21st Century Cannabis: Getting The World In Tune

For cannabis to achieve ecological and economic success as a global commodity, we need international trade, which we’ve only begin to mobilize. We’re currently working to garner the support of those I met at the 2020 World Economic Forum for help with the challenges the industry now faces.

International trade for a new commodity demands that we align countries and continents in a unified way. This requires leadership and mindfulness to grasp the whole picture and then convey this message to global policy makers . To realize the full potential of the global cannabis industry, we need to get the world in tune.

Imagine that I’m a manufacturer of cannabidiol (CBD) products in Bogota, Colombia . Mind you, this is not your grandfather’s outlaw Colombia. The country now has a progressive regulatory scheme, an abundance of committed industry capital, an increasingly progressively educated middle class, and a population of 50 million. Despite all these developments, is there a viable domestic market for my CBD products? Not yet — and that’s why so much of Colombia’s focus has been on an export-only model .

Many foreign governments treat cannabis in terms of psychoactive cannabis (marijuana) and non-psychoactive cannabis (hemp). Seventy per cent of the Colombian populace is Roman Catholic and doesn’t make this distinction. It’s a drug, and given the country’s history with narco-trafficking, drugs carry an adverse image associated with mass violence. As a Bogota-based manufacturer, I turn my focus to the global cannabis economy, but my products are  stalled, if not prohibited, from export to lucrative cannabis markets in Europe and the U.S.

My position is affected by the lack of uniform regulations governing the distribution and regulatory treatment of these products in countries around the world . As a result, the landscape of distribution and retail outlets is quite narrow. Without crystal clear laws, the mainstream demand for these products is severely impacted.

The lack of uniformity in regulation also presents substantial challenges regarding import and export standards. In recent years, I’ve been invited to dozens and dozens of countries, including Colombia, and seen these problems firsthand . Goods shipped internationally need accompanying standardization certificates.

A phytosanitary certificate is an official document required when shipping regulated articles such as plants, plant products or similar commodities. This standardization document measures the control of plant diseases, especially in agricultural crops. Overseen by a government agency, the document ensures that plant matter is free of invasive pests prior to entering a new country.

For consumable products, these documents ensure they were manufactured in a GMP-accredited facility, produced to consumer standards, and regulated by the government in terms of production quality and consistency. These certifications are often misunderstood, or worse yet, overlooked. GMP (or “cGMP” – current GMP) means “good manufacturing practice,” and represents a system for ensuring that products are consistently produced and controlled according to quality standards. It is designed to minimize the risks involved in any consumable product production that cannot be eliminated through testing the final product.

Yet these standards are often not pursued due to costs or the miscomprehension that GMP cannot apply to cannabis materials and derivatives. Becoming GMP certified proves to your consumers and to applicable government agencies that you’re committed to the highest level of quality and practices to protect your products.

There’s also Good Agricultural Practices (GAP) and Good Handling Practices (GHP), voluntary audits that verify that consumable plant matter is produced, packed, handled, and stored as safely as possible to minimize risks of microbial food safety hazards. Finally, there is government-enforced consumer protection health and safety standards –- the same ones that would apply to any plant-based, consumable or food product. Sometimes, these are understood as food manufacturer’s licenses, or the local equivalent.

These standards have been put in place to ensure that products intended for human consumption are safe. So why can’t hemp-derived products be reliably exported from Colombia (or many other countries)? Because governments tend to treat cannabis products differently from other commodities. As a general rule, the same standardized controls and processes that other exports require aren’t being implemented for cannabis-derived products. If I could send one message to the global cannabis marketplace, it would be this: start treating these products like your other export commodities .

At the Hoban Law Group we often hear our U.S. clients say, “We’re waiting for the FDA to establish regulations.” Consider this: something is not illegal simply because it’s not regulated at the federal level. It’s a legal product unless it’s identified as a controlled substance, or otherwise legally prohibited. The Farm Bill removed cannabis with less than a 0.3 percent concentration of THC — defined as legal hemp — from the controlled substances list, so what are we waiting for? And many states have filled the regulatory void by permitting hemp derivative production facilities.

The standards already exist at the state and local levels. All companies should be following the tenets of the applicable FDA guidelines for foods and supplements. “Waiting” actually puts companies at a competitive disadvantage. If your company wants to participate in the growing global cannabis economy, it’s imperative to use the existing standards and rules dictating international trade — namely GMP standards, food and dietary supplement production standards, and the like.

There are hemp-derived products on shelves around the world that were manufactured in Colorado because these companies are following guidelines at the state level and the baseline FDA standards for foods and supplements. For more than five years, we’ve been advising Hoban Law Group clients to implement these guidelines voluntarily — even when it cuts into their profit margins — the best and safest way to position yourself for large-scale success “when the time comes.” Take a look around and you’ll realize that the time has come; standards already exist and Americans don’t usually wait for the government to tell them how to do something.

While this situation has improved dramatically and continues to improve with each passing week, it’s essential that the industry and corresponding policymakers recognize that consumer safety standards already exist. For cannabis to become the disruptive 21st century commodity we know it can be, we do not need to reinvent the wheel as it relates to safety standards for cannabis. An essential first step for any company with a meaningful chance of thriving in a national marketplace, let alone a global one, is to voluntarily adopt those standards and integrate those practices. Then you’ll be able to call your own tune.

By Robert Hoban, Contributor