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Cannabis may be one of the biggest long-term growth trends on Wall Street in coming years. And that major opportunity for cannabis investors could come at the expense of the alcohol industry.

The Numbers

A new study by Syracuse University and the University of Georgia suggests cannabis legalization has a significant negative impact on online searches for alcohol and online alcohol advertising effectiveness.

The study focused on six U.S. states that legalized recreational marijuana use between 2014 and 2017. Online searches for alcohol were down 10.9% in these states following legalization.

The researchers concluded there is “reduced interest in alcohol when cannabis is legalized and becomes more available.”

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Surprisingly, the study found that tobacco interest is not negatively impacted by marijuana legalization.

“The alcohol industry, by contrast, has valid reasons to be concerned about legal cannabis and may need creative strategies to avoid market decline if recreational cannabis legalization passes,” the researchers concluded.

DataTrek Research co-founder Jessica Rabe said last week: “The marijuana industry still needs time to develop and more legalization to take hold, but it already poses real risks to other markets.”

Alcohol Companies Respond

Some alcohol companies are already playing defense against cannabis. Constellation Brands, Inc. STZ 0.26% has invested in Canopy Growth Corp CGC 2.89%, and Molson Coors Brewing Co TAP 1.78% is partnering with Hydropothecary Corp. to form a cannabis beverage joint venture.

Just last week, Anheuser Busch Inbev NV BUD 1.18% announced that its Fluent Beverage Company joint venture with Tilray Inc TLRY 2.39% will begin commercializing CBD-infused beverages in Canada. Heineken N.V. HEINY 1.03% is also working on cannabis-infused beer.

Other alcohol stocks have been more cautious in dipping their toes in the cannabis market. Diageo plc DEO 0.5%, the world’s largest distiller, has said it is not rushing into the cannabis business.

Benzinga’s Take

Alcohol companies appear to see the cannabis threat coming based on the number of partnerships between the two industries. The alcohol companies willing to most aggressively partner with and/or pivot toward cannabis could potentially be the market leaders in the space in coming years.

Two educations institutions are offering their first cannabis certificate for healthcare professionals.

Pacific College of Oriental Medicine, a leader in integrative healthcare education, is the first regionally-accredited institution offering a college-level Medical Cannabis Certificate for Healthcare Professionals.

Starting this term, in addition to the core classes presented by their doctoral faculty, Pacific College is partnering with Oaksterdam University, America’s first cannabis college, to offer its students bonus lectures.

Cannabis course for health professionals

The most recognised professionals, attorneys, academics, activists, cultivators, and entrepreneurs in the field of cannabis have contributed to the OU’s curriculum. Two of their noted faculty members, Natalie Darves and Paul Armentano, will be sharing their extensive knowledge on the genealogy and pharmacology of cannabis.

This partnership emphasises the critical importance of cannabis education, as well as the roles Pacific College and Oaksterdam are playing as thought-leaders in the field.

Malcolm Youngren, Pacific College’s COO, said: “Thanks to this new collaboration, we can further educate and guide our healthcare force about the safe and effective use of cannabis.

“Patients deserve expert care,” says Pacific College’s program Chair Carey Clark, “They need reliable information about potential drug interactions, how to procure quality cannabinoid medications, and how to safely use the medicine for maximum relief of symptoms and minimal side effects.”

Details regarding the initial two guest lectures offered this term are below:

• ‘Genealogy of Cannabis’ explores the cannabis genome, how genetics are sourced and stabilised, and the global origin of the cannabis genetic pool. Consumption patterns have significantly shifted the gene pool with both positive and negative effects on the cannabinoid profile of in-demand cultivars. A look at the future of genetic research, labelling standardisation, and genome testing will also be covered.
• ‘Cannabis and Cannabinoids: A Primer’ summarises the science relevant to the pharmacology of cannabis. Particular attention is paid to identifying and highlighting the plant’s therapeutic properties, mechanisms of action, and modes of administration. Also discussed is the use of cannabis and cannabinoids for specific conditions.

OU’s Executive Chancellor, Dale Sky Jones, said: “Pioneering cannabis education and policy reform has been the legacy of Oaksterdam founders for 25 years.

“We are thrilled to be collaborating with Pacific College to further educate their students on the benefits and methods of cannabis consumption. This is just the beginning of the adoption of the cannabis and hemp curriculum into higher education nationwide.”

Pacific College of Oriental Medicine and Oaksterdam University look forward to future opportunities to educate the healthcare industry on the positive impact of cannabis and upregulation of the human endocannabinoid system.

Pacific College of Oriental Medicine

Pacific College of Oriental Medicine was founded in 1986 in San Diego to offer licensure-qualifying programs in Chinese medicine and massage therapy. The college subsequently established branches in New York City and Chicago. It holds regional accreditation with the WASC Senior College and University Commission.

As the largest school of acupuncture and Chinese medicine in the United States, it has a unique position in the complementary and integrative medicine market. Over the years, it has expanded its programs to include a Bachelor of Science in Holistic Nursing, a certificate in Medical Cannabis, and a Master of Science in Health and Human Performance.

It offers on-site education to 1300 students and online training to another 500. In addition, the college runs one of the largest complementary medicine conferences in the United States, Pacific Symposium, which draws 1000 online and on-site attendees each year.

Oaksterdam University

Founded in 2007, Oaksterdam University is America’s first cannabis college, with educational roots going back to 1995. With over 40,000 alumni worldwide, OU has established itself as the leading, trusted cannabis educational and policy brain-trust in the world.

The trailblasing institution offers a campus with hands-on cannabis plant experience. Oaksterdam University is recognised for its expertise and leadership in the cannabis industry, providing government and public affairs regulatory training, exceptional academic learning, and networking opportunities.

How’s it going with legal recreational cannabis in Oregon after four years? Addressing a conference on Occupational Safety & Health in Ashland, a man from the governor’s office said it has been a complicated, controversial journey.

Among the state’s findings, said Jeffrey Rhoades, senior marijuana policy advisor to Gov. Kate Brown, is that pot use by youth 12 and older rose 9% between 2008 and 2016, the year after legalization.

Some of that increase could be because youth feel more free to tell the truth now that it’s legal, so it’s hard to know for sure, added Rhoades.

Weed isn’t legal for those younger than 21, so the Oregon Liquor Control Commission, which controls it, is doing “minor decoys” — using teens to try to buy weed at dispensaries. OLCC found that compliance is about on par with alcohol, so Gov. Kate Brown, who has a zero tolerance policy, got emergency rules to revoke marijuana worker permits and triple penalties for sale to minors at dispensaries.

Weed may be involved in more vehicle accidents, said Rhoades. But it’s often found in combination with alcohol, so even though it’s not legal to get high and drive, there’s no reliable way to determine whether cannabis is in a driver’s bloodstream.

“Someone could make a lot of money if they invent a system to do that,” he said.

However, he said, in addition to roadside blood-alcohol tests, police can use the standard that a driver appears “adversely affected to a noticeable degree.”

In terms of the booming CBD market, OLCC tightened the amount of medical CBD you can buy daily from dispensaries and seeks to ensure purity with testing, while keeping in mind that lab tests are expensive, which can hurt markets and favor larger businesses.

Because of the federal ban on recreational cannabis, access to banks remains very limited for those in the legal cannabis industry. It’s still mostly a cash business, and that introduces much uncertainty and expense, he said.

“Banks are risk averse and say it’s just not worth the risk ... so we’re trying to figure it out,” Rhoades said.

Another federal glitch has snagged hemp, which Rhoades called “rope, not dope,” even though the vast majority of hemp is being grown for medical products. Hemp is now legal nationwide, and the crop is undergoing an “explosion,” which is crowding out ranching and other forms of agriculture, but it is technically not legal to transport it across state lines unless the state files a letter of intent with the federal government and gets approval.

“We submitted the letter, but the feds are very busy with impeachment and all the other issues we hear about, so it’s hurry-up-and-wait. We’re in a tight spot but no one is being prosecuted for it.”

How much is hemp exploding? Oregon had 105 acres of hemp in 2015 and 56,000 acres this year. “Should we keep expanding the market?” Rhoades asked the audience.

Oregon has plenty of product, he said, adding he would advise the governor to keep it where it is, but that brings up big questions of government regulation vs. freedom of capitalism, and you can’t say “keep raising cattle and don’t plant hemp.”

He and other advisors are researching the huge shift in Oregon’s land use and, he noted, they will report it to the next Legislature.

After years of prohibition, federal regulations have made it legal to grow hemp in the U.S. again, and many Maine farmers hope to cultivate success in this fledgling market.

Though hemp comes from the marijuana plant, by itself it does not have the same effect.

Since the December enactment of the 2018 Farm Bill, which declassified hemp as a controlled substance, the number of hemp growers in Maine has grown exponentially.

According to figures from the state’s department of Agriculture, Conservation and Forestry, in 2016 – the first year Maine issued growing licenses – there were two licensed growers for 0.25 acres. In 2019, there are roughly 170 licensed growers for 2,700 acres. The counties with the most grow sites are Somerset, with 42, and Oxford, with 25.

According to the National Hemp Association, about 90,000 acres of industrial hemp are being grown across the country.

“Hemp can grow nearly anywhere in the world, in many types of soil – even in short growing seasons or in dry regions – and helps purify soil as well as kills some types of weeds,” according to the association’s website.

The FDA is still drafting rules on how hemp products will be regulated. According to John Jemison, an agronomist with University of Maine Cooperative Extension, valuable research hasn’t been conducted in recent decades because it was illegal.

“We know some of what we need to know to grow it,” Jemison told Maine Public Radio. However, research is lacking on best soil properties, pest management, plant spacing, harvest times and cost reduction opportunities.

“I wish we could have put the horse before the cart and done all the legwork – really known what it was supposed to do – and then been able to teach farmers, ‘This is what you need to do,’” Jemison said.

Maine law requires that industrial hemp be planted using a certified seed source, for example, in accordance with standards set by the Association of Seed Certifying Agencies, and comes from plants with 0.3 percent THC content or less.

A common refrain from those who abstain from marijuana consumption is that smoking weed gets them paranoid. The green stuffs turns their brain red, blasting their synapses with anxiety and panic.

Neil Young has some pretty good advice if this happens to you. “Try black pepper balls if you get paranoid. Just chew two or three pieces,” Young told Howard Stern back in 2014. “I just found this out myself.”

But a new study published in the Journal of Neuroscience suggested you consume something else—cannabidiol, or CBD. Using rat models, researchers discovered those paranoid thoughts you might experience while smoking marijuana is no apparition. THC, the psychoactive cannabinoid in marijuana, stimulates a molecule located in the brain’s hippocampus, where memory, learning and emotional associations are often stored.

When that molecule is triggered, the study found, it can have side effects of anxiety, depression and addictive behaviours.

Scientists then tried giving rats CBD and THC simultaneously and discovered lower levels of anxiety and paranoia. In addition, the molecule in the hippocampus, called extracellular-signal regulated kinase (ERK), maintained normal levels of activity. To put it more clearly, CBD blocked the negative side effects that marijuana’s THC can typically cause.

“Our findings have important implications for prescribing cannabis and long-term cannabis use. For example, for individuals more prone to cannabis-related side-effects, it is critical to limit use to strains with high CBD and low THC content,” said researcher and professor Steven Laviolette.

That said, these scientists didn’t find lower levels of ERK and anxiety when administering CBD on its own. As the Western University researchers told Global News, CBD and THC is a combination that operates best in unison.

“However, by co-administering CBD and THC, we completely reversed the direction of the change on a molecular level,” the study’s lead author Roger Hudson said. “CBD was also able to reverse the anxiety-like behaviour and addictive-like behaviour caused by the THC,” Hudson said.

Researchers in the U.K. are planning clinical trials that may give new hope to sufferers of Parkinson’s and their families.

The trials will examine the effects of cannabidiol (CBD), a psychoactive but non-intoxicating compound derived from the cannabis plant, on Parkinson’s-related psychosis, which can include terrifying symptoms such as delusions and hallucinations.

The small preliminary study, which is to be led by King’s College London and will be funded by Parkinson’s U.K., is set to begin in 2020.

The trial will be composed of two parts. After establishing the most effective dose of the cannabinoid in the first stage (up to 1,000 mg of CBD), 120 patients will be recruited for the second stage, with 60 patients being administered CBD via capsule and 60 receiving a placebo.

King’s College scientists will then administer numerous tests, including neuroimaging, to assess the potential efficacy of the treatment. The trial will run for 12 weeks.

Parkinson’s U.K. has pledged £1.2 million for the second phase of the trials.

Professor of neuroscience and psychiatry Dr. Sagnik Bhattacharyya and clinical researcher Dr. Latha Velayudhan will lead the study.

“The study will also look at the effect of CBD on other symptoms, which will pave the way for scientists to investigate the potential of the compound in treating these in future studies,” Dr. Bhattacharyya stated. “We hope this will progress to large-scale clinical trials—the final step towards becoming a new treatment that will improve the lives of people with Parkinson’s,” he added.

Parkinson’s U.K. director of research Dr. Arthur Roach concurred. “There are many unanswered questions about the value of CBD for people with Parkinson’s,” Dr. Roach said in a news release.

“But this trial will help us to determine whether it can help with the debilitating symptoms of hallucinations and delusions. If successful, this trial could result in people with Parkinson’s being able to access a regulated medicine, rather than reverting to expensive unregulated supplements that haven’t been monitored for their effectiveness,” he said.

Law enforcement authorities across the country, including the FBI, have cast a wide net in their efforts to root out corruption among local government officials overseeing the marijuana industry.

The crackdown has ensnared local government and cannabis industry officials in states such as California, Massachusetts and Michigan. Charges have included bribery and extortion.

While claims of licensing bias and flawed scoring are more common, an examination of the landscape suggests that there have been a number of blatant efforts over the years to improperly influence public officials into awarding highly coveted marijuana licenses.

Such corruption, combined with flawed and biased licensing, undermines the process, hurting the opportunities for businesses that play by the rules, industry experts warn.

In California, for example, local corruption became enough of an issue last year that it was identified as a hurdle for marijuana business license seekers in the newly regulated state.

Elsewhere, Nevada’s cannabis licensing director recently was placed on administrative leave after allegations of bias and improper conduct arose during court hearings related to complaints from unsuccessful applicants about a recent licensing round. He is no longer with the state’s Department of Taxation, which oversaw the cannabis industry.

And in Fall River, Massachusetts, at least four business owners allegedly paid a total of $600,000 in bribes to win Mayor Jasiel Correia’s support of marijuana license applications.

Correia recently pleaded not guilty to multiple federal corruption charges.

Some marijuana industry officials have welcomed the stepped-up enforcement.

“If we want to be a legal industry, we need to act like it,” said David McPherson, who leads the cannabis consulting team at California-based HdL Cos. “Let’s be transparent and make it professional.”

He said the industry should demonstrate that it has nothing to worry about. And if the FBI finds something, “then let’s clean it up.”

The Fall River case, in fact, is one of a number nationwide that federal authorities have investigated in recent years as part of a probe into public corruption in the marijuana industry.

The FBI highlighted its investigation in a recent podcast, during which it also solicited tips from the public.

Douglas Berman, director of Ohio State University’s Drug Enforcement and Policy Center, wrote in a recent email to Marijuana Business Daily that the FBI podcast “may be a way to urge licensing officials to be sure to play by the rules.”

Here’s a roundup of some of the high-profile alleged marijuana corruption cases in recent years:

Arkansas

The limited medical cannabis business licensing in Arkansas has spawned a number of lawsuits as well as an ethics complaint against a commissioner who did some legal work for an applicant.

But one of the most curious cases involved an allegation that an MMJ cultivation applicant tried to bribe a member of the Arkansas Medical Marijuana Commission. The allegation surfaced in a letter to the Arkansas Supreme Court from state Attorney General Leslie Rutledge.

The commissioner, Carlos Roman, in turn was criticized for giving a high score to the applicant, and some accused Roman of sharing information to help the company with its application. He denied doing so.

The Arkansas Democrat-Gazette obtained a video of a meeting between the commissioner and the applicant.

In the video, the businessman can be heard telling Roman he appreciated his help and adds, “If I owe you something, let me know.”

The commissioner responds that a kind word to the state Senate President that he should be reappointed would be sufficient. Roman told the newspaper he reported the incident to the FBI.

Roman completed his term and wasn’t reappointed. A state MMJ spokesman said Roman isn’t under investigation.

Arkansas had no rule banning private discussions between a commissioner and a marijuana license applicant, according to the newspaper.

California

Federal authorities in November 2017 charged Adelanto, California, Mayor Pro Tem and City Councilor Jermaine Wright with attempted arson and bribery.

Wright allegedly solicited and accepted a $10,000 bribe from an undercover FBI agent to assist a marijuana business in obtaining a license.

Wright pleaded not guilty. His trial has been scheduled for Feb. 25, 2020.

The FBI in May 2018 raided the home of then-Adelanto Mayor Rich Kerr as well as a marijuana dispensary as part of an ongoing probe into the city’s relationships with cannabis businesses. No charges have been filed against Kerr.

Kern County, California, Supervisor Leticia Perez was charged last year with two misdemeanors relating to alleged conflict of interest violations. She pleaded not guilty to the charges, claiming they are based on political retaliation and are racially driven.

One charge stemmed from a vote on a marijuana issue in which her husband, a cannabis lobbyist, had received $25,000 from a company to arrange meetings with county officials.

Massachusetts

Earlier this month, two Massachusetts men pleaded guilty in federal court to charges that they extorted money on behalf of Correia, the Fall River mayor, from companies seeking to obtain recreational marijuana cannabis licenses.

Correia, as noted earlier, faces federal corruption charges, which he denies.

He refused to step down despite being voted temporarily out of office by the City Council. The City Council has sued to remove Correia from office.

Michigan

Three family members – Mike Baydoun, Ali Baydoun and Jalal Baydoun – pleaded guilty to federal charges related to a bribery scheme to get a medical marijuana dispensary and cultivation facility licensed in Garden City, west of Detroit.

One of the men allegedly handed a city official an envelope containing $15,000 – $5,000 for each of three council members. The official turned the envelope over to the FBI.

Prosecutors said the men were willing to pay as much as $150,000 to get the permits approved and also offered city officials a 25% cut of the profits in return.

Concerns about potential corruption prompted then-Michigan Gov. Rick Snyder to request that state police investigate whether regulators were taking bribes in exchange for medical marijuana licenses.

For Canada’s recreational cannabis consumers, a long-awaited day is just on the horizon. On October 17, 2019 one full year after Canada’s world-historic legalization of cannabis went into effect, licensed companies will finally be able to produce and sell edibles and other cannabis derivatives, such as extracts and topicals. So far, consumers on the non-medical retail market have only had access to flower. As a result, many consumers have continued to turn to unregulated, illicit retailers for edibles, vape cartridges, and other non-flower products.

Regulations for Edibles and Derivatives Take Effect

Postponing the production and sale of cannabis edibles and other derivatives has always been part of Health Canada’s plan for rolling out the Cannabis Act of 2018. National and provincial regulators wanted extra time to develop specific rules and regulations for non-flower products. They also wanted time to solicit feedback from Canadian consumers and stakeholders. At issue has been the question of THC limits for edibles and derivatives, rules for product ingredients, packaging and labeling and restrictions on anything that might appeal to children.

Health Canada finalized those regulations in mid-June this year and published them shortly after. And in a press release, the agency stated that the new and amended regulations would come into force on October 17, 2019. “However,” the release continues, “it will take time, after that date, before new cannabis products become available for purchase.”

In other words, even though edibles and other cannabis derivatives become legal in Canada this week, it will still take, at minimum, 60 days before consumers can actually purchase them from licensed retailers. So that puts edibles and derivatives on shelves, at the earliest, by mid-December. At least that’s just in time for holiday celebrations.

The reason for the delay, according to Health Canada, is a requirement mandating federal cannabis license holders to provide a 60-day notice to Health Canada of their intent to sell new products. Health Canada also says the lag is needed to give give regulators time to familiarize themselves with the new rules. But regulators have had access to the amended product rules since June.

Quick Rundown of New Product Categories and Their Restrictions

Soon enough, however, Canada’s cannabis consumers will be able to buy cannabis extracts across four categories. There will be edibles, including both foods and beverages, ingestible extracts like oils and capsules, extracts for inhaling, like vape cartridges and dabs, and topicals for applying to skin, hair and nails.

All of the product categories have many rules in common. There can be no added vitamins or minerals, no nicotine or added alcohol and strict limits on levels of caffeine. All products must come in packages that are plain, child-resistant and provide detailed, comprehensive labeling about ingredients, allergens and intended use.

Interestingly, Health Canada is also requiring companies to label their extract and derivatives products with their “equivalency to dried cannabis.” The purpose of that metric is so law enforcement can determine whether someone possesses more cannabis in public than the legal limit, which is set in grams of dried flower. That rule could prove tricky, since extract products often contain very high levels of THC, which means possessing a small amount of concentrate could equate to a very large and thus unlawful amount of dried flower.

Then, there are the THC limits on new products. THC limits were one of the most contentious and criticized issues around the amended regulations. Eatable and drinkable cannabis products will have a 10 mg THC per package limit, which is not very high. Ingestible extracts like tinctures, however, can have 1000 mg THC per package, with individual units (like a capsule) capped at 10 mg.

Extracts for inhaling also have a 1000 mg THC limit per package, so vape cartridges are good to go. Topicals can also have up to 1000 mg THC per package.

Retail Edibles and Cannabis Derivatives Could Shake Up Canada’s Industry

So far, edibles, concentrates and other extract and derivatives products have only been available for medical cannabis patients in Canada. The impending introduction of those products to Canada’s young legal retail market, which is still battling with an entrenched illicit marketplace, could have a dramatic impact on Canadian cannabis companies like Aurora Cannabis and Cronos Group.