Cannabis / Marijuana, EDITORIAL
International Distribution of Cannabis Extracts Inevitable: UN to Set the Table
By Anthony Wile - October 04, 2014

Just as we've predicted, the cannabis industry is expanding rapidly worldwide – and for people following this trend, there's exciting news almost every day. It's also raised a question I want to address in this editorial. More about that further down.

The biggest news involving the global cannabis trend has to do with something called UNGASS. The United Nations General Assembly Special Session is a meeting of UN member states that will consider and debate the world's drug control system.

Previous international symposiums – and the last was held more than 15 years ago – have supported total elimination of drugs. The upcoming UNGASS session will take the opposite perspective, focusing on the legalization of cannabis within an international regulatory framework.

From what I can tell, the goal of UNGASS – supported by political and industry leaders – will be to provide a template for the production and use of cannabis globally. Standards set forth by the UN and the World Health Organization will create guidelines for governments around the world to follow.

While global initiatives like UNGASS are being planned, there are also numerous initiatives percolating at domestic levels in the US, Canada and elsewhere.

An article this week at Syracuse.com reported on the efforts of New York Senators Schumer and Gillibrand to convince the US Department of Justice to grant a waiver to New Yorkers that would allow them to buy a particular strain of medical marijuana, "Charlotte's Web," to treat their children with seizure disorders without fear of federal prosecution.

This effort by two US senators to allow transport is a first step in the direction of what will become not just intrastate but international commerce of cannabis. Although New York did pass a medical marijuana law in July allowing limited access, implementation won't be effected for 18 months and in the meantime, critically ill patients could be helped quickly via such a waiver.

There's big news from a country almost synonymous with cannabis, even though its use has been prohibited there for nearly 100 years – Jamaica. According to the Cayman News Service, new "ganja" laws are on the way and will support "legal cultivation, possession, import and export, transportation, manufacture, sale, and distribution of ganja for medical and scientific purposes."

Given Jamaica's high profile as regards cannabis, the country may soon be perceived as a leader along with Uruguay in this sector. In fact, since Uruguay's legalization process has slowed down because of legislative wrangling, Jamaica could elevate its profile and emerge as the leader in this space.

Licenses will be required for production and sale, the terms of which are being worked out now. The article goes on to quote Jamaica's justice minister, Mark Golding: "The medicinal potential of extracts from both ganja and hemp is also recognized as having great economic potential."

The idea is to position Jamaica, said Golding, as a "forerunner in conducting research which will address the safety and efficacy issues related to extracts of medical cannabis. This research is fundamental to the development of new medicines and therapies derived from ganja and hemp."

Jamaica's entrance into cannabis production and distribution is a potential game-changer given its reputation and the quality of cannabis that has been produced there. The ability to leverage low-cost/high-quality production in places with ideal climates for cannabis cultivation and other positive factors, like Jamaica, assures the comparative advantage to companies providing cannabis extract products. In fact, this is basic economics, true of any business, as explained in 1817 with David Ricardo's theory of comparative advantage.

Canada has already authorized the import of cannabis from jurisdictions that legally allow export of cannabis, and companies are already preparing to fill this need as soon as the regulations are in place. So while the New York senators mentioned are working at the state level, this larger import-export issue is reflective of where we're headed as a global trend – import of high-quality, standardized cannabis extracts from jurisdictions that allow its export. And as with products like coffee, wine and other climate-sensitive products, imports will be from those who can supply the highest quality at the lowest cost. It's likely this market will be overseen by the UN and the World Health Organization

The 1961 Single Convention on Narcotic Drugs sought to "combat drug abuse by coordinated international action." An international treaty with 184 state parties, its goals were to limit production and supply of specific drugs to licensed parties only and to combat drug trafficking. With the legalization of cannabis in Uruguay, Colorado and Washington state, with many more jurisdictions to follow, the treaty has been breached to the extent the UN must reconsider its approach.

In March 2014 a report entitled "The Rise and Decline of Cannabis Prohibition: The History of cannabis in the UN drug control system and options for reform" was unveiled at the 57th session of the UN Commission on Narcotic Drugs (CND) in Vienna. The extensively documented report was the end result of a two-year joint effort of the Transnational Institute in Amsterdam and the Global Drug Policy Observatory at Swansea University. Its thrust advocates regulation rather than prohibition of cannabis around the world; the introduction states:

"These policy shifts go well beyond the permitted prohibitive boundaries of the UN drug control conventions. They represent a break with an historical trajectory founded on dubious science and political imperatives. And they have thrown the global regime into a state of crisis, as this report will argue."

As we've seen, the UN is increasingly involved in the details of creating an international regulatory regime; several subsidiary organizations are directly involved, with two of them based in the UN branch in Vienna.

One is the United Nations Industrial Development Organization (UNIDO), a specialized agency focused on boosting economies via the production of medicinal plants and building an extensive information database. The other is the United Nations Office on Drugs and Crime (UNODC), a United Nations office involved in the UNGASS 2016 session.

UNGASS will be the big meeting presenting high-profile guidelines, but the spadework comes from such organizations as the above – UNIDO and UNODC. Additionally, several international events are scheduled before the 2016 special session on drugs in New York, as well.

So … My Question

Now the question at the heart of this editorial: How far does one go in cooperating with formal efforts at regulation domestically and worldwide? It's surely a complex question, especially if you believe as I do that the best government governs least.

I think The Daily Bell was among the first, if not the first, to understand and then report on the significance of the upcoming 2016 UNGASS. At the time, we pointed out the special session had originally been scheduled for the end of the decade and that its repositioning some five years sooner was extremely significant.

For decades, activists have persevered seemingly against all odds to press for the legalization of cannabis. A new film that premiered this week, "The Culture High," features many of these passionate individuals as well as some relative newcomers to the issue. At The Daily Bell, we had the honor of interviewing one of the most outspoken, Dr. Lester Grinspoon, on August 31st: "Dr. Grinspoon's Kind War: Interview With a Renegade Marijuana Proponent."

For those committed activists who have been trying to create support for cannabis legalization, the UN's legalization promotion means they have now been joined by some of the world's most influential businessmen, politicians and diplomats.

Chief among these is George Soros who has used his Open Society Foundations to help pry open the debate on cannabis prohibition. Soros was instrumental in Uruguay's decision to legalize cannabis and is also a backer of Monsanto's efforts to create synthetic cannabis.

The Open Society website contains a report posted in March 2014 on the upcoming UN General Assembly Special Session on drug control. Here's an excerpt:

What Is UNGASS 2016?

Why does this summit matter? International debates on drugs are rarely more than reaffirmations of the established system. But 2016 is different.

Never before have so many governments voiced displeasure with the international drug control regime. Never before, to this degree, have citizens put drug law reform on the agenda and passed regulatory proposals via referenda or by popular campaigns. Never before have the health benefits of harm reduction approaches—which prevent overdose and transmission of diseases like HIV—been clearer. For the first time, there is significant dissent at the local, national, and international levels.

UNGASS 2016 is an unparalleled opportunity to put an end to the horrors of the drug war and instead prioritize health, human rights, and safety.

… If this event is slated for 2016, why are we talking about it now?

As with all UN summits, the preparatory work begins well in advance. The content, priorities, and strategies are determined months and years ahead of time. That's why it's time for people to speak out and tell their governments that the status quo is not acceptable. Change is possible, and the process is starting now.

Given the expansion of the international regulatory community, these are weighty issues. Does one retain one's ideological purity (whatever there is of it) by staying on the sidelines, or does one participate in a process via agencies like the UN that will affect the growth and maturation of an important industry?

I do believe that thanks to what we call the Internet Reformation, the tide of the regulatory state is ebbing. People generally, in my view, want more freedom and more market-based outcomes.

But the larger issue has to do with how much involvement committed activists want to have in structuring their industry. Does one continue to campaign for the freest possible outcome, or does one work within sociopolitical and legislative constraints to influence results from inside out?

I'm not grappling with this choice at the moment, but I am sure – given the background of those involved in the cannabis legalization campaign – that others may be. It's a question that may come to preoccupy many as cannabis matures as an industry and gives rise to numerous different businesses and professions.

I don't have all the answers. Do you?

High Alert is in the process of working with an early-stage company that is becoming strategically positioned to produce and export low-cost, medicinal-grade and standardized oil-based extract products to legal importers around the world. If you are interested in knowing more, send us an email at InvestorServices@thedailybell.com and we'll be in touch as soon as we're ready to publicly disclose and discuss the nature of this investment opportunity.

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Posted in Cannabis / Marijuana, EDITORIAL
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