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Is Europe falling behind?

Is Europe falling behind?

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When it comes to regulating and producing medicalized cannabis products, different countries have a variety of approaches. The American field of medicalized cannabis has followed a very different path to Europe. 

In today’s episode, we speak with Stephen Murphy, co-founder and CEO of Prohibition Partners, a cannabis-focused business intelligence and consultancy company. Prohibition Partners LIVE, its flagship conference, will be taking place later this month.

Stephen Murphy, CEO of Prohibition Partners
Stephen Murphy, CEO of Prohibition Partners

In our conversation, we discuss the ways that Europe and North America differ when it comes to cannabis and what we can learn from those differences. 

In Europe, Murphy explains, cannabis products are held to the same standards of accountability and repeatability as other pharmaceuticals. While these high standards are certainly good practice, it doesn’t adequately consider that cannabis is a plant, which means it does not have the same stability as chemical compounds.

We discuss the lack of access this results in for patients, the differences between hemp and cannabis with higher levels of THC, and the tremendous proven environmental benefits of growing cannabis and producing hemp that could play a big role in the fight against global warming, which Stephen is eager to discuss in the upcoming Prohibition Partners LIVE conference.

Also, in our new segment, “Nuggs of Wisdom,” we hear from senior Cannigma writer Ben Hartman about a rapidly aborted snortable cannabis product that hit the market this month, and what the science says about putting cannabis powder up your nose.

Executive producer, Michael Schaeffer Omer-Man. The Cannabis Enigma podcast is a co-production of The Cannigma and Americans for Safe Access. Music by Desca.

Full transcript:

Michael Schaeffer Omer-Man: Stephen Murphy, thank you so much for joining us.

Stephen Murphy: Thank you, thank you so much for having me.

MSO: There’s a lot I want to talk about but the thing that’s on my mind specifically is the way that – or the pace that North America and the Americas in general have been moving on cannabis liberalization and legalization as compared to Europe.

Europe’s obviously come a long way and most of the countries on the continent have varying degrees of medical programs alongside going hemp industries but can you start by giving a quick overview of where Europe is in comparison to North America but also your thoughts on why the momentum seems to be different?

SM: Yeah, I think it’s – that this is I think the momentum in Europe is – has to be recognized as it is pretty phenomenal in terms of what is happening. It’s just in a different stage. You’ve had this conversation in the US for over 20 years in some states so it’s not as if suddenly overnight, people have woken up to the discussion of cannabis and cannabis legalization and cannabis access.

I think what you are just seeing is the domino effect of the stigma ruminating to legalization but also the political hot potato is no longer – does. It’s pretty much the acceptance of the product and certainly warranted in terms of its ability to boost the public offers. I think what we’re seeing in the US is more just a broader adoption of cannabis legalization and cannabis access whereas in Europe, it’s starting off very differently. You are looking at it as a medical product and as such, it’s just going through the same process as any other medical product would in terms of access and recognition on to the marketplace.

MSO: Wait, hold on. I mean, that’s actually very different from the way that the medical market came into existence in the United States where it occupied this sort of separate track that wasn’t subject to the same medical regulations and medical product standards. Can you explain what that means in Europe, that it’s an end track?

SM: It’s not, it’s not treated as a medical product and it’s not held to the same classifications and standardization as medical products in Europe are. I think that’s a different track that it’s going down in terms of the specialization regarding patient access in Europe is very defined and the routes for patients, the route patients need to go to, to get access to cannabis in Europe is quite restrictive and there is depending on jurisdiction is quite a high cost associated to that because of the high standardization producers need to get to in order to supply the product whereas in the US, the standardization isn’t the same nor is the access for patients to get products or prescriptions.

There were somewhat of a, I want to say grey, but it wasn’t the pharma routes for patients in the US who wanted to get certain products, you know? It was a lot more lenient for cannabis producers to supply patients all across North America for the last 15 years and I think, it’s not only the mindset but it’s the supply chain makeup that is quite different in terms of how the market is being supplied on both sides of the Atlantic.

I think where Europe and certainly Israel has a major advantage is it’s come at it from a medical approach first. It spent significant time understanding the plant, understanding the science behind the plant and trying to evolve what can be created from the plant in a medical capacity and in a medical state. There’s always going – where America certainly has the better advantages looking at it from a consumer angle and you know, more wellness, health wellness and then maybe adult use perspective but Europe is more advanced when it comes to the pharmaceutical and medical angle of cannabis.

That’s the big difference so far and a lot of that is just down to how governments have chosen to recognize and accept cannabis within the jurisdiction and also the concept of legalizing it for adult use right of the bat is never going to be a winner and I think it’s also the case of patients need access first and foremost. This is where the crux of the issue is, if you are a patient then you have epilepsy or your child has epilepsy, you want a qualified product that you can rely on that has the same level of provision in relation to the manufacturing process as any other medicine that you would take.

You have the accountability and repeatability that is associated with all of the registered medicines and I think that is what the European format has recognized. However, they’ve kind of gone overboard as well in terms of how they treat cannabis and matching it to the same criteria. At the end of the day, it is still a plant and it doesn’t have that same level of stability. You know, you can’t isolate it in the same manner in order to reproduce and manufacture a certain product. 

I think we’re needing to kind of understand how we classify medical cannabis in Europe in order to improve the volume of access for patients across Europe because at the minute, it’s still very restrictive in terms of who can prescribe and what they can prescribe and for what conditions of course, what they can prescribe for.

MSO: Obviously, every country is different but within Europe and certain rainy islands close to it. What do those more pharmaceutical standards mean for patients? What are they getting that’s different than somebody in Nevada or California?

SM: I think it’s stability. Stability testing is so critical. When they go and get their cannabis or cannabis extract or whatever format of cannabis that they’re looking at, it is consistent with the exact same product that they had beforehand. You know, that is a farmer product, the farmer products where you have – if you are a doctor and you’re treating a patient, you have that accountability and trust in the products and you can plan accordingly.

You are not wondering if there is some discrepancy in or evolution of that product and it also matters if you are developing drugs, if you are doing R&D, you also have that same stability in terms of understanding that you have consistency in what you are developing and you have a solid base at which you can develop from.

Now, that’s going to matter significantly when as we advance clinical trials, as we advance product formulation as not just product formulation within pharma but all product formulation and that comes down to the initial process in relation to the supply chain of pretty hardcore standardization.

You have everybody claims to be GMP compliant or EU GMP compliant but very few actually are. The reason very few are is because it’s so challenging, it’s really challenging.

MSO: Just for any of our listeners who don’t know, GMP is good manufacturing practice, which is certain standards for manufacturing.

SM: Yeah, if you are to operate in Europe, it’s the only standard that matters and if you want to kind of go on to supply gold standard. Now, you can have different specialties but if you are to operate in Europe, the only thing that really matters is EU GMP and I think whilst some US companies have certainly started to recognize that and you know, early Canadian companies certainly did. There’s these companies who spend significant capital investing in their facilities to be EU GMP because it’s quite hard to retrofit to that standardization, it’s either something that you build in and design for the very start or you are going to pay a pretty penny and try to retrofit to have that standardization in your supply chain.

I think we’re at a very exciting place in Europe where the issue of supply, which has really hampered growth because it’s hampered what doctor’s ability to understand what they could prescribe because for the last few years, you would have patients going to doctors and pretty much telling them, “Okay, this is what’s available in my pharmacy” or this is what’s available around me and this is what you should be prescribing me where doctors are now getting trained up. You know, you’re seeing pretty decent doctor education platforms come about and some of those are publicly funded, some of those are privately funded but you know, they are thankfully increasing and improving doctor’s understanding of cannabis.

Making them more comfortable with it and improving their ability to treat their patients and lead their patients as opposed to what has been happening with the other way, whether it being the other way around in the relationship.

MSO: Let’s a pivot to the UK for a second, which was a part of Europe until recently. It’s kind of a unique and interesting case. In my mind, you know, there’s been a lot of progress made, anybody who has been following those, the case of Alfie Dingley and one or two other children who have really pushed the conversation and ultimately led to at least technical legalization of medical cannabis in the UK but from what I understand, it’s still incredibly difficult, if not impossible to get it through the NHS.

What I wanted to ask in addition to any of your thoughts on that is, it’s led to a situation where we see something like Can Card come, where civil society has to create solutions to effectively or create defacto, decriminalization for medical patients so that when they can’t have access here, they’re still a little bit safer in accessing it. It seems a little bit crazy that you have this progress but it’s still so convoluted.

SM: I don’t know, I’d say, point me to any society where legislators are actually out in front and leading the way. Legislation has always been playing catch-up and that’s just something we have to accept and acknowledge. I think the UK, there’s always going to be negativity and it’s – there’s actually, there’s a lot of positivity to be taken away from it.

You have when cannabis legalized and it’s legalized as a very loose term in terms of what actually happens, in lays in November 2019. It took pretty much a year and a half for there to be the supply chain put in place, you know the infrastructure put in place in terms of doctors who were educated, clinics that could actually receive patients, distributors and pharmacies who could actually distribute products and receive products you know available from it in fashion. 

It took a while for that infrastructure to be developed. Now, you know, you then had if it was – you kind of had cannabis going on a deal track you had. Okay, look, there’s the private markets where patient, which moves a lot quicker than social, than social healthcare because in social healthcare there is such a vast degree or vast volume of bureaucracy and box ticking that needs to be accomplished in order for a product to be released or a product to be accepted on the market. 

In the UK, you know that box ticking is, for the lack of better terms, taking the piss because it’s really, really, really gone beyond what any other country in Europe has done in terms of reviewing and not recognizing the therapeutic immune benefits of cannabis and certainly medical cannabis. What you have seen in Europe is the establishment of a very strong private marketplace where you are going to be seeing, it’s gone from maybe 90 patients in 2019 over the course of the year, you know for 90 patients to around just under a thousand patients last year. This year we’ll see around 6,000 patients. 

That’s pretty substantial growth, you know that is – look, it’s not like Germany where you’ve got the bonus of a 100,000 patients but it is substantial growth. You are seeing if you look at a model in the directory, it’s very similar to Australia and if you look at the position that market is in now, it is proving to be quite an adaptive market for patients in need. I think the UK model, look, it’s obviously not perfect and yes, there has been an outcry for patients and it’s not perfect for patients, absolutely not and if they want, if they are going after the private model it’s so bloody expensive. 

You know, it’s really, really expensive but that’s changing. You know, you have initiatives like Project Twenty21, you have Cancard, you have all of these activist-led to a certain degree or science-led initiatives that are looking to improve access and it’s obviously in the private market’s interest to work with these and improve access because there is always going to be – we’re only – we understand that there is a very small percentage in terms of the population that is being penetrated in terms of who can get access to medical cannabis. 

It’s exceptionally frustrating but there is a number of really, really good players like I think the recent acquisition by Curaleaf of EMMAC, which is the kind of European virtually integrated cannabis company that has UK access. You know, I think that is a big driver, a big motivation for a lot of North American companies. They are looking at how we can access Europe, how do we do this organically or inorganically was and they’re looking at key players within the space. 

Now, there is a handful of key players in the UK and in Europe in general but they are – look, they’re only a couple of years old. It is not – you know, you’re talking about setting up a brand new industry and I think it is quite easy to be critical of the government but government in any capacity has never moved quickly. We are unfortunately going to be reliant on these initiatives for some time like I don’t see the NHS changing their policy unfortunately anytime soon just because of the level of bureaucracy involved in certainly approving it. 

Now, you have places like Germany, which has a most fair solution for patients. You know, you have legislation that is a lot more positive and I think countries looking to regulate in the future will probably, certainly in Europe, will be looking and leaning more on the policies of Europe that are much more patient-first led whereas in the UK, they’re more about I would say protective of their own back unfortunately. 

MSO: Let’s pivot for a minute. Hemp is the same plant as cannabis, it’s marijuana, very different legal definition and very different uses. I am actually going to be moderating a panel on the hemp industry at the upcoming Prohibition Partners Live Conference in a few weeks. Do you think it’s a disservice to either or both of them that the way that we look at them either together or separately? 

SM: I think, you know, in terms of education and understanding about what it is, you’re going to – the fact that it derives from the same plant, however they are totally different in terms of the potential of the supply chain. I think we’re only, you know, founding them together is helping I would say in terms of generating the interest in the plant and generating the interest in the potential, you know, getting people hooked in, in terms of what this plant can actually do. 

I think it is also helping de-stigmatize cannabis because it is showing that there is a broader appeal than just like that Reagan pot head or to make some pot heads notion that cannabis is for still reason is a gateway drug and all of that nonsense. I think it’s actually helping to remove that and showcasing the utility and versatility of cannabis as a plant. Look, we’re still in infancy of exploring what hemp can actually do and the utilities of hemp. 

You know, from manufacturing to industrial to food to technology, it is a really, really exciting exploration then there’s going to be a lot of crossover in terms of capital that comes into – that may come into cannabis from the wellness market that also has crossover, you know, that will look as their supply chain and see how cannabis can benefit their supply chain. I think it is actually a good thing that we are having, that we’re using hemp in these conversations. 

Where companies looking at cannabis can understand the impact it will have like we talk a lot around cannabis transformation. Just like digital transforms industries from finance to banking to travel, cannabis is going to transform pharma, it is going to transforms textiles, it is going to transform manufacturing. It is going to transform food and drink, so we’re really only at the very start in terms of understanding what and how cannabis is going to transform these spaces. 

I mean I think it is one of the stages where we need to specialize and separate all of these conversations at once. You know, we’re all still understanding the ability of this plant and also who is leading the way and you know, these help developed more mature and certainly informed discussions and you know, if you look back when say, go a conference that we’re all asked four or five years ago, it was – you are – the conference was all about hemp and what hemp could be done. 

Whereas now, you’re actually looking at, “Okay, the textile capabilities of hemp” and all of the different chemical solutions and treatments of hemp when it comes to textile. We’re a lot more advanced and that just means that the conversations we’re having is not like the talking about the potential of cannabis but we’re actually talking about the realities of utilizing cannabis and this transforms how we are thinking of the impact cannabis has on existing business. 

It just creates a sense of urgency, which is going to be needed if this little bit of adoption of cannabis and certainly acceptance is going to come to reality, which I think we are seeing. 

MSO: What of those uses in our current reality, what is one of the most exciting for you? 

SM: I even look at it from an environmental perspective, from a sustainability perspective. If you look at what’s the carbon capture of hemp, if you just talk about the carbon capture of hemp compared to wood, compared to a forest, compared to all of the crops out there, it seems like it’s a no-brainer in terms of its ability to capture carbon, its ability to transform land in terms of variable land, in terms of its ability to create sustainable products within the industrial supply chain. 

If you just talk about it from a sustainability perspective, it’s magic. It really is magic and you know, we’re so gung-ho on talking about it from the medical uses and drink uses and the cosmetics and so on of benefits but just pure sustainability of transforming the manufacturing supply chain, it’s golden and I think we’ve kind of been downplaying that alone. We are looking at, “Okay, how do we solve the greatest crisis beyond really COVID? How do we solve this climate change?” and it is staring us in the face and you know, we – 

The amount of research that has been done is actually substantial, however I don’t think we have pitched us in the right way. Now, it’s going to be key to the UN’s sustainability goals. It is going to key to – and I know they’re going to be discussing it in New York where they reconvene in October but I think we’re doing ourselves a disservice if we can’t craft a really meaningful mainstream conversation just demonstrating the ability of hemp to assist in our fight against global warming and provide a sustainable future for our kids and also for our consumer needs. 

Whereas if us as consumers are actually going to change our habits that much, were we’re not. You know, where unfortunately, we’re all creatures of comfort. However, rather than forcing change behavior, if we can change the supply chain it seems like a much better solution and incentive that change in the supply chain. 

MSO: Absolutely. As we mentioned, the Prohibition Partners Live is coming up in a few weeks. You want to give our listeners a quick preview of what it is and how they can find more information to register. Obviously, we’ll put a link in the show notes here but – 

SM: Yeah, of course. Prohibition Partners Live is a global, well, virtual conference on the cannabis industry, so from the 18th to 20th of May of this month, we have spokespeople kind of significant stakeholders and key individuals and to our leaders from the worlds of politics, from the worlds of science, from the worlds of business and advocacy who are kind of coming together around a very informed agenda and program to kind of discuss key issues affecting the current status of the industry and also trying to understand what we are going to do to shape together the future of the space around the world. 

Again, having those discussions of what can the UK learn from the Australian model or what can future companies learn from existing companies within the space, where can investors deploy their capital and what can companies do to attract better investors because capital is always going to be key in a fast-moving industry and of course, understand what regulators are thinking. You know, we thankfully have a number of senior politicians from around the world on to discuss what the realities of creating cannabis legislation looks like. 

We are quick to say legalize everything now but of course, you know putting bills through and working it through the internal power structure is a different reality and it is really, really important for the cannabis industry and B2B players to actually understand what that process looks like and understand what they can do to influence and support us and you know, what type of information governments are being provided in order to further the change because if we as an industry can’t channel a strong narrative and give these legislators a positive direction to go through, you know, we can’t expect the change that we want. 

It is really about like, Prohibition Partners Live is – this will be the third virtual meet-up. Usually they’re all held in person but this will be the third virtual rent and it’s really, really important to kind of to have a setting where you can have educated conversations like we have – we really very fortunate in Prohibition Partners Live to have senior delegates take part and senior delegates participate like we in our last event, you know, you have 70% are C-suite or senior executives. That’s the kind of stakeholders who participate. 

You have over, I think in our last event, we had 10,000 meetings take place. That just shows you there is such a demand for business to be done and that’s meetings between kind of us producers and distributors. It is business development, it is investment relating, it was strategic partnerships, it is MNA, we have lots of different conversations taking place and for us, we just want to provide a platform in which educated conversations can take place and people who are aligned in terms of how the industry should be shaped, come together to voice an opinion or certainly to give some input on the future of the industry. 

For those who are new to the space and wanting to maybe move their business in a different direction can learn from some of the best within us. We’ve got a – we’re pretty lucky in terms of some of the key stakeholders and speakers we have. We have this event in May, so you know, on top of the bill is we have Boris Jordan, he is the chairman of Curaleaf, probably the biggest name in cannabis and somebody who has a crystal ball in terms of how the industry is going to evolve. 

We also have members, American, European, Australian political establishments who will be there to give their input in terms of what is happening on the ground, in terms of like speakers like Axel Berne who is behind the push for New York in the legalization of New York. It’s really, really just a cross pollination of ideas and thinking that I’m kind of looking forward to participating in and certainly engaging in over the few days. 

MSO: Well, I am looking forward to it as well. I will be there as I mentioned, I will be moderating a panel on the hemp industry. My co-host Elana, will be moderating another panel and thank you so much for taking the time to speak with us. Hope to have you back on.

SM: No, thank you. Thank you so much. Yeah, thank you.

Thanks for your feedback!

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