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The Food and Drug Administration was created more than a century ago because for many years, the food and drugs Americans consumed were causing them to fall ill and die. As future generations discovered, product safety standards — just like speed limits, seatbelt laws, and public smoking bans — tend to save lives. Regulation, while often messy and imperfect, tends to work.

This lesson is something to keep in mind when processing the outbreak of serious lung problems among vaporizer users still spreading across the United States. According to the latest estimate from the Centers for Disease Control and Prevention, the vape-related lung disease “epidemic” has of Sept. 12 sickened at least 380 people across 36 states, six of whom have died. Like the Seattle-area team who is Washington state’s first confirmed case or the Los Angeles-area 18-year-old woman hospitalized last month, many victims appear to be otherwise healthy young people.

Amid the parade of victims, so far, no clear villains have emerged — aside from various parties’ predictable hobbyhorses. Out of this noise, only one reasonable explanation for the sickenings has emerged. Someone is out there selling unsafe products. Consumers need safe alternatives, or at least safer ones, and a guarantee that that’s what they’re getting.

Most people sickened have experienced symptoms consistent with “lipoid pneumonia,” a rare condition that occurs when fat particles enter the lungs, resulting in severe inflammation. The oils in certain liquids or other solutions used in vape cartridges could be the source of the inhaled fats. Could be, but we don’t know. And though the problem is yet to be identified, proposed solutions are coming hard and fast.

Libertarians who vape (and vote!) are casting President Donald Trump as a socialist turncoat for demanding a ban on flavored e-liquids while the FDA can hammer out reasonable regulations. The FDA, meanwhile, which has failed to regulate vaporizers of any kind and this summer announced that any regulations would have to wait until 2022, looks very much like the epitome of regulatory capture.

Public health officials, anti-smoking advocates and doctors, who for years have been consistently warning us for years that nobody knows the long (or even medium!) term effects of vaping, are showing restraint and not taking an enormous “I told you so” parade, instead advising us not to vape anything, ever, until we figure this out.

And since for some of us, all matters are cannabis, the country’s leading anti-legalization group capitalized on the fear and confusion to try and pin blame on “Big Marijuana” (despite the inconvenient truth that large or small, legal cannabis companies are forbidden from engaging in interstate commerce).

Because the vape illness outbreak is both poorly understood and affecting youth, it is the perfect trigger for a moral panic. And since they have affected a still-unknown amount of people, with the number changing daily, they are difficult to put in a rational context. THC products specifically and marijuana generally have received some blame — even though, as cannabis-industry trade groups pleaded for the public to remember, strictly regulated products bought in legal states have yet to be tied to any illnesses — and, it bears mentioning, the illness cluster in California occurred in a county that’s chosen to ban legal cannabis retail outlets entirely, leaving demand to be fulfilled instead by the underground market.

Meanwhile, authorities in Wisconsin have made what appears to be the nation’s first large-scale bust of an illicit vaping operation. According to Chicago-based ABC7, police arrested a pair of brothers who filled as many as 5,000 vapor cartridges per day with homemade THC oil — seizing 31,000 filled cartridges and 98,000 empties along with cash and “dozens of mason jars with THC,” the station reported.

It’s not yet known if the brothers’ cartridges, which sold for $16 each, were filled with any dangerous ingredients. But they could be! And it would appear that the mere existence of such a massive and massively profitable organization is proof that there is significant demand for vaporizer products, despite everything health officials have told us. The smart move, then, would seem to be what New York magazine business writer Josh Barro suggested on Sept. 11 and what presidential contender Julian Castro echoed: legalize cannabis, and regulate it strictly, just like what has been done at the state level. This is the same model followed when canned food and patent medicines were felling otherwise healthy Americans. It’s the model that the FDA has been failing to follow with JUUL pods. There is no legitimate reason why the regulators can’t step in and demand merchants follow strict standards and to fine them heavily if they do not while removing their products from the market. This appears to have worked in states with a regulated cannabis market. It can be done on a national level.

It may yet turn out that there’s some connection between vaping oil and suffering a lung ailment caused by excessive oil in the lungs. It might, it might not. What should happen is a recognition that the vaporizer epidemic exists on a long continuum. The free market, left to its own devices, will introduce all manner of products to consumers that may be dangerous or deadly. Profit is amoral in that way. Regulation may not solve everything overnight or halt wrongful or unfair deaths ever — ask any cyclist — but it seems obvious that it’s where action should start. In this, the FDA has been delinquent.

The newest crop in Kansas is bringing mixed results for farmers. 2019 is the first year people in Kansas are allowed to grow hemp.

“Consistently lot of farmers having trouble getting growing to start,” said James DeWitt, co-founder of United American Hemp in Olathe.

Weather conditions and access to hemp seed have been a struggle for some growers.

Right now, the only people that are allowed to grow hemp are those that applied to perform research to the Kansas Department of Agriculture. Research varies from types of seed, soil, to water usage.

DeWitt is researching how hemp reacts to different types of light.

“For us growing indoors made it very easy to fail over and over and over again without spending tens of thousands of dollars or an entire year of harvest cycle on something that didn’t produce,” he said.

He has learned the best ways to grow plants this year and plans to grow his business in the future by selling seeds and working as a consultant for farmers.

“Getting them the seeds and the clones to plant, getting them best practices to actually grow those plants, and then providing them with a contract to actually sell the product,” said DeWitt.

Officials at the Department of Agriculture are hearing from farmers that are growing hemp.

“It’s a new crop, so it’s a learning experience for everyone,” said Heather Lansdowne, director of communications for the Kansas Department of Agriculture.

“It’s been good that this first year is a research year, it’s been very interesting, we’re learning a lot, we know the growers are learning a lot about what works and what doesn’t work, and we’re looking forward to compiling that information so that we have a good wealth of knowledge as we move forward into the future,” Lansdowne said.

Earlier this year the legislature passed a commercial hemp bill, now the department of agriculture is writing rules and regulations for what the next industry would look like.

The commercial program could come as early as next year, and DeWitt has advice for farmers.

“Don’t overextend yourself, figure out what you’re doing, learn how to grow it and then be poised so that when we have a full commercial program and things get loosened up federally around the country, then you’re going to be in a great position to expand or increase your acreage,” DeWitt said.

In total, Kansas had 2,400 acres of hemp planted this year.

Leading e-commerce platform Shopify Inc. (NYSE:SHOP)(TSX:SHOP) has finally opened its internet doors to hemp-derived Cannabidiol or CBD. The company announced new features on its platform to help U.S. merchants sell these products online or in brick-and-mortar retail locations, as long as that state permits such sales.

“Shopify has unmatched expertise in emerging industries, along with the resources merchants need to be successful in the fast-growing market of hemp-derived CBD products in the U.S.,” said Harley Finkelstein, Chief Operating Officer, Shopify. “Shopify’s reliable technology and extensive partner network means that businesses can ride the wave of demand for these products and give consumers more choice.”

Shopify mentioned two CBD companies in the press release. Josie Maran and Cannuka will be able to sell hemp-derived CBD products as a result of the new features.. “This is an exciting time for the CBD skincare industry. Consumers are eager to connect with us and try our Skin Dope products. Until recently, we didn’t have a simple solution to manage and sell our CBD Oil and Hemp Seed Oil assortment online,” said Roger Wason, Director of eCommerce for Josie Maran Cosmetics. “Shopify has helped us focus more on our relationships with our consumers and growing our business.”

Pixel Union is a company that has been working with CBD merchants and note don its website that even though Shopify has now opened its doors, that doesn’t mean the payment systems are all available as well. “Shopify merchants still cannot use Shopify payment gateways, however, the e-commerce leader has partnered with Authorize.net, DigiPay, and eMerchant Brokers to provide seamless payment gateways for merchants to use.”

“In the last decade, e-commerce has grown 15% every year, yet it only represents 10% of total retail sales in the US. Pair that with legal CBD related products in the US being valued at $14.7 billion in 2019 and access to a proven platform like Shopify, I’m predicting unprecedented growth in 2020. We look forward to working alongside Shopify in helping merchants sell more,” says Pixel Union CEO, Ben Moore.

Find out how Emerald Scientific is bringing together analytical scientists to advance cannabis scienc

As the regulatory framework for the cannabis testing industry evolves, there is a growing need to bring together analytical scientists working in this field to help implement quality standards, as well as provide a unified approach to the advancement of cannabis science.

One company dedicated to the cause is Emerald Scientific. Co-founded by Wes Burk and Ken Snoke in 2013, Emerald Scientific is a California-based distributor of quality scientific equipment, supplies and reference materials exclusively for the cannabis industry. The company also offers proficiency testing for cannabis laboratories - The Emerald Test™ - and is the organizer of the Emerald Conference – a technical scientific meeting which highlights discovery science and technologies advancing cannabis science, from cultivation to pre-clinical research. 

In this interview, SelectScience speaks to Wes Burk, President of Emerald Scientific, to learn more about the impact of The Emerald Test™, the latest technologies advancing cannabis science, and for a sneak preview of what to expect from the Emerald Conference 2020.

Why is it so important to set testing benchmarks for cannabis testing?

WB: One of the biggest reasons is that we in this space tend to all be champions of the plant and its potential. On this path to legitimizing the plant and its use, we all have a responsibility to bring good science to the mix, and that includes creating a scenario for predictability and dependability when it comes to its use and results. So, the better the analytical segment in the industry does, the more reliable the products that are created based on that information, and the more positive experiences and exposure we can have in the press. We feel like supporting good science in the industry is a very strong way of advocating the evolution of legitimacy for the plant in general.

How has the Emerald Test impacted the cannabis testing industry? 

WB: As the regulatory framework evolves in the cannabis industry, as well as the accreditation segment, proficiency testing is required. Back in 2014 when we developed the test, no one was offering proficiency testing for the cannabis industry. In delivering that service, we really expedited the labs' capacity to stay in regulatory compliance and to achieve accreditation that many of the labs sought in the space.

How does the varied state-to-state legislation affect the way the testing works?

WB: That is still a very challenging paradigm. The scientific community in most other industries generally follow a federal course of regulation, and that doesn't exist for cannabis. One example is that from state to state, there are requirements for different analytes within a testing class – pesticides, for example. California has a very different list of required analytes to test for pesticides versus Oregon, versus Washington. That creates a challenge because an organization like Emerald Scientific, who is trying to provide certified reference material or standards for these tests, is challenged with — rather than having one standard off-the-shelf blend that meets the federal regulatory guidelines — having to attempt to compile specific products for each of the state requirements across each of the required product testing categories. 

Collaboration between testing laboratories is key to advancing the field of cannabis science. Image © epicstockmedia 123rf.com

Tell us about the history of the Emerald Conference

WB: Our first conference was in 2014, in San Francisco. It became very clear that there were a lot of bright minds in cannabis science that were becoming rather frustrated due to isolation - they found themselves practicing all alone and without viable avenues for collaboration. The Emerald Conference was the first time that these scientists, a lot of them analytical scientists, had a forum where they could come together and collaborate. 

We feel like there was a turning of the corner at that point — up until then, there was a pretty aggressive attitude about the science being conducted in the space and we feel like the Emerald Conference was the launching point for a shift towards a more collaborative spirit in the analytical sciences in cannabis. We embraced that philosophy and really have tried to continue to build the conference around that core value of collaboration. 

We feel like the Emerald Conference champions cutting-edge technology and science and offers scientists in the space a venue where they can not only collaborate, but really keep their finger on the pulse of the latest in terms of tech, trends, research, and clinical work.

What are the key themes for the Emerald Conference 2020?

WB: Evolution is a big theme for the conference. By that, we mean to highlight how things have changed in the industry over the past five to eight years — we went from a place where just performing simple potency tests was wrought with challenges, to now, where the industry is radically more sophisticated. We also see lots of scientists coming together and working on projects, and that's really accelerating the evolution of science in the space. 

What are some of the latest innovations in the cannabis testing industry that you expect to see highlighted at the conference?

WB: One technology that we've been watching for several years that we think is finally getting close to market-ready is point-of-use analytics – equipment for testing, for example, in a hemp field. The science has been a little bit slow in getting there, but we think that's one area that we're going to see some really exciting products brought to market in the next six to 12 months. 

In general, we’re also seeing a nice spike in clinical and preclinical work. So, we think that the science is going to start to become more reliable. There's also a move away from strain name nomenclature, and there are lots of vehicles that are becoming viable to do a better job in predictability of outcome - and that's an extraordinarily exciting place to be, and frankly, long overdue.

Finally, what are you most excited about in the cannabis testing industry right now?

WB: I think that for cannabis in general, the rapid adoption of hemp, and therefore the exposure to the common consumer to CBD, is really a momentum changer. I think ultimately, that is probably about the most exciting thing that's going on in the industry right now, and I think it will really expedite the evolution towards federal adoption of both hemp and, more broadly, cannabis.

Last week the U.S. Federal Trade Commission sent more warning letters to companies over claims it alleges have been made relating to cannabidiol (CBD).

This warning shot across the bows follows a round of letters sent in March this year by the FTC and U.S. Food and Drug Administration (FDA).

While not naming the targets in this latest batch, the FTC said the companies involved had advertised CBD products claiming they treat or cure various conditions, including Alzheimer’s disease, MS, colitis and cancer. Not all companies claimed therapeutic benefit for the same diseases or conditions.

The letters warn the recipients to review all claims – including those in published consumer reviews of products – to ensure they are backed by “competent and reliable scientific” evidence. It warns failure to do so could violate the FTC Act and may result in legal action; including orders to refund the money of purchasers.

The letters give the recipients 15 days to follow up with the FTC to let the Commission know what remedial actions have been taken.

Aside from this and the March letters, the FTC hasn’t had a lot to say on the cannabidiol situation in the USA. A search of “cannabidiol” on its website reveals just three entries – and all related to the letters.

The FTC is a bipartisan federal agency tasked with protecting U.S. consumers and promoting competition.

With regard to the FDA and cannabidiol, it’s a very different situation – but it’s charged with the heavy responsibility of protecting public health by ensuring the safety, efficacy, and security of products for human consumption. On the issue of cannabidiol, the FDA has had plenty to say.

But this doesn’t mean the FDA is hating on CBD. In fact, the FDA’s Principal Associate Commissioner for Policy – Office of Policy, Lowell Schiller, JD, recently stated the Administration is “excited” about cannabidiol’s potential. However, it is being very cautious.

So far the FDA has only approved one cannabidiol drug for human use and only with specific conditions – the incredibly costly Epidiolex for the treatment of symptoms associated with Lennox-Gastaut syndrome and Dravet syndrome.

Paraguay will begin accepting applications for the domestic production of cannabis for medical and research purposes next month, according to an announcement made last week by the country’s health minister. Julio Mazzolini, the minister of public health and social welfare, said in a press conference in Asunción on Thursday that a resolution to establish the rules to apply for the country’s first commercial cannabis production licenses had been approved by the ministry.

Licenses for five vertically integrated cannabis cultivation and manufacturing operations will be available. The National Health Surveillance (Dirección Nacional de Vigilancia Sanitaria/DNVS) will accept applications for the five licenses from October 1 through 31. Applicants will be required to include a certificate of good manufacturing practices; a plan for cannabis cultivation, transportation, and security; and a separate plan for exports, if applicable. The applicants that are awarded the licenses will be required to put them into use within 24 months.

Arnaldo Giuzzio, the chief of Paraguay’s anti-drug agency (Secretaría Nacional Antidrogas/SENAD), told the press that licenses would only be available to operations located in the Central Department, the smallest but most populated of Paraguay’s 17 departments.

Medical Cannabis Legalized in 2017

Paraguay legalized the medical use of cannabis in 2017 and a decree to regulate the national program was approved the following year. Qualifying participants under the national program are guaranteed free access to hemp oil and other cannabis derivatives.

Under the decree, licensed manufacturers will be required to donate 2% of their production to the Ministry of Health, a provision reiterated by Mazzolini at Thursday’s press conference. The ministry will distribute the products to domestic patients with a proven scientific need free of charge.

Only patients with a condition for which there is scientific evidence that cannabis may be a beneficial treatment will be eligible for the national program. The nature and amount of required evidence are not clear. So far, the use of medical cannabis has been approved for the treatment of refractory seizures, epilepsy, Parkinson’s disease, and other qualifying pain conditions.

Outside of the national program, a few patients who have demonstrated an exceptional need have received authorization to import cannabis products for medical purposes. One such patient is an adolescent with a rare form of severe epilepsy known as Lennox-Gastaut syndrome.

Also last Thursday, Paraguay’s Senate approved a bill that would permit the possession and home cultivation of medical cannabis for qualified patients and caregivers under certain conditions. The bill must also be approved by the country’s Chamber of Deputies before becoming law.

The pot industry is full of unknowns, yet investors are very much into the green rush. Global consumer cannabis spending could touch $16.9 billion this year, and marijuana sales worldwide could top $31.3 billion in 2022.

The optimistic forecast is only three years away. Now is the time to pick the pot stocks that are on the verge of growing in epic proportions.

CBD extraction providers

The business outlooks for Neptune Wellness (TSX:NEPT)(NASDAQ:NEPT) and MediPharm (TSXV:LABS) are favourable with the launch of new products in December this year. Both companies are the top names when it comes to extracting cannabidiol (CBD) from cannabis and hemp biomass.

CBD isolates are the main ingredients to create the new products that would be on sale soon. The cannabis producers would rely on Neptune and MediPharm to use innovative extraction and production methods to ensure the products would be of high quality.

The industry’s biggest extraction deal belongs to Neptune. This health and wellness turned cannabis extraction provider has a three-year with fellow cannabis firm The Green Organic Dutchman, or TGOD. Neptune will extract CBD from the 230,000 kilos of cannabis and hemp biomass that TGOD will supply.

Before the TGOD deal, the company had another three-year extraction services agreement with a significant industry player. Neptune will extract CBD from Tilray’s 125,000 kilograms of cannabis and hemp biomass. The deals guarantee Neptune’s cash flow for the next years.

Meanwhile, MediPharm is playing a crucial role in the advancement of CBD and the development of treatments for various medical conditions. The focus of this $571.5 million company is on cannabis concentrates.

MediPharm invests in a state-of-the-art extraction technology that is run by a research-driven team that uses downstream extraction methodologies. Its facilities are capable of producing purified, pharmaceutical-like cannabis oil and concentrates for advanced derivative products. Raking in cash therefore won’t be a problem.

MediPharm Labs’ process is a simple, but a high margin business model. The company receives dry cannabis flowers and trims from its product supply partners then produce cannabis oil concentrate. The end products would be for sale in the global market on a private label basis.

A solid partner for growth

Fire & Flower (TSXV:FAF) has a strong partner to help it capture a significant market share in Canada. The company’s digital platform is among the best locally. But in order to further achieve its goal of becoming a key player in North America’s cannabis industry, Fire & Flower welcomed a strategic investment from Alimentation Couche-Tard.

The cannabis retailer will use the funds to develop its Hifyre digital retail platform, a portion of which is for network expansion to add to the 23 licensed cannabis retail stores Fire & Flower is currently operating.

By combining its best-in-class retailing activities with Couche-Tard’s expertise in scaling retail stores, Fire & Flower could be a real force in the industry. You can also expect this small-cap cannabis specialist to make a big move soon —  it could list on either the NYSE or the NASDAQ.

Realistic growth

Neptune Wellness, MediPharm, and Fire & Flower are the budding wannabes with realistic chances of hitting it big in the cannabis industry. It’s your chance to purchase these stocks before the companies separate from the pack.