Attitudes toward cannabis are shifting internationally. Both local and state governments are reconsidering the medical applications of this plant, and even weighing the social impacts of treating cannabis like alcohol. As the negative stigma is slowly removed, we can anticipate investors looking for money-making opportunities in the emerging industry.
During the years of prohibition, cannabis production was carried out almost exclusively in secret. Even the most popular geneticists, cultivators, and infused-product manufacturers were reluctant to publicize their brand. But the recent acceptance of cannabis and the regulations that appear with legalization have forced many of these operators into the spotlight. For those that have been working in cannabis for decades, a new problem is arising. Now, family-operated businesses, generally with very little marketing experience, are competing head-to-head with commercialized juggernauts with extensive financial war chests.
But cannabis was built on compassion and community, and most people recognize the hard work and immense personal risk that small cannabis businesses have accepted to get us to where we are now. However, now that cannabis is more widely available, a new demographic of consumers has entered the mix, and many are unaware of the recent history of the industry. For big businesses and wealthy investors, controlling the future of cannabis is a very real possibility.
Despite safeguards from cannabis monopolies, much of capitalist industry is governed by personal connections and surreptitious deals behind closed doors. Regardless of the actual quality or potency (or safety) of the cannabis medicine they produce, major investors and conglomerate consumables manufacturers see cannabis as low-hanging fruit. Big-business-as-usual will likely win over the inexperience of the cottage industry.
The ironic twist is that in order to succeed, big business will have to emulate the holistic approach associated with the cannabis community. Do not be surprised to see huge companies preaching the for-the-people sermon that has propelled cannabis legislation, because it is already happening.
There are a few examples of pharmaceutical and major consumables companies entering the cannabis space. Each one of these new players is hoping to become a staple among the compassionate cannabis community, and yet they are unwilling to drop their normal business abuses.
Some Examples of Bad Business Ethics Spilling Over from Other Industries
One such example is Insys Therapeutics, who are currently marketing a cannabinoid-based medicine that meets the pharmaceutical consistency requirements demanded by the FDA. Insys currently makes the majority of its money manufacturing a fentanyl-based pharmaceutical. Fentanyl is a major contributor to the opioid epidemic with a potency nearly 50 times that of morphine, and is responsible for the death of music icon Prince.
Insys is currently being sued by several state Attorney Generals over serious violations of aggressively marketing this incredibly strong and dangerous painkiller. However, lawsuits against their poor business ethics didn’t stop Insys from donating half a million dollars to the group opposing recreational cannabis in Arizona. According to Insys, recreational marijuana would harm the community in irreversible ways. The medical benefits of cannabis would most likely hurt Insys’ bottom line far more than the community. Arizona currently has about 90 opioid prescriptions per 100 residents, and when recreational marijuana failed to pass this November, Arizonans flocked to get their medical cannabis recommendations.
Insys is a perfect example of the rampant opportunism that is poised to infect the cannabis community. Groups that are concerned with profits over people threaten the compassionate that structured modern cannabis, and what is worse is that they will lie through their teeth to appeal to the demographics concerned with health.
Unfortunately, Insys Therapeutics is only one fish in a big pond of businesses and investors that all want to be the next iconic industry leader. What’s worse is that there is very little precedent to differentiate between those entrepreneurs that are hoping to create a valuable and worthwhile product, and those that are willing to exploit a humanistic message without bringing anything useful to the community.
One such ambiguous actor is Syqe Medical Ltd., an Israeli company that has been raising capital to develop and distribute a medical cannabis inhaler that pushes the technological boundaries of dose accuracy. This sounds like a revolutionary device with incredible potentials for medical benefit, right? It sounds like a fantastic product that could improve the way we all think about cannabis medicine.
And then you look at the investors of Syqe Medical Ltd., and you wonder whether the historically deplorable actions of Big Tobacco and Big Pharma will rub off on their little cannabis protege. Syqe Medical received $20 million from Philip Morris International in January of this year, and just inked a marketing deal with generic drugmaker Teva Pharmaceutical industries Ltd. Just this month, Teva received notification of a series of lawsuits against them alleging securities fraud, antitrust violations, and presenting false financial statements to investors.
People can be scummy, especially when millions of dollars are at stake and the victims are faceless shareholders and customers. And despite all of the positivity engrained into the cannabis industry, opportunism is already seeping through the cracks. Take, for instance, Rob Weakley, CEO of Altai Brands. Altai blasted on the cannabis scene with strong financial backing and aesthetically-pleasing packaging. This gave them a leg-up against other emerging companies that were struggling to get into California dispensaries. Altai was doing really well by standards of the cannabis industry, a fledgling success story with seemingly humanistic motives.
Then in July, one of the two major investors of Altai sued Weakley (and the holding company INDUS) for several CEO no-nos: lying about personal stake into the company, living lavishly on the company’s dime, firing the CFO and refusing to hire a new one (most likely to conceal financial malfeasance), and ultimately defrauding the investor of $750,000 under false pretenses.
Altai is also in hot water for hiring a model as a meat platter for their Las Vegas party during the national conference held there earlier this November. The cannabis industry includes a much higher percentage of female executives than traditional business would dictate, and this example of thoughtlessness is a harbinger for the evolving cannabis industry. Clearly, cannabis is not immune from the opportunism, sexism, and illegality that drive other consumables industries. But if we work together, we have the power to break tradition and keep cannabis business in the hands of those who care.
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