Pyxus International intends to divest its cannabis business in order to focus on its more profitable tobacco and e-liquid businesses. In addition, the company has taken action to restructure its industrial hemp and CBD operations to minimize financial investment in that business.
“Our strategic decision to exit cash-flow negative cannabinoid operations will allow us to reduce corporate SG&A [Selling, general and administrative expense] and sharpen our focus on growing our more profitable tobacco and e-liquid businesses such that these complementary businesses can fully leverage Pyxus’ 145-year heritage and existing relationships,” said Pieter Sikkel, president and CEO of Pyxus International, in a statement.
“We maintain our belief that there is value in FIGR and its growth can be accelerated with the right capital structure and partner. The completion of our financial restructuring, global operations efficiency program, and continued investment in agronomy, traceability and sustainability are proving to be of significant value to our tobacco customers as we have started to work together on long-term strategic partnerships that support our objective of growing our market share.”
In connection with the plan, the company’s three Canadian cannabis subsidiaries, FIGR Brands, Canada’s Island Garden (FIGR East) and FIGR Norfolk filed for and received protection from their creditors under the Companies’ Creditors Arrangement Act (Canada).
Marijuana stocks have risen this week following the victories of Raphael Warnock and Jon Ossoff, both Democrats, in Georgia’s Senate election runoffs, reports Fox Business. Following President-elect Joe Biden’s win, Democrats will now have control of the presidency as well as both chambers of Congress. Democrats will have 50 seats in the Senate, giving Vice President-elect Kamala Harris the tie-breaker vote.
Canopy Growth, the first marijuana stock to ever be publicly traded in North America, is up 13.2 percent since the election. Shares of Green Thumb stock are up more than 10 percent.
“This new slate of leadership presents an incredible opportunity for national cannabis reform in the United States—the beginning of the end for the long-outdated prohibition on cannabis,” David Culver, U.S. vice president of government relations at Canopy Growth, told Fos Business. “We feel confident that Congress, with the support of the incoming Biden administration, and particularly Vice President-elect Kamala Harris who was an original sponsor of the MORE [Marijuana Opportunity Reinvestment and Expungement] Act, can achieve full federal legalization in the very near future.”
While Harris was against marijuana legalization while working as district attorney and attorney general in California, she changed her position in the Senate to co-sponsor the MORE Act. Biden, as well, favored decriminalizing marijuana during his 2020 presidential campaign.
Green Thumb Founder and CEO Ben Kovler predicts that a fully legalized marijuana market in the United States could be an $80 billion to $100 billion industry, according to Fox Business.
“Consumers are choosing; they’re replacing alcohol,” Kovler said. “Consumers 35 and under are choosing cannabis over alcohol. We’re seeing seniors, 60 and over, choose this to replace things like Ambien, or pain meds [for] arthritis. There are all kinds of different uses for the plants as we turn the plants into consumer products.”
Further legalization of marijuana could open new opportunities for tobacco farmers faced with declining demand for their crops.
The global industrial hemp market size is expected to reach $15.26 billion by 2027, exhibiting a revenue-based compound annual growth rate (CAGR) of 15.8 percent over the forecast period, according to Grand View Research. Additionally, according to Global Market Insights, the cannabidiol (CBD) market exceeded $2.8 billion in 2019 and is set to grow at around 52.7 percent CAGR between 2020 and 2026, with the global market valuation for CBD crossing $89 billion by 2026.
22nd Century Group has been granted a new U.S. patent related to the control of cannabinoid and terpene production in plants. This new intellectual property exclusively provides 22nd Century with unique and powerful tools to alter the cannabinoid biosynthesis pathway in hemp/cannabis plants.
“We are delighted to receive this patent, which is the result of work carried out by our own scientists. This important, new technology will allow us to genetically modify hemp/cannabis plants to modulate their cannabinoid and terpene profiles in order to tailor these plants’ therapeutic qualities and enhance the consumer’s hemp/cannabis experience,” said Juan Sanchez Tamburrino, vice president of research & development at 22nd Century Group in a statement.
“Our patent application describes eight promoters, which are essentially molecular on/off switches, covering all of the major steps in the cannabinoid biosynthesis pathway. Typically, developing hemp/cannabis plants with new cannabinoid or terpene profiles could take 10 to 20 years using traditional breeding methods.
“Now, with the combined technologies and know-how of 22nd Century and KeyGene, we expect to shorten the development timeline to create new, differentiated, hemp/cannabis plant lines in just four to five years. Doing so will provide the company and its potential licensees and customers with significant competitive advantage as hemp/cannabis continues to penetrate the life science, consumer product, and pharmaceutical markets.”
“At 22nd Century Group, we take a scientific and solutions-oriented approach to advancing ground-breaking, plant-based technology. We are excited to secure this patent, and we believe that it demonstrates our unique and leading role in plant science innovation within the $100 billion global hemp/cannabis market,” said James A. Mish, chief executive officer of 22nd Century Group.
The new patent, published as U.S. Patent No. 10,787,674 B2 and entitled “Trichome specific promoters for the manipulation of cannabinoids and other compounds in glandular trichomes,” enables 22nd Century to develop and deliver new hemp/cannabis plants that are designed to produce cannabinoids more efficiently.
The company can potentially increase the yield of plants, stabilize the level of cannabinoids that are produced, and create custom cannabinoid profiles optimized for specific therapeutic uses. 22nd Century will also be able to potentially modulate the terpene levels within the plant—increasing them to deliver new strains of cannabis for the adult-use/recreational market and reducing them to remove the odor and taste for improved application in foods and beverages.
Cannabinoids, such as CBD, CBC, and CBG, are valuable compounds that hold great promise for the development of new medicines and other therapeutic applications. Cannabis sativa is the only plant species that produces significant amounts of these compounds including more than one hundred different cannabinoids in varying quantities.
In nature, cannabis plants restrict production of these potentially toxic compounds to the trichomes which are tiny hair-like stems and globes that grow on the surface of the plant. To successfully manipulate cannabinoids, the company’s new technology activates molecular promoters, “on/off switches,” specifically and only in the plant’s trichomes where the majority of cannabinoids are produced.
These regulatory sequences dynamically enhance or restrict gene expression levels, controlling the expression of genetic information that leads to the production of cannabinoids.
In a vote mostly along party lines, the U.S. House of Representatives approved decriminalizing marijuana at the federal level on Friday. It’s the first time Congress has acted on the issue.
Credit: Louis Velazquez
The vote passed 228-164 with five Republicans and the lone independent member joined Democrats to pass the bill. Six Democrats voted no.
Branded as the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) the bill removes marijuana from the list of federally controlled substances. It also facilitates canceling low-level federal convictions and arrests related to marijuana.
The legislation is not expected to pass in the Republican-controlled Senate, according to NPR.
The bill is a way for Democrats to send a message about their outlook on drugs in a nation where more cities and states already have become more accepting. It creates an excise tax on cannabis sales and directs the money to be targeted to communities adversely affected by the so-called war on drugs.
The bill specifically adds incentives for minority-owned businesses to help them enter the cannabis market, which has exploded in recent years given the relaxation in controls in some places within the United States.
Zimbabwe’s earnings from cannabis exports could outstrip those of tobacco by almost three times, according to local officials, reports Bloomberg.
Last year, the southern African nation legalized cultivation of cannabis for medicinal use. Since announcing rules for growing cannabis in September, the government has issued 44 licenses. Zimbabwe neighbor Malawi decriminalized cannabis earlier this year.
Treasury spokesman Clive Mphambela expects sales to reach $1.25 billion in 2021. By comparison, Zimbabwe earned $444 million from the 2020 marketing season that closed in August, according to the Tobacco Industry and Marketing Board.
John Robertson
John Robertson, an independent economist based in Harare, said the projections were ambitious. “It’s a massive overestimate and ignores that cannabis is grown in many markets outside of Zimbabwe,” he told Bloomberg.
“It’s sold in grams, not in kilograms or tons, so there will be disappointment,” Robertson said. “The only enthusiasm will be from producers, but massive supply globally will depress prices.”
South Africa, Malawi, Zambia and Lesotho have also legalized medicinal cannabis.
In his budget statement on Nov. 26, Finance Minister Mthuli Ncube said cannabis production for medicinal purposes has “immense potential” to generate export receipts and tax revenues. A so-called cannabis levy will be introduced next year, in line with export values, Ncube said. Taxes of as much as 20 percent will be applied on oils, bulk extracts and dried cannabis flowers.
Growers, most of whom are locals with international partners, can produce $40 million to $46 million worth of cannabis a month, underpinning Treasury’s “very conservative” estimates, Mphambela said.
The United Nations (UN) has voted to reclassify cannabis as a less dangerous drug, reports The New York Times. The decision pertains to cannabis used for medicinal purposes.
Cannabis has been listed on Schedule IV of the 1961 Single Convention on Narcotic Drugs alongside drugs like heroin. The decision removes cannabis from this list.
The vote passed 27 to 25, with the U.S. and European nations among those in favor and China, Egypt, Nigeria, Pakistan and Russia among those opposed.
The change will open the door to more medical cannabis research. Local governments will still decide how to regulate cannabis, but many governments look to bodies like the U.N. for guidance.
“This is a huge, historic victory for us; we couldn’t hope for more,” said Kenzi Riboulet-Zemouli, an independent researcher for drug policy who has closely monitored the vote and the position of member states.
The proposal was first presented in 2019, but because the decision was highly politicized, a final vote had been delayed.
Malawians are hoping that hemp earnings will help offset declining tobacco revenues. (Photo: Taco Tuinstra)
Malawi is ready to start commercial production and processing of cannabis for medicinal and industrial use, reports Reuters, citing the country’s newly created Cannabis Regulatory Authority.
In February, Malawi’s parliament passed a bill that makes it legal to cultivate and process cannabis for medicines and hemp fiber used in industry but stops short of decriminalizing recreational use.
The board chair of Malawi’s regulator, Boniface Kadzamira, said his board had received more than 100 applications for licensing which were under review.
The license fees will range from $100 to $10,000 a year for the cultivation, selling, storage, distribution of industrial and medicinal hemp.
Kadzamira believes hemp has the potential to surpass earnings from tobacco, currently the country’s main export crop.
Malawi’s earnings from tobacco have fallen dramatically over the years in part due to declining demand and poor weather.
During the 2020 season, Malawi’s tobacco output fell by 31.3 percent, resulting in a 26.4 percent decline in the country’s overall tobacco revenues.
Due to the disappointing earnings, the country’s tobacco auctioneer, Auction Holdings, has failed to pay salaries for the last two months.
Cannabix Technologies plans to begin beta testing its marijuana THC Breath Analyzer version 3.0 with an occupational health care provider in southern California early next year. Newport Beach-based Alipour Medical Centre provides drug and alcohol testing services to a number of local employers in the state.
Credit: Elsa Olofsson
After the recent election, 33 U.S. states now have some form of legal marijuana. The THCBA is an ideal device for employers and other markets who are seeking a way to quickly, easily and non-invasively test for recent use of Delta9-tetrahydrocannabinol (THC) – the psychoactive component of marijuana that causes impairment, according to a press release.
Alipour Medical Centre provides drug and alcohol testing services to a number of local employers in the state. Cannabix will be seeking additional organizations for beta testing. Interested parties to contact the company via its website www.cannabixtechnologies.com.
“The Cannabix device allows for more relevant THC detection from breath allowing employers to create an onsite regiment whereby they can perform pre-access testing for recent use of marijuana before and during work hours, instead of testing for drug use when employees are not at work,” the release states. “Cannabix will be beta testing its device in order to continue training the device’s machine learning database and improve user experience through testing feedback. The THCBA has been built to provide easy to understand screen prompts for the positive and negative detection of THC in breath in a portable manner, and can be administered without extensive training.”
Current forms of testing for marijuana use can identify THC ranging from minutes to days prior to actual use, making it impossible to show the difference between the two. Studies¹ have shown that breath is a better indicator of impairment than saliva, blood or urine because THC is present in breath for a relatively short period of time (1-3 hours); whereas, it is excreted at detectable levels in other body fluids for many hours, days, or even weeks after smoking. This short time period of detection in breath aligns with the peak impairment window.
“We are very pleased to be using one of the world’s first marijuana breathalyzers in our medical facility. We know first-hand how the legalization of marijuana has affected employers in our state. As occupational health practitioners based in Orange County, we understand the challenges that employers are facing in providing relevant drug testing for existing and new employees,” said Dr. Nima Alipour, CEO of Alipour Medical Corp. “We advise corporations on how best to keep their workforce safe; identifying safety issues as they pertain to impairment, while taking into account employee rights in an environment of state legalization.”
Marijuana legalization is on the ballot in five U.S. states on Nov.3, four of which are for recreational use. The financial crisis cause by the Covid-19 pandemic and potential to bring in more taxes are the motivation for the measures.
In less than 2 weeks, voters will decide on whether to legalize recreational marijuana in Arizona, Montana, New Jersey and South Dakota. Mississippi will also consider a pair of ballot initiatives to legalize medical marijuana.
Despite COVID-19 risks, advocates managed to collect more than 661,000 signatures in four of those states in the 2020 election cycle to put the questions on the ballot, according to rollcall.com. Some began before the pandemic hit, while advocates with later deadlines added protective steps like using individual plastic-wrapped pens.
In recent years, 11 states and the District of Columbia have legalized recreational marijuana for adults 21 years old or older, while 33 states plus the District have legalized medical marijuana for some patients.
If successful, as is likely in all the states this year except possibly Mississippi, the new legalization efforts could altogether bring in hundreds of millions in tax revenue, which could help blunt the impact of states’ plummeting revenue due to the economic collapse, according to rollcall.com.
Matthew Schweich, deputy director at the Marijuana Policy Project, said many supporters were already swayed by the revenue marijuana taxes bring in. The dire budget conditions of many states could increasingly become a strong argument in favor of legalization.
“Voters are aware of the fiscal pain that’s already here or coming down the road. I believe they’re seeing marijuana revenue as part of the solution,” he said.
The U.S. House of Representatives may soon vote on a historic measure to end federal prohibition on cannabis. Ironically, just as the public and political leaders realize the folly of prohibiting cannabis, we are rushing toward a new prohibition with many of the same pitfalls.
Prohibiting nicotine vapor is unjustified by all the science so far, which shows health risks are low. Worse, prohibition would prove tragic for smokers, who will be deterred from quitting their deadly habit, Michelle Minton wrote for insidesources.com.
When e-cigarettes entered the U.S. market in 2007, opponents argued there was limited evidence about product hazards. That implied opponents would relent if and when scientific evidence could establish e-cigarettes’ relative safety. Yet, as evidence mounted, incontrovertibly proving vaporized nicotine was much safer than smoking, efforts to prohibit vaping have only amplified.
It should have been good news when research literature established nicotine vaping as a more effective for smoking cessation than traditional nicotine replacement therapies. It should have been good news that e-cigarettes didn’t prove a “gateway” for youth smoking that, in fact, youth smoking is at an all-time low.
MIchelle Minton / Credit: Competitive Enterprise Institute
And it should have been good news that research failed to link nicotine vaping with significant negative health outcomes, even for those who never smoked. Smokers who switch to vaping actually show rapid improvements in heart and lung health and reduced risk of smoking-related cancers.
Thus, converting smokers to vapers could save millions of lives.
But for opponents of e-cigarettes, this evidence isn’t enough. They demand proof that e-cigarettes are 100 percent harmless, an impossible benchmark for any product. The evidence on cannabis is not conclusive, either. For example, there is limited data on how THC impacts cardiovascular health or how cannabis use in adolescence affects future development.
But that didn’t stop the public and lawmakers from supporting efforts to decriminalize or legalize the drug. Rightly so. Science has a hard time identifying small effects. Thus, after decades of research and centuries of use, of the failure to establish significant harms from cannabis use indicates the harms are marginal.
That is, cannabis as typically used poses minimal risks for most people, though risks might be greater for certain subgroups or atypical use.
Conversely, harms caused by prohibition are large and apparent. Not only did prohibition fail to stop people from using cannabis, it spawned a dangerous illicit market, cost billions in enforcement, fomented distrust of law enforcement, devastated communities, and ruined countless lives. Against these costs, concluding that it’s better to give adults access to a legal, regulated market, is obvious.
That is the conclusion we should have reached for non-combustible nicotine. After more than a decade of intense research, science has yet to link nicotine vaping to any major negative health effects. Many studies claim to have identified potential risks of vaping, but there are an equal or greater number of studies with opposite conclusions.
What this tells us is the risks of nicotine vaping are likely marginal. And, as with cannabis, there are clear benefits to use of nicotine vapor in terms of health and recreation.
Conversely, attempts to ban, restrict and heavily tax vapor products have and will continue to inflict a great deal of harm. Banning flavors, restricting sales, and heavily taxing products pushes consumers toward illicit dealers, knockoff products and more dangerous substances. Such policies also drive people back to smoking.
Yet opposition to these products has grown more extreme and widespread. Contrary to opponents’ rhetoric, their opposition has nothing to do with science and everything to do with morality. Cannabis use is no longer deemed socially unacceptable. But nicotine, thanks to its association with smoking, has only become more stigmatized and no amount of proof will change the minds of those morally opposed to its use.
Anti-vaping activists will continue to pursue bans and outright prohibition of these products, no matter how safe the science says they are or how many people will die as a result.
Michelle Minton is a senior fellow with the Competitive Enterprise Institute. She wrote this for InsideSources.com.
