing possible long-term consumer trends—even after the pandemic crisis ends—indicated 31 percent of consumers said they will no longer “social smoke” or share pipes or pre-rolls with others; 15 percent said they were likely to share less often. Eight percent said they will bring their own gear (pipes, dab rigs, etc.) to social settings. Another 8 percent said they would consider recreational cannabis sessions via online social platforms, like FaceTime.
But, Kagia said, 52 percent of consumers said they typically consume cannabis at home, alone, in any case. Data also showed cannabis purchases, especially for medicinal consumers, are a fixed line item in monthly budgets; without any discounts, the average amount consumers spent on cannabis products monthly was approximately $350.00.
Kagia also pointed out 2019 was a particularly brutal year for the cannabis industry as interest from investors and venture capitalists seemed to cool off, in Canada and the U.S. He also noted, U.S. cannabis industry businesses will not benefit from federal coronavirus emergency funding, though hemp businesses may be able to access emergency government programs.
Based on the data, Kagia suggested that even with many obstacles, cannabis markets seem “uniquely positioned for growth” and may prove to be a somewhat “recession-proof market.”
Hoban Law founder and attorney Robert Hoban countered that the cannabis industry may not be well-defined enough in the United States, to claim recession-proof status.
Hoban also suggested that in an economic downturn, brought on by the coronavirus crisis, industry companies would have to re-evaluate their business models. In a recession, company closures for those without the wherewithal to withstand a downturn could eventually become a reality. “Collaboration” and partnerships, Hoban said, may force these companies to “rethink their trajectory to success.”
After the pandemic, panelists predict investors and entire national economies will be looking at industries that have shown potential for growth, can maintain profitability even under adverse conditions, and provide jobs. In the long term, that could result in a positive climate for expansion in the cannabis and hemp industries and markets.
The Global Cannabis Town Hall: New Economic Realities webinar was presented in partnership with CannabisBPO and PR Return, and powered by events.com. Webinar sponsors included New West Summit, RASB Media, Benzinga, Leafwire, Expo Cannabiz Business Conference, AJD Media, and Expo MEDE Weed.