Medical marijuana: Could loophole in new law give Big Pharma foothold in Colorado MMJ biz?

Large pharmaceutical companies could potentially make billions if marijuana is legalized in the United States. But could Big Pharma enjoy a windfall in Colorado right now? A clause of HB 1043, the MMJ cleanup bill signed by Governor John Hickenlooper last week, contains a potential loophole allowing out-of-state firms to get involved in the industry outside of centers and grows.

Here's the section of the bill in question:

A medical marijuana center may provide a sample of its products to a laboratory that has an occupational license from the state licensing authority for testing and research purposes. The laboratory may develop, test, and produce medical marijuana-based products.

This passage appears to bless the expansion of MMJ lab facilities in the state -- one of the primary goals of bill co-sponsor Tom Massey.

Back in January, when the measure was still in flux, Massey told Westword he wanted to "create a venue where we can have testing facilities and labs and also encourage that those be utilized for research and development and product testing. Since we can't get data from the federal government on this, we need to be proactive in this state -- and Colorado is on the cutting edge of this industry. And how do we know what's an appropriate dose for individual patients? We're more or less doing this by trial and error, and we could use some real research. We could be pioneers in Colorado, and if this is really here to stay, we need to address the research and development piece."

Even more interesting is the 1043 line establishing that labs can develop and produce MMJ products -- thereby creating a platform for what could become a national or even international industry, especially if laws change. But what rules would govern these labs? And how would they get their cannabis? That's spelled out as the aforementioned passage continues:

The laboratory may contract method or product development with a licensed medical marijuana center or licensed medical marijuana infused-product manufacturer. The state licensing authority shall promulgate rules pursuant to its authority in section 12-43.3-202(1) (b), C.R.S., related to acceptable testing and research practices, including but not limited to testing, standards, quality control analysis, equipment certification and calibration, and chemical identification and other substances used in bona-fide research methods.

This language suggests that a medical marijuana lab would be licensed in much the same way as a testing facility focusing on any other product or products, without being hamstrung by the complicated regulations, restrictions and licensing requirements MMJ centers and grows must meet. And who could be approved to open and operate such a lab? The answer, from the bill:

A laboratory that has an occupational license from the state licensing authority for testing purposes shall not have any interest in a licensed medical marijuana center or a licensed medical marijuana-infused products manufacturer.

In other words, HB 1043 specifically precludes any current dispensary owners or IPM entrepreneurs from being licensed to run a lab. And since there's no mention of residency requirements or the like as pertains to MMJ lab ownership, the bill would seem to open the door for out-of-staters to launch such an enterprise and begin full-scale product development.

What's an expert on medical marijuana legislation and its possible ripple effects think of this theory? We asked attorney Warren Edson.

"It seems to be an interesting change in our rules and regs," he notes. "It should allow for more research and development. It essentially allows this state to become the hub of research and development in the cannabis industry.

"Given the restrictions involved with the licensing" of infused-product facilities, as well as MMJ centers, "it will be interesting to see how this changes the infused-product aspect of our industry -- and whether we will see more labs," he adds.

Interesting, indeed -- and potentially game-changing.

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