Master Slide Deck

Cannabis Law & Policy Virtual Summit April 21, 2019 Kick Off Remarks

New York Attorney General North Dakota Attorney General Tish James Wayne Stenehjem Attorney General Alliance: 43 Members and Participating States

Cannabis Project

Study legislation and regulation

Educate members on emerging trends

Convene forums for discussion

Supported by AG Advisory Council Industry Working Group Attorney General Authority

Panelists Micah Tapman – BDS Analytics Alissa Gardenswartz – Brownstein Hyatt Farber Schreck Agustin Rodriguez and Bill Hurd – Troutman Sanders Jerry Kilgore – Cozen O’Connor, Former Attorney General of Virginia Micah Tapman BDS Analytics Who is average cannabis user and what are the national market projections BDSA MARKET OVERVIEW

AG Alliance Cannabis Project Cannabis Law & Policy Virtual Summit

April 21, 2020

Purchasing through specific retailers licensed at the state level (THC) – CBD loosely regulated

• FDA approved • Epidiolex (GW Pharma) Medicinal (Pharma) • Epilepsy focused Conventional (CBD) • CBD compound

• Nutraceutical or functional food analog Medical/Wellness • Not FDA approved or doctor prescribed • Commonly used for pain/sleep/anxiety/etc. • Sold in conventional channels & online • Licensed retailers • FDA approved topical use (not ingestion) • Larger retailers abiding by FDA guidelines • Smaller retailers ignoring ingestion prohibition • Analog to alcohol • Confusion rampant among consumers on benefits • Dosage ~5-10mg/serving and risks Recreational/Adult Use • 21+ age restriction on purchase • Licensed retailers (dispensaries)

Worldwide Cannabis Market Size Forecast • Growth driven by $50 • Need/want – wellness & relaxation as primary motivators • Awareness – general knowledge and acceptance of cannabis $45 products and their benefits $40 • Availability – shift to trusted legal purchasing sources $35 • THC, CBD, CBG, CBN, etc. • Increased knowledge and desire for different cannabinoids $30 • THC = “getting high” but also pain relief, relaxation, etc. $25 • CBD already approved by FDA for topical use + Epidiolex for epilepsy $20 • CBG, CBN and other secondary cannabinoids showing various functions such as sleep aid $15 • New Products $10 • Better products created to fit certain needs $5 • Low dosage servings (1-3mg THC) • Fast-acting formulations (rapid onset) $0 • Beverages for social occassions 2018 2019 2020 2021 2022 2023 2024 2025

BDSA April 2020

What are their demographic & lifestyle characteristics? Compared to all adults 21+, past 6-month marijuana users are more likely to… • Be male (57% v. 48%) • Be younger (43 v. 49) • Have lower income ($50K v. $63K) • Have a college degree (47% v. 34%) • Work out at a fitness center regularly (31% v. 22%) • Spend more for higher quality products (47% v. 39%) • Engage in social activism (33% v. 20%)

71% Recreational & Social 32% Consume for 63% Health or Medical Recreational & Social and Health or Medical Reasons

How do they buy and use marijuana? • 74% shop for marijuana at a recreational or medical dispensary • Spend over $200 per month on marijuana or CBD products • Inhalables (flower, vapes, etc.) are the most popular product form, preferred by 60% of consumers • Usage focused on wellness benefits

BDSA Consumer Research Q3 2019: U.S. adults 21+ in Legal Level 1 States

Marijuana Acceptance is “Mainstream” and Growing

…of adults 21+ in Fully Legal U.S. States Consume Cannabis or are % Open to Consuming 69 Cannabis 38% Consumers 31% Acceptors are Rejecters 31% (would not consider in the future) P6M Consumers Non

BDSA Consumer Research Q3 2019: U.S. adults 21+ in Legal Level 1 States RAPIDLY INCREASING CONSUMER BASE

Colorado consumer base (per capita) almost doubled from Q1 2017 – Q3 2019

Percent of Adults 21+ Consuming Cannabis (CO & CA)

42%

37%

increase in % +75% of CO Consumers 24% 23%

Q1 2017 Q1 2018 Q3 2018 Q1 2019 Q3 2019

California Colorado

BDSA Consumer Research Q3 2019: U.S. adults 21+ in Legal Level 1 States

State Attorney General Consumer Protection Authority:

• State unfair deceptive acts and practices (UDAP) laws • Enforcement authority under certain federal consumer protection laws • Parens patriae authority/common law

• Advertising/Marketing claims • Similar to enforcement around nutritional supplements • Health benefit claims • Misrepresentations about product quality (pesticide free, organic) • Misrepresentations about product composition (e.g., THC levels) • A note about COVID-19 • Public health implications • Similar to enforcement around tobacco and opioids • AGs using UDAP and other laws to protect health and safety of their constituents • Licensing/regulation comes into play

• Differences in federal and state legality

• Evolving industry

• Recreational and medicinal

© 2019 Brownstein Hyatt 18 Farber Schreck, LLP Agustin Rodriguez and Bill Hurd Troutman Sanders Unpacking Government Restrictions on First Amendment Commercial Speech Cannabis Law & Policy Virtual Summit

Advertising and the First Amendment

William H. Hurd Agustin E. Rodriguez Direct: 804.697.1335 Direct: 804.697.1381 Mobile: 804.201.7846 Mobile: 804.629.0669 [email protected] [email protected] April 21, 2020 First Amendment and Commercial Speech

Speech that only proposes a commercial transaction is protected by the First Amendment.

Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748 (1976)

21 First Amendment and Commercial Speech

Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980)

22 First Amendment and Commercial Speech

Four-Part Analysis 1. The speech must concern lawful activity and not be misleading. 2. The asserted governmental interest must be substantial. 3. The regulation must directly advance the asserted interest. 4. The regulation must not be more extensive than necessary.

Central Hudson, 447 U.S. at 566

23 First Amendment and Commercial Speech

 Things you can say  Things you cannot say  Things you can be required to say

24 First Amendment and Commercial Speech

Struck down ban on cigar and smokeless tobacco advertising within 1,000 feet of school.

Struck down ban on point-of-sale tobacco advertising lower than 5 feet from floor.

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001)

25 First Amendment and Commercial Speech

A further twist on compelled disclosures… Required disclosures may reach beyond what is required to prevent deception. May require purely factual and uncontroversial information about the terms under which products or services are available.

American Meat Inst. v. U.S. Dep't of Agric., 760 F.3d 18 (D.C. Cir. 2014)(en banc) (upholding country-of- origin disclosure on meat products).

26 First Amendment and Commercial Speech

These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

27 What is Cannabis?

Cannabis sativa

Marijuana Hemp Cannabinoids Federal Regulatory Landscape

Industrial Recreational Medical CBD from hemp hemp (and other hemp extracts) Marijuana Hemp Cannabis Federal Regulatory Landscape - FDA and FTC Warning Letters

• September 10, 2019: FTC announced it sent warning letters to certain companies regarding cannabidiol (CBD) claims regarding treatment of serious diseases including Cancer, Alzheimer's, and Multiple Sclerosis • November 25, 2019, the U.S. Food and Drug Administration (FDA) announced that it issued warning letters to 15 companies for illegally selling products containing CBD while allegedly making unapproved drug claims for humans and pets (e.g., claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety) – Also published revised Consumer Update • Since March 31, 2020, FDA has issued several warning letters to CBD consumer products companies claiming their CBD products cure or protect against COVID-19 • Lack of First Amendment advertising cases (and federal enforcement litigation generally) – Conant v. Walters (9th Cir. 2002)

30 Consumer lawsuits

• Six class actions filed against companies marketing CBD products – Plaintiffs’ claims are based on marketing practices prohibited by FDA, but only two of the four defendants received FDA warning letters. • McCarthy v. Elixinol (N.D. Ca.) • McCarthy v. Charlotte’s Web Holdings Inc. (N.D. Ca.) • Colette v. CV Sciences, Inc. (C.D. Ca.) • Dasilva v. Infinite Product Co. LLC (C.D. Ca.) • Fausett et al. v. Koi CBD LLC (C.D. Ca.) • Pfister v. Charlotte’s Webb Holdings, Inc. (N.D. Ill.) • Advertising resulting in a private claim based on the Racketeer Influenced and Corrupt Organizations Act (RICO) – Horn et al. v. Medical Marijuana Inc. et al. (W.D. Va.) • Weedmaps (August 2019)

31 State Regulation

• Courts are not unanimous on whether to extend First Amendment protections to marijuana plaintffs, even where there is a state marijuana regulatory regime – Montana Cannabis Industry Assoc. v. State of Montana (MT S.Ct. 2016): an activity that is not permitted by federal law —even if permitted by state law—is not a “lawful activity” within the meaning of Central Hudson's first factor. As such, the advertisement of marijuana was not speech that concerns lawful activity. – Plausible Products, LLC v. Washington State Liquor and Cannabis Board (King County Sup. Ct. Nov 18, 2019): held that an order directing a marijuana shop to remove holiday lights in the window that were arranged to spell “POT” was based on unconstitutional provision of state law relating to the content, size, and manner of affixing on-premise advertising by marijuana retailers – Ultra Health, Inc. v. Kennedy et al. (D.N.M. Jan. 30, 2019): the Court held that New Mexico State Fair officials’ attempt to restrict how and what Ultra Health, a medical marijuana dispensary operator, could display regarding its cannabis cultivation tools and cannabis plant imagery at the 2017 State Fair. • Apri 1, 2020 New York AG letter re: Finest Herbalist – See dietary supplement disclaimer on slide 8 • No cases of compelled speech by cannabis companies have yet come to the fore

32 Takeaways

• The framework for First Amendment analysis has already been set • Not many First Amendment court decisions related to cannabis • Marijuana advertising can receive First Amendment protection – Deceptive or commercially unfair speech is not entitled to First Amendment protection – Courts are not unanimous on whether the federal illegality of marijuana is a bar to First Amendment protection • Can companies cure potentially misleading advertising by disclaimer?

33 3 4 Jerry Kilgore Cozen O’Connor Compliance measures by licensed cannabis businesses to protect consumers Q&A Cannabis Law & Policy Virtual Summit April 21, 2019 Public Health

Moderator Erin Williams – Oregon DOJ

Panelists Dr. Susan Weiss – National Institute of Drug Abuse Katie Laughery – Drug Enforcement Agency Elyse Contreras – Colorado Department of Public Health & Environment Garth Van Meter – Smart Approaches to Marijuana Mark Bolton – GW Biosciences Beau Kilmer – RAND Corporation Dr. Susan Weiss National Institute on Drug Abuse Risks associated with cannabis use on the developing brain CANNABIS RESEARCH

Susan R.B. Weiss Director Division of Extramural Research National Institute on Drug Abuse NIDA CANNABIS SCIENCE RESEARCH AREAS

• National and Local Surveys EPIDEMIOLOGY • Including co-occurring MI and SUD

• ABCD Study PREVENTION • Dissemination of evidence based programs • Effective messaging in current legal environment

• Endocannabinoid System • Impact of exposure/use/addiction on brain structure and NEUROSCIENCE function; cognition; motivation; affect; fetal and adolescent development

TREATMENT of • Medications, Devices (e.g., TMS), psychosocial (behavioral) • Relapse prevention Cannabis Use • Withdrawal Disorder • Co-morbid conditions (e.g. psychosis) • Surveillance measures that are sensitive, reliable, and report meaningful (i.e., actionable) outcomes POLICY • Impact of different regulatory models, marketing, taxes, etc. • Social, Cultural, Academic, and Health Impacts CANNABIS CONTAINS >100 CANNABINOIDS PLUS OTHER CHEMICALS IN VARYING CONCENTRATIONS ▪ Plant with long history of use worldwide ▪ Illegal under US Federal law (Schedule I substance) ▪ Legal for medical use in 33 States + D.C. ▪ Legal for adult use in 11 States + D.C. delta-9-tetrahydrocannabinol ▪ High CBD variety/extracts legal in 17 states for medical use ▪ CBD from Hemp (defined as cannabis sativa <0.3% THC) no longer in the Controlled delta-9-tetrahydrocannabivarin Substances Act (CSA) delta-8-tetrahydrocannabinol ▪ Versions of active ingredients approved (or in clinical trials) for medical indications in U.S. and cannabinol other countries cannabigerol o Synthetic - Marinol, Syndros, Cesamet o Plant Derived- Sativex (THC/CBD) o Plant Derived-Epidiolex (CBD: FDA approved: Schedule V) cannabichromene cannabidiol Cannabis: Most Commonly Used “Federally” Illicit Drug In the U.S.

• Over 27 million Americans 12 and older report past month cannabis use. • Approximately 4.4 million Americans met criteria for cannabis use disorders in 2018. • An estimated 3.0 million Americans used cannabis for the first time; 1.3 million were between the ages of 12 Tetrahydrocannabinol (THC) and 17. Psychoactive Ingredient in Marijuana

Source: 2018 National Survey on Drug Use and Health, SAMHSA CHANGING LANDSCAPE: INCREASING POTENCY (%THC), NEW ROUTES OF ADMINISTRATION, CBD PRODUCTS 20 15.6 14.8 15 12.3 11.9 10.411.1 9.6 9.9 9.8 8.8 10 8.1 8 12 11.6 7.2 7.2 10.9 6.1 5.3 THC % 4.5 5 4.9 4.6 5 4 CBD % 0.3 0.4 0.4 0.4 0.4 0.5 0.6 0.5 0.5 0.5 0.5 0.4 0.5 0.4 0.4 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.3 0

SOURCE: U Miss, Potency Monitoring Project YEAR Past Month Marijuana Use Increasing in Adults

9 % Increase 25 2015 2016 7.2M 7.6M 7.5 M 6.9M 22.1 2… 20 20.8 19.8

15 36% Increase

Percen t 10 18.5M 1.8M 1.6M1.6M 1.7 M 16.8M 13.6M15.2M 8.6 6.7 7.9 5 7.0 6.5 6.5 6.5 7.2 0 12 to 17 18AGE to 25 26 or Older

Source: SAMHSA, 2018 National Survey on Drug Use and Health (September 2019).

Cannabis And Brain Development: Most Vulnerable Populations Pre/postnatal

Adolescents

Older Adults? Prenatal Cannabis Exposure Is Increasing: Overview of Effects*

Lower IQ; Problems with hyperactivity; executive function; Attention increased frontal early onset Problems cortical thickness substance use

18 8-10 Young Neonates 3-4 Years 6 Years Months Years Adult

Lower birth weight; Lower scores in Externalizing behaviors smaller head verbal & memory (attention, impulsivity); circumference; domains ADHD; depressive hyperarousal symptoms; delinquency; psychosis proneness

* Multiple Caveats FREQUENCY OF CANNABIS USE BEFORE AGE 17 YEARS AND ADVERSE OUTCOMES (30 YEARS AGE) (N=2500-3700)

20 1.4 18 1.2 16 14 1 12 0.8 10 0.6 Adjusted Odds Ratios Adjusted 8 6 0.4 4 0.2 2 0 0 Cannabis Other Illicit Drug Suicide Attempt High School Degee Depression Welfare Dependence Use Completion Attainment Dependence

Source: Silins E et al., The Lancet September 2014 Cannabis-Associated Psychosis Regular Cannabis Use Increases Schizophrenia Risk in those with AKT1 rs2494732 genotype Study of Swedish Conscripts (n=45570) 30 Never used cannabis Used cannabis at week ends or less 20 Used cannabis everyday

10 Ratio Odds Casesper 1,000

0 0 1 2 10 <50 >50 AKT1(T/T) AKT(C/T) AKT1(C/C) # of times cannabis used by age 18 GXE model: p*=0.014 Source: Andréasson et al Lancet, 1987 Source: Di Forti et al., Biological Psychiatry, 2012

Prospective Dunedin study (n=1037) Effect of High Potency Cannabis on Risk of Psychosis 9 Risk of schizophrenia-like 8 Never used cannabis 5.4* 7 psychosis at age 26 years 6 Hash

Odds ratio Odds Skunk at week ends 1 1.9) 0 Skunk daily 2 1 0.91 Cannabis users Cannabis users 0.49 0.62 by age 15 yearsby age 18 years 0 Adjusted OR Source: Arseneault et al BMJ 2002 Source: Di Forti M et al., The Lancet, 2015 Cannabis: Risks for Adverse Neurodevelopmental Outcomes

➢ Some populations more vulnerable than others: those exposed pre- or postnatally, adolescents, older adults (?), individuals with mental disorders ➢Several cohort studies have documented modest neurodevelopmental deficits in children, adolescents, and young adults who were prenatally exposed to cannabis (multiple caveats) ➢In adolescents: effects on learning, IQ, motivation, long term academic and career outcomes. ▪ But…..heavy using adolescents often use multiple substances ▪ And….we don’t know whether effects persist if cannabis use is stopped Biological plausibility: ▪ Cannabinoids cross the placenta and accumulate in fetal tissues, especially brain ▪ Also found in breast milk ▪ Endocannabinoid system (ECS) is important for neural development, glial differentiation, axonal migration, myelination, etc. ▪ Human imaging studies report alterations in CB1 receptor-rich brain areas ▪ Preclinical studies of prenatal/adolescent exposure show lasting effects of THC exposure on adult drug seeking behavior, stress responses, brain reward systems, which may involve epigenetic mechanisms THANK YOU! Kate Laughery Drug Enforcement Agency Understanding the process of obtaining DEA approval for cannabis research { Elyse Contreras Colorado Department of Public Health & Environment State efforts to evaluate scientific research and EVALI Update EVALI & the Cannabis Connection April 21, 2020

Elyse Contreras, MPH Marijuana Health Monitoring & Research Program EVALI E-cigarette or Vaping Associated Lung Injury

• First cases April 2019 • Reported to CDC June 2019 • Cases reported use of vaping devices containing: • THC • Nicotine • Flavoring • CBD • Outbreak declared August • August 30 • Mandatory reporting in CO • First case reported

EVALI & the Cannabis Connection The Epi Curve

EVALI & the Cannabis Connection Total cases = 2807 Deaths = 68

EVALI & the Cannabis Connection What we know Data from hospitalized cases: • 82% reported using THC products (33% exclusive use) • 50% provided info on product source • 78% informal sources • 16% commercial source • 6% both

• 57% reported using nicotine products (14% exclusive use) • 54% provided info on product source • 69% commercial source • 17% informal source • 15% both • 66% male, median age 24 years, 52% ages 24 or younger

EVALI & the Cannabis Connection What we know

• Lipoid pneumonia can be caused by inhalation of oils, but the lung injury seen with EVALI was more severe • Product testing • VEA, MCT, PEG, PG, glycerin, gamma tocopherol • Case-control study: • BAL fluid from 51 EVALI cases compared to 99 non-EVALI samples • VEA present in BAL of 48/51 EVALI cases • No oils found in 99 controls • CDC’s conclusion: VEA “strongly linked” and “…a primary cause of EVALI”

EVALI & the Cannabis Connection Investigation challenges

• Vaping products- novel technology, not well studied or regulated • Various ingredients • What to test for? Who is testing? • Confusion on Federal level? CDC, FDA, DEA, ATF

• Changing case definition • Self-reported info • Small amounts of vape fluid to test (0.5 – 1.0 mL) • BAL collection • Legalities of releasing patient info to Feds

EVALI & the Cannabis Connection Theories

• Regulated cannabis market has “safer” products • Ousts illicit market • Products undergo testing • States can restrict what ingredients are used in production

• Ingredients • Consumed in a manner not intended • Questionable safety of imported products • Chemical conversion of CBD to THC, residual contamination

• Vaping devices & parts • Chemical leaching • Formaldehyde produced from PG • Heavy metal poisoning (e.g. cadmium pneumonitis “metal fume fever”)

EVALI & the Cannabis Connection Colorado EVALI Summary

Only 8 cases of EVALI reported • 88% male, median age 25 • 50% nicotine exclusive • 100% commercial source • 38% THC exclusive • 33% commercial source • 33% informal source • 33% not sure • 13% Did not know

EVALI & the Cannabis Connection Current Vaping Use Among Adults & Adolescents in Colorado

Adult use (BRFSS 2018) Adolescent use (HKCS 2017) • 7.5% adults currently use • 27% high school students nicotine e-cigarette currently use nicotine e- • 5.2% adults currently vaporize cigarettes marijuana • 20.3% high school students currently vaporize marijuana

EVALI & the Cannabis Connection • EVALI cases more prevalent in states without recreational marijuana laws • No difference found between states with medical laws and prohibition enacted • Findings not influenced by state differences in use of e-cigs nor rate of e-cigarette in each state

EVALI & the Cannabis Connection Key Takeaways & Next Steps

• Absolute cause of EVALI is unknown, likely multiple factors • More research is needed to determine if vaping is safe • Vaping should be discouraged, especially products sold online

• Continue EVALI surveillance to determine if endemic • Novel products need oversight and research • Policy and regulation need to work in favor of public health & safety • Enforcement should be coordinated effort between states & Fed

EVALI & the Cannabis Connection Garth Van Meter Smart Approaches to Marijuana (SAM) Risks associated with high potency products The Effect of Potency on Use Patterns

Garth Van Meter VP of Government Affairs, SAM

22.7 million Use 21-31 days a month 21.9 million Use 11-20 days a month 20 Use 4-10 days a month 6.1 million 8.8 million Use 1-3 days in month

15 4.5 million

6.2 million 10 7.9 million 3.6 million

3.7 million 3.5 million 5

Millions of Americans Reporting Marijuana Use Marijuana Reporting Americans of Millions 7.8 million 2.1 million 3.9 million 1.3 million 0 0.9 million 1979 1992 2014

Source: National Survey on Drug Use and Health, courtesy of Jonathan Caulkins, PhD

(900,000 versus 9 Million)

However, as one scientist remarked recently, while laboratory animals are an expensive way of understanding the risks of cannabis use, “North Americans come free.”

© https://www.economist.com/science-and-technology/2019/03/21/high-potency-cannabis-or-frequent-use-raises-the-risk-of-psychosis 84 © 85 © 86 © 87 Exposure to Cannabis Marketing in Social and Traditional Media and Past- Year Use Among Adolescents in States With Legal Retail Cannabis

A study published in the Journal of 140% Whitehill et. al., 2020 Adolescent Health in 2020 found that 129% social media in states that had legalized 120% marijuana had a notable impact on young people. 100% • 15 to 19 year-old residents in “legal” states 96 reported a higher exposure to marijuana % 88 content online. 80% % • Exposure on social media platforms was associated with increased odds of past- 60% year marijuana use. 40% • Odds of past-year marijuana use increased by 48% “with each additional social media platform where adolescents reported 20% exposure.”

0% Odds of Past-Year Marijuana Use Facebook Twitter Instagram

Past Month Marijuana Vaping

14.0%

12.6%

7.5% 7.0%

4.9% 4.3% 3.9%

2.6% 1.6%

8th Graders 10th Graders 12th Graders (Monitoring the Future, 2019) 2017 2018 2019

Youth Marijuana Use: 2017-2018 18% 16.4% 16%

14% 12.1% 12%

10% 9.4%

8% 6.4% 6%

0% Past Year Use Past Month Use Non-Legal States "Legal" States (NSDUH, 2019)

Association Between Recreational Marijuana Cannabis Use Disorder: Aged 12 to 17 Legalization in the United States and Changes in Marijuana Use and Cannabis Use Disorder From 2008 to 2016:

• States that legalized recreational marijuana CUD increased experienced a near 25% increase in Cannabis ~25% Use Disorder (CUD) among 12 to 17 year-olds.

• Youth in states with RML (Recreational Marijuana Legalization) experienced CUD at a higher rate of 2.72% following legalization, increasing from 2.18% prior to RML enactment.

• These findings indicate a cause for concern as more states look to legalize the drug.

(Cerda et al., 2019) Before Legalization After Legalization

100% ownership of two companies, based in Canada, that are currently licensed to cultivate and sell medical marijuana,

“Smart Approaches to Marijuana (SAM)’s legalization opponent Kevin Sabet may be right: like it or not Big Tobacco is invading cannabis.

th Altria, the company that invited unwitting consumers for decades to come to where the cancer is –Marlboro Country– Dec 4 , 2018 may be looking to shore up stagnant cigarette sales by purchasing Canadian cannabis company Cronos Group.”

© 93 Mark Bolton Greenwich Biosciences Understanding Epidiolex and the FDA drug approval process How Cannabis-Derived Medications Go Through the FDA Approval Process Mark Bolton, Sr. Director US Public Policy GW’S VISION is to be the global leader in prescription cannabinoid medicines, developing and commercializing pharmaceutical products which address clear unmet needs

96 FDA approves first medicine derived from cannabis plant Nabiximols: GW’s next U.S. opportunity

• Nabiximols US Adopted Name (USAN) • A botanical product which is a mixture of THC and CBD extracts and also contains minor constituents including related cannabinoid and non-cannabinoid plant components, such as terpenes, sterols and triglycerides.

• Approved in >25 countries outside the US (Europe, Australia, Canada) as Sativex® for the treatment of spasticity due to multiple sclerosis (MS). GW’s Cannabinoid Platform FDA approval answers critical questions important for all, but especially for vulnerable patients + - DOES THE DRUG WORK? IS THE DRUG SAFE? • What does it work for? • What are the side effects? • What doesn’t it work for? • How closely should I be Vulnerable • How well does it work? monitored? • Does something else work • Can I take it if I’m populations better? pregnant or trying? and patients with • How long does it take to • Can the elderly take it? serious work? • Is it free of contaminants? • Will it stop working? • Will it conflict with my illnesses • How much should I take? other drugs? • How long should I take it • How is it manufactured? for? • Is it consistently • Should I take it with or manufactured? without food? • Is each dose the same?

100 Quality, Safety and Efficacy 45 acre / 18 hectare glasshouse Material to supply 36,000 children for one year

• Grown in computer-controlled glasshouses • No pesticides used; biocontrols • Temperature, humidity, and lighting controlled • Propagation by clones; no genetically modified • Natural, proprietary growth medium devoid of plants heavy metals

DRUG SUBSTANCE CO2 Extraction CBD Botanical Raw Material

Milling

Decarboxylation

CO2 Extraction

CBD Botanical Drug Extract (Crude Form)

Multi-step Crystallisation

Filtration & Pure CBD Drying

DRUG PRODUCT Filling line

CBD Pure

Bulk Solution Production (GW) Sesame Oil/Ethanol

Filling and capping (GW)

Product labelling and packaging

Labeling and Labelling, Check weigh, Tamper packaging Evidence, Serialization (GW) line

Epidiolex

Phase 1 Phase 2 Phase 3 Phase 4 POST APPROVAL

20 to 100 Up to 300 to 3,000 Several thousand Study healthy volunteers several hundred volunteers who New Drug volunteers participants or people with the people with the have the disease Application who have the disease/condition disease/condition or condition filed based disease/condition upon clinical trial data; ~70% of ~33% of FDA drugs drugs decides move to move to Assess efficacy Assess safety Assess efficacy approval May be mandated Purpose the next the next and monitor adverse and dosage and side effects for new by FDA phase phase reactions drug

Length of Several months study Up to 2 years Up to 4 years ~12 years in total

The drug development process:. https://www.fda.gov/ForPatients/Approvals/Drugs/ucm405622.htm. Accessed August 30, 2017.

✓ Multiple animal ✓ At least one ✓ Collection of all ✓ Studies… studies… ✓ Monitoring of toxicology hundred adverse events and more studies all adverse studies patient-years (side effects) • Drug/drug interaction events of data • Mild/moderate/sever indicative • Food/drug interaction required e of abuse or • Related and • Abuse potential dependence unrelated • Renal or hepatic impairment • QT (cardiac)

• The National Academies of Sciences, Engineering and Medicine found cannabis use is associated with changes in brain structure; development of psychoses (e.g. schizophrenia); and lower birth weight for children born to mothers using cannabis during gestation.

• In 2019, the US Surgeon General issued a rare health advisory warning the public of the risks of cannabis use among pregnant women and adolescents.

• Recent research indicates cannabis use can drive cancer growth in certain types of head and neck cancer;1 increase the risk of heart attacks2 and strokes;3 and impair heart functioning.4

1 https://health.ucsd.edu/news/releases/Pages/2020-01-13-how-cannabis-accelerates-growth-of-hpv-related-head-and-neck-cancer-identified.aspx. 2 Patel R, et al, Cannabis Use is an Independent Predictor of Acute Myocardial Infarction Hospitalization in Younger Population, Journal of Adolescent Health. 2020. Vol. 1, issue 1. 3 Parekh T, Pemmasani S, Desai R, Cannabis Use Among Young Adults (18–44 Years of Age) and Risk of Stroke, Stroke. 2019. Vol 51, No. 1. 4 Khanji M, et al, Association Between Recreational Cannabis Use and Cardiac Structure and Function, JACC Cardiovascular Imaging. 2019.Vol. __, No. _.

108 Balance of benefit and risk

Therapeutic RISK? Benefit?

109 There are important differences between FDA- approved cannabis-derived medicines and unapproved cannabis products

FDA-approved cannabis-derived Unapproved cannabis medicines products

Medical and Subject to extensive preclinical and clinical No requirement for high- scientific rigor study, including randomized, placebo- quality, controlled trials. controlled trials with large patient Quality standards populations.Meet FDA standards Safe and for effective identity, purity, dosing No applicable federal quality demonstrated.stability, consistency. Subject to extensive assurance standards. Varying testing to ensure consistency in the active and inconsistent state standards. pharmaceutical ingredient and other components included on the label.

Manufacturing Must meet FDA-approved, highly-refined Testing standards vary from standards specification to ensure batch-to-batch and state to state, and some states dose-to-dose consistency. Manufactured have no testing requirements. using current good manufacturing practices No FDA oversight or inspection. for pharmaceutical products, the highest

110

Beau Kilmer, PhD RAND Corporation Summarizing our discussion How Will Cannabis Legalization Affect Health, Safety, & Social Equity Outcomes? It Depends on the 14 P’s

Beau Kilmer, PhD

Director, RAND Drug Policy Research Center Senior Policy Researcher, RAND Corporation

1 dprc.rand.org 2 Also based on interactions with decision makers

• Washington State Liquor Cannabis Board

• State of Vermont

• New York’s Regulated Marijuana Workgroup

• Uruguay’s Junta Nacional de Drogas

• Canada’s Legalization Task Force 3 Design considerations for legalizing cannabis: The 14 P’s 1. Production 8. Prior Criminal Records 2. Profit Motive 9. Product Types 3. Power 10. Potency 4. Promotion 11. Purity 5. Prevention & Treatment 12. Price 6. Policing & Enforcement 13. Preferences for Licenses 7. Penalties 14. Permanency

Source: Kilmer, 2019 Design considerations for legalizing cannabis: The 14 P’s 1. Production 8. Prior Criminal Records 2. Profit Motive 9. Product Types 3. Power 10. Potency 4. Promotion 11. Purity 5. Prevention & Treatment 12. Price 6. Policing & Enforcement 13. Preferences for Licenses 7. Penalties 14. Permanency

Source: Kilmer, 2019 Production costs will plummet with legalization

• Reduce the risk of arrests and violence – Reuter & Kleiman, 1986

• Increasing returns to scale if large grows allowed – Caulkins, 2010; Kilmer et al., 2010

• Easier to leverage changes in technology

• If allowed, competition will drive down costs

6 Design considerations for legalizing cannabis: The 14 P’s 1. Production 8. Prior Criminal Records 2. Profit Motive 9. Product Types 3. Power 10. Potency 4. Promotion 11. Purity 5. Prevention & Treatment 12. Price 6. Policing & Enforcement 13. Preferences for Licenses 7. Penalties 14. Permanency

Source: Kilmer, 2019 Commonly-discussed options in the U.S.

Source: Caulkins, Kilmer, Kleiman et al., 2015. Considering Marijuana Legalization. RAND 8 Middle-ground options (small scale)

Source: Caulkins, Kilmer, Kleiman et al., 2015. Considering Marijuana Legalization. RAND 9 Middle-ground options (large scale)

Source: Caulkins, Kilmer, Kleiman et al., 2015. Considering Marijuana Legalization. RAND 10 11 In Canada, variation in public/private retail sales

Source: CCSA, 2020 Design considerations for legalizing cannabis: The 14 P’s

1. Production 8. Prior Criminal Records 2. Profit Motive 9. Product Types 3. Power 10. Potency 4. Promotion 11. Purity 5. Prevention & Treatment 12. Price 6. Policing & Enforcement 13. Preferences for Licenses 7. Penalties 14. Permanency

Source: Kilmer, 2019 Price of cannabis matters for many outcomes

• Size of illicit market

• Consumption

• Tax revenues

• Profitability of licensed businesses

– Employment – Wealth generation/Social equity

14 In Oregon, retail prices fell by 50% in 2 years

Source: Oregon Liquor Control Commission, 2019 Federal legalization = Dramatic market changes

• Federal prohibition creates headaches for cannabis companies, but it keeps many in business

• Can produce all of the THC consumed in US on a few dozen farms in Iowa . . . – Caulkins, Kilmer, & Kleiman (2016) • . . . or in another country

• And if Amazon is eventually allowed to distribute . . .

16 Some options to elevate price Levy taxes, but beware

Require rigorous testing

Set minimum price Set the price

Government stores

17 Expect to hear more about potency taxes

• Could set tax as function of THC content – Pacula & Hall, 2003; MacCoun, 2010; Caulkins et al., 2015 – A progressive THC tax could nudge users toward lower potency

• Somewhat similar to how we tax other drugs – Federal tax on liquor is based on alcohol content – Some jurisdictions now taxing liquid nicotine (e.g., NJ)

• Canada recently implemented THC tax for concentrates

18 Concluding thoughts

• Many choices, must acknowledge the tradeoffs

• Be skeptical of those who claim they know what the overall effect will be on public health

• Short- & long-run effects could be different

• Reasonable folks can disagree about cannabis policy 19 Q&A Cannabis Law & Policy Virtual Summit April 21, 2019 COVID & Legislative Update

Panelists Sundie Seefried – Partner Colorado CU Melissa Kuipers Blake – Brownstein Hyatt Farber Schreck Sundie Seefried Partner Colorado Credit Union Economic impacts of COVID-19 and SAFE Banking Update Safe Harbor Cannabis Deposits

Annual Cannabis Related Deposits (millions)

$2,760 $2,531

$1,280

$933

$460

$153

2015 2016 2017 2018 2019 P-2020 Taxes vs. Seasonal Trend

COLORADO RETAIL TAXES COLLECTED

2018 2019 2020 $19,000,000

$18,000,000

$17,000,000

$16,000,000

$15,000,000

$14,000,000

$13,000,000

$12,000,000 JAN FEB MAR APR MAY

Total Colorado Revenue 2019: $302,458,426 Projected Impact – Month One

PARTNER COLORADO CANABIS DEPOSITS $300,000,000 2018 2019 2020 $250,000,000 -23% $200,000,000 +12% $150,000,000

$100,000,000 +4% $50,000,000 $- Jan Feb Mar Apr

Cannabis Couriers 140,000,000

120,000,000 -33%

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

- Jan Feb Mar Apr Federal Support Industry required to implement federal guidance and Laws but have NO access to assistance. (Access or Tax Credits)

HARDSHIPS: Financial Institutions are excluded ➢ Curbside/Cashless Transactions ➢ Employees with Children and required Paid PTO ➢ Infection Risk & Paid PTO OPTIONS: Use of State Discretionary Funds: ➢ Loan Guarantees ➢ SBA ‘LIKE’ Loans – Default only. ➢ Organize National network of Financial Institutions Other Initiatives: ➢ State Tax Payments ➢ Expedited Account On-boarding Safe Banking Act In the absence of legislation:

Interstate Banking: Funds Crossing State Borders ➢ Into states where funds are not considered legal ➢ Certification of Financial Institutions Exclusions: Financial Institutions are excluded ➢ Director & Officer Bond Coverage ➢ Access to Federal Reserve ➢ Protection from Prosecution Ancillary Businesses: NO Mandate of Oversight ➢ Not included in FinCEN Guidance ➢ Not monitored ➢ Money Laundering Opportunity/Risk Melissa Kuipers Blake Brownstein Hyatt Farber Schreck State Executive Orders and Federal COVID Legislation Legal Cannabis Amid COVID-19

Melissa Kuipers Blake, Shareholder Co-Chair, Cannabis & Industrial Hemp Practice Group How many states don’t have any legal THC or CBD?

Illustration Credit: Wikipedia (May 27, 2019)

• Cannabis has been deemed an “essential service” in most states. Even where cannabis has not been deemed “essential” explicitly (AZ, DE, LA, MI, MN), cannabis companies have been permitted to operate.

• The big exception to this general statement is Massachusetts where adult-use sales are prohibited (medical is ok). Gov. Baker’s order was challenged in the courts and the state trial court upheld the closure order.

• Curbside pick-up is required, generally, or there are very strict limits on the number of people allowed in the retail store.

144 Cannabis Deemed Essential in Nearly All Legal States

• Delivery is permitted in jurisdictions where it was already allowed before the pandemic. DC recently adopted an emergency rule allowing delivery.

• Cannabis companies are at a uniquely heightened exposure to COVID-19 because they cannot accept credit or debit cards. There are concerns over the transmission of the virus through cash.

• Two cities that attempted to restrict access to the product – Denver and San Francisco – quickly reversed course after public and industry outcry.

145 Cannabis treatment in CARES Act

No SBA Loans for No SBA Loans for Direct Cannabis Indirect Cannabis Companies Companies

Federal Tax Filing No relief from Deadline Extended 280e to July 15

146 Next Steps for Cannabis Companies

Lobby Congress for Relief • Intense efforts are underway in the House to include direct and indirect cannabis companies under the eligibility rules for the SBA Paycheck Protection Program in the next or future COVID- 19 aid packages. • Discussions are ongoing with Senate Banking Chairman, Mike Crapo (R-ID), about the SAFE Banking Act. • The conversations around STATES Act and its presumptive ability to remove 280e punitive application to cannabis companies are occurring with various members of the House and Senate.

147 Questions? Thank you

Melissa Kuipers Blake [email protected] 303-223-1164 Cannabis Law & Policy Virtual Summit April 21, 2019 Public Safety

Moderator Harinder Kapur – California DOJ Panelists Jonathan Caulkins – Carnegie Mellon University Heinz College Chelsea Clarke – Rocky Mtn. HIDTA Andrew Kline – National Cannabis Industry Association Rob Ritter – NHTSA, Office of Impaired Driving Jake Nelson – AAA Jonathan Caulkins, PhD Carnegie Mellon University Heinz College Unpacking the supply and demand of the regulated and illicit markets Observations About Cannabis Demand and Supply Trends

Jon Caulkins Carnegie Mellon University Heinz College

152 Adopting Commercial Model Is an Irreversible Leap with Big Implications Outline

• Trends in supply

– Know the licensees that are regulated • Trends in demand

– Know the customers who need to be protected • Implications & challenges of those trends

154 The Effects of Legalizing Large-Scale Commercial Production

1. Effects on potency

2. Effects on production costs & prices

3. Effects on product variety & form

4. Effects on alcohol, tobacco, & opioids

5. Effects on firm size

6. Effects on lobbying and regulatory capture

155 Production Costs Are Falling

$4,000 <--- Prohibition $3,500

$3,000

$2,500 <-- Quasi-legalization -->

$2,000

$1,500 <- Legal,

Current USD per Pound perUSD Current $1,000 <-- Projected cost regulated -> with light regs $500 and no taxes -->

$0 2. Decline in Retail Price in WA State

Retail price has fallen below $1 per hour of intoxication for a naïve user.

OR price fell from $9.27/gm in Jan ‘16 to $4.27/gm in Nov ‘18

157 Potency Has Risen Sharply Over Time

25% Washington State Sinsemilla 20% All Types Marijuana

15%

10%

5% What do we think of as “typical” consumption 0% pattern in 2019 vs. 1999? 1985 1990 1995 2000 2005 2010 2015 2020 158 5. Legalization’s Effect on Firm Size • Before the 2009 Ogden memo – a grow with 99 plants was large • Average of 10 firms analyzed in 2013 for LCB – 3,000 square feet in grow area – $500,000 in gross revenues – 250 pounds per year in saleable production • 2019 3rd Quarter, single firm (Aphria) – 1,000 employees – $74M in quarterly net revenue – Annualized production capacity of 115,000 kilograms – German subsidiary licensed to produce 1,000 kilograms159 Outline

• Trends in supply • Trends in demand – Punchline: The market is all about heavy use and we do not know whether to worry about that. • Implications & challenges of those trends

160 Punchline: Policy Affects Use, but Biggest Change Is in Intensity not Prevalence

• Contrast prevalence 1979 vs. 1992 vs. 2018 • Trends from 1992 – 2018 • Market share today by type/frequency of use

161 Number of Cannabis Users Fell Sharply During Reagan-Bush Era

30 Use 21-31 days a month Use 11-20 days a month Use 4-10 days a month 25 Use 1-3 days in month

Millions of Americans Reporting Marijuana Use Marijuana Reporting Americans of Millions 0

1979 1992 2018 162 Since 1992 The Number Reporting Marijuana Use in the Past-Year Has More than Doubled

Growth in the Number of People Reporting Past-Year Marijuana Use 1000 in the U.S. Household Survey (Indexed so Level = 100 in 1992)

900

800

700

600

500

400

300

200

100

0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 The Number of “Current” (Past-Month) Users Has More than Tripled

Growth in Marijuana Use Reported in U.S. Household Survey 1000 (Indexed so Level = 100 in 1992)

900

800

700 # of Past-Month Users

600 # of Past-Year Users 500

400

300

200

100

0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Days of Use Reported Has Increased Sixfold (to 5 Billion)

Growth in Marijuana Use Reported in U.S. Household Survey 1200 (Indexed so Level = 100 in 1992) 1100

1000 # of PM Days of Use

900 # of Past-Month Users # of Past-Year Users 800

700

600

500

400

300

200

100

0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 The Number Using Daily or Near-Daily Has Grown Elevenfold from 0.9 to 10.1 Million

Growth in Marijuana Use Reported in U.S. Household Survey 1200 (Indexed so Level = 100 in 1992) 1100 # of Daily & Near-Daily Users 1000 # of PM Days of Use 900 # of Past-Month Users 800 # of Past-Year Users

700

600

500

400

300

200

100

0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 DND Cannabis Use is Relatively New

40% Proportion of Past-Month Users Who Consume Daily or Near Daily 35%

30% Marijuana

25% Alcohol

20%

15%

10%

0% 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 167 Intensive Use Approaching that of Alcohol

16,000,000 Number Who Use Daily & Near Daily (DND)

14,000,000 ALCOHOL MARIJUANA 12,000,000 By 2018 that ratio had fallen to 1.4 to 1. 10,000,000

8,000,000 In 1992, 10X as many 6,000,000 people used alcohol DND as used MJ DND. 4,000,000 Between 1992 and 2018 the # of DND MJ users 2,000,000 grew elevenfold from 0.9 million to 10.1 million 0 1975 1980 1985 1990 1995 2000 2005 2010 2015

168 Heavy Users Dominate Consumption

Adult 10-20X, Adult < 10X PM, no No ABOD/TX, ABOD/TX, 2.4% 8% In 2016, adults with no substance abuse or dependence (ABOD) issues and using Past or present fewer than 10X in past drug or alcohol month (PM) Adult DND, No ABOD/TX, 44% accounted for only ABOD/TX, 38% 2.4% of consumption.

No ABOD/TX, but under age 21, 7% 169 Second Big Change is Escalation in Average Daily THC Consumption

170 Contrast THC Consumption of Two Types of Users

• 1 joint each weekend night, pre-2000 –Assuming 0.4 gms/joint, 4% THC –(2/7) * 0.4 * 4% = 4.6 milligrams/day • Average daily user in today –Assuming 1.5 gms/day, 20% THC –1.5 * 20% = 300 milligrams/day • That’s ~65 times as much THC 171 THC & Lane Tracking

From Ménétrey et al. (2005), J of Analytical Toxicology, study of 8 male occasional users.

45.7 mg

Note: Max dose was 46 mg

172 Outline

• Trends in demand • Trends in supply • Implications & challenges of those trends – Effect on illegal market

173 Effect of Legalization on Black Market

• Licensed sales quickly replaced 2/3rd of WA market – From July 1st 2016 – June 30th 2017 – Licensed sales: $1.17B and 120-150 MT flower equivalent – Total consumption: ~$1.66B and 200 MT

• Points to remember – Farmers can outcompete criminals at growing things, but – Unregulated ___ can outcompete regulated ___ for any ___ • That is not primarily because of excise taxes – Law enforcement’s job does not end with legalization

• “Even a paper tiger needs a push to knock it over” 174 Chelsea Clarke Rocky Mtn. High Intensity Drug Trafficking Area Data on the impact of legalization on drugged driving and the illicit market in Colorado THE LEGALIZATION OF MARIJUANA IN COLORADO: THE IMPACT

Chelsey Clarke Rocky Mountain High Intensity Drug Trafficking Area (RMHIDTA)

ARGUMENTS FOR LEGALIZATION • Reduce traffic fatalities

• No increase in use, even among youth

• Added revenue generated through taxation

• Eliminate arrests for possession and sale

• Free up law enforcement resources

• Reduce profits for the drug cartels trafficking marijuana TRAFFIC FATALITIES & IMPAIRED DRIVING Number of Statewide Traffic Deaths

700 632 608 648 600 535 554 548 547 472 481 488 500 465 450 447

400 Reduce traffic fatalities

300 Number Deaths of Number Commercialization Legalization 200

100

Traffic Deaths Related to Marijuana when an Operator Tested Positive for Marijuana Legalization 200 Commercialization 162 149 144 150 115 94 100 78 63 71 43 47 49

50 37 39 NUMBER OF DEATHS OF NUMBER

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 SOURCE: National Highway Traffic Safety Administration, Fatality Analysis Reporting System (FARS), 2006- 2011 and Colorado Department of Transportation 2012-2017 TRAFFIC FATALITIES Percent of All Traffic Deaths That Were Marijuana-Related when an Operator Tested Positive for Marijuana Legalizatio 30% n 25.00% 24.51% 23.00% Commercializatio 21.02% n 19.26% 16.53% 20% 14.09% 14.76% 10.10%10.89% 7.85% 10% 6.92%7.04%

PERCENT PERCENT OFDEATHS 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

SOURCE: National Highway Traffic Safety Administration, Fatality Analysis Reporting System (FARS), 2006- 2011 and Colorado Department of Transportation 2012-2018 DUIDS

Colorado State Patrol Number of Drivers Under the Influence of Drugs (DUID) Marijuana Only Involving Marijuana All DUIDs

2000 1,596 1500 1,025 981 1000 874 842 1,066 780 500 674 641 722 354 333 388 336 421

NUMBER OF DUIDS OF NUMBER 0 2014 2015 2016 2017 2018

SOURCE: Colorado State Patrol DUIDS

Colorado State Patrol All DUIs and DUIDs, 2018

Involving Marijuana Alcohol Only 67% 69% Other 31% Other Drugs 33%

SOURCE: Colorado State Patrol, CSP Citations for Drug Impairment by Drug Type Black Market Rocky Mountain HIDTA Colorado Task Forces

2016 2017 2018

Number of Completed Investigations 163 144 257

Number of Felony Arrests 241 239 192

7,116 14,692 12,150 Pounds of Bulk Marijuana Seized (3.5 tons) (7.3 tons) (6.1 tons)

Number of Plants Seized 43,786 43,949 60,091

Number of Edibles Seized 2,111 6,462 2,894

Pounds of Concentrate Seized 232 102 319

Different States to Which Marijuana was 29 24 25 Destined

SOURCE: Rocky Mountain HIDTA Performance Management Process (PMP) Data RMHIDTA Colorado Task Forces: Marijuana Investigative Seizures 16,000 14,691.86 14,000 12,150.16 12,000 10,000 7,115.61 8,000 6,000 4,000 1,028.62 2,000 425.00 0

2014 2015 2016 2017 2018 NUMBER OF POUNDS SEIZEDPOUNDS OF NUMBER

SOURCE: Rocky Mountain HIDTA Performance Management Process (PMP) Data RMHIDTA Colorado Task Forces: Marijuana Investigative Plant Seizures

70,000 60,091 60,000 47,102 50,000 43,941 40,000 30,000 20,000 14,979 10,000 5,215

0 NUMBER OF PLANTS SEIZED PLANTS OF NUMBER 2014 2015 2016 2017 2018

SOURCE: Rocky Mountain HIDTA Performance Management Process (PMP) Data RMHIDTA Colorado Task Forces: Marijuana Investigative Felony Arrests 300 241 239 250 192 200

150 136 94 100

50 NUMBER OF ARRESTS OF NUMBER

0 2014 2015 2016 2017 2018

SOURCE: Rocky Mountain HIDTA Performance Management Process (PMP) Data Number of Marijuana Case Filings Associated with Colorado Organized Crime Control Act

150 119 100 81

50 31 40 18 15 15 3 8 1 0 NUMBER OFFILINGS NUMBER 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

SOURCE: Colorado Department of Public Safety, Division of Criminal Justice, Office of Research and Statistics Parcels Containing Marijuana from CO Destined for Another State 1,200 1,009 1,000 854 800 Legalization 581 600 400Commercialization 320 158 207 200 0 15 36 NUMBER OF PARCELS OF NUMBER 0 2009 2010 2011 2012 2013 2014 2015 2016 2017

SOURCE: United States Postal Inspection Service www.rmhidta.org Click on the “Reports” tab

Chelsey Clarke [email protected] 303-671-2180 Andrew Kline National Cannabis Industry Association Efforts by licensed businesses to end the illicit market and reduce drugged driving Rob Ritter National Highway Traffic Safety Administration, Office of Impaired Driving Understanding Drugged Impaired Driving Drug Impaired Driving

Robert Ritter Director, Office of Impaired Driving and Occupant Protection Drug-Impaired Driving Initiative

3 2

On January 25, 2018 the U.S. Department of Transportation’s (DOT) National Highway Traffic Safety Administration (NHTSA) launched a new initiative to combat drug-impaired driving. Drug-impaired driving is against the law in all 50 States. With a national opioid epidemic and States legalizing marijuana to varying degrees, NHTSA is making drug- impaired driving a top priority. Alcohol v. Cannabis

THC concentration, performance, and subjective high 7 4 5 Weekend Nighttime Prevalence of Alcohol and THC (NHTSA National Roadside Surveys)

Washington State Study (Percent of drivers THC positive) THC positive does not mean THC impaired 2

The Legalization of Marijuana in Colorado: The Impact Volume 6, Sept. 2019 Rocky Mountain HIDTA Impaired Driving Detection

• Officer observes inappropriate driving behavior • Makes traffic stop, engages driver in vehicle • Officer may form suspicion of impairment based on behavior, appearance, and driver statements • Driver exits vehicle, pre-screening tests performed (SFST) • Based on this information, driver may be placed under arrest for suspicion of impairment • Breath or blood sample requested • If BAC is not consistent with apparent impairment, officer may then investigate for impairment due to drugs other than alcohol • Consider assessment by Drug Recognition Expert (DRE) Law Enforcement

3 7

• SFST, ARIDE training • Drug Recognition Expert • Expedited warrants • Law enforcement phlebotomy • Thorough report writing and articulation of observed cues • Courtroom experience and training • Laws Enforcement Liaison Program Prosecution

3 8 • Traffic Safety Resource Prosecutors • National Traffic Law Center • Traffic Tuesday Webinars • Expert Witness Database • Monographs • Dedicated DWI prosecutors • Training (e.g., law enforcement and toxicologists) • Pre-trial monitoring Toxicology

3 9 • Trained toxicologists • Sharing of information within state among toxicology, coroner’s office and medical examiner • Expert witness training – understanding pharmo versus impairment • Test all DWI’s for all Tier 1 and Tier 2 drugs Judiciary

3 10 • Judicial Outreach Liaisons • National Judicial College • DWI and Drug Courts • Other Evidence-based and promising court, sentencing and supervision practices • Treatment referrals and community supervision (probation and parole) Probation and Treatment

11 • Screening • IDA – Impaired Driving Assessment • CARS – Screening and Assessment Tool • Probation Fellow • Treatment • Recovery • Monitoring • Training www.NHTSA.gov/DUIDTool

12 • Allows States and others to review DUID programs • Categories include:

• Law enforcement • Prosecution • Judiciary • Toxicology • Emergency Medical Services • Program communications • Community supervision • Data • Legislation • Treatment Thank you Jake Nelson AAA National Study on Washington State drugged driving 5 years after I-502 passage The Robert F. Borkenstein Course on the Effects of Drugs on Human Performance and Behavior

Cannabis Impaired Driving

Jake Nelson MPH, MPP AAA National Office Washington, DC

Cannabis & Driving: CJS Challenges

1. Vocabulary Misuse 4. Arrests/Convictions

2. Internal Validity of 5. Drug Testing for Early Studies Drivers in Fatal Crashes

3. Federal vs. Street 6. Dearth of Research Marijuana (THC) Road Map

Cannabis Liberalization & Per Se Standards Research & Data Roadside Screening vs. Lab Testing Road Safety Policy & Cannabis  Additional AAA Resources Cannabis: Legalization vs. Decriminalization

U.S. Public Opinion on Legalizing Marijuana, 1969-2017

Source: Pew Research Center A quantitative threshold for per se laws for THC following cannabis use cannot be scientifically supported. Blood v. Brain Active-THC Levels

Research & Data

AAA Traffic Safety Culture Index: 77% Driving w/in 1 hour of using cannabis is very/extremely dangerous.

32% High drivers will get caught by police.

January 2020 AAA Report: THC-positive drivers has doubled since recreational use was legalized in WA

Source: AAA Foundation for Traffic Safety O.F. Roadside Screening vs. Lab Testing Road Safety Policy & Cannabis

• Cannabis: Open Container Laws

• O.F. Testing: Implied Consent

• Electronic Warrant Systems

• Drug Evaluation & Classification Program

• Consumer Education & Cannabis Dispensaries  Addition AAA Resources

• 50-State Survey of DRE Coordinators

• Courtroom Training for DREs and Prosecutors

• Improve State DUID Data Quality & Availability

• Alcohol vs. Cannabis L.E. Countermeasures

• Guidance on O. F. Screening vs. Testing  The Robert F. Borkenstein Course on the Effects of Drugs on Human Performance and Behavior

Jake Nelson AAA National Office [email protected] 202-400-1879 Q&A Cannabis Law & Policy Virtual Summit April 21, 2019 Hemp & CBD

Moderator Billy Seiber - CO AGO

Panelists Sonia Jimenez – US Department of Agriculture, Agriculture Marketing Service Sean Mitchell – Drug Enforcement Agency Cassie Taylor - US Food and Drug Administration Bryan Zumwalt - Consumer Brands Association Megan Olsen - Council for Responsible Nutrition Michael Bronstein - American Trade Association for Cannabis and Hemp Sonia Jimenez US Department of Agriculture, Agriculture Marketing Services Understanding the 2018 Farm Bill and USDA Interim Final Rule Sean Mitchell Drug Enforcement Agency DEA’s role in Hemp and CBD regulation { Cassie Taylor, PhD US Food and Drug Administration FDAs regulatory scope and the need for more science on the impacts of CBD use FDA Role in Regulation of Cannabis Products

Cassandra Taylor, Ph.D. Chemist, Botanical Review Team Office of Pharmaceutical Quality CDER, FDA

April 21, 2020 Attorney General Alliance Cannabis Law & Policy Virtual Summit Disclaimer

This talk reflects the views of the author and should not be construed to represent FDA’s view or policies. The mention of commercial products, their sources, or their use in connection with material reported herein is not to be construed as either an actual or implied endorsement of such products by the Department of Health and Human Services.

231 The United States Food and Drug Administration (FDA)

• Protecting the public health by, for example: – ensuring that the foods it regulates are safe, wholesome, sanitary and properly labeled – ensuring that human and veterinary drugs, and vaccines and other biological products and medical devices intended for human use, are safe and effective

• Ensuring cosmetics and dietary supplements are safe and properly labeled

• Advances the public health by helping to speed product innovations

• Regulates tobacco products https://www.fda.gov/AboutFDA/Transparency/Basics/ucm194877.htm

232 FDA Responsibilities

Regulated Products include:

Human Foods (e.g., Drugs (including Biologics (e.g., conventional foods, prescription and non- vaccines, blood and dietary supplements, prescription) blood products) food additives)

Cosmetics (e.g., skin Electronic Products Medical Devices (e.g., moisturizers, lipsticks, that give off radiation tongue depressors, eye and facial make- (e.g., microwave oven, pacemakers) up, nail polish, X-ray equipment) cleansing shampoos)

Veterinary Products Tobacco Products (e.g., animal foods, (e.g., cigarettes, animal drugs) smokeless tobacco)

233 FDA Authority

Federal Food, • Federal law enacted by Congress Drug & Cosmetic • Along with other federal laws it establishes legal Act (FD&C Act) framework within which FDA operates

• Develops regulations based on law set forth in FDA FD&C Act or other laws under which FDA operates regulations • FDA regulations can be found in Title 21 of the Code of Federal Regulations (21 CFR)

• Follows procedures required by its “Good Guidance Practice” regulation to issue FDA Guidance FDA guidance • Describe FDA’s current thinking on a regulatory issue

FDA Basics: https://www.fda.gov/aboutfda/transparency/basics/ucm194909.htm

234 The Farm Bill’s Impact on FDA Authorities

• FDA’s authorities under the FD&C Act and section 351 of the Public Health Service (PHS) Act were specifically preserved by the Farm Bill – Cannabis and cannabis-derived products, including products containing CBD, are subject to the same authorities and requirements as FDA-regulated products containing any other substance

• FDA authorities include: – Scientific and regulatory support for research on potential therapeutic uses of CBD products and approval of CBD drug products that are safe and effective – Regulation of CBD products (e.g., as foods including dietary supplements, drugs, cosmetics) – Enforcement actions as necessary against violative CBD products, particularly those that present serious human or animal health risks

Agriculture Improvement Act of 2018 (“Farm Bill,” Pub L. No: 115-1072) 235 The Farm Bill’s Impact on FDA Authorities • Many products containing CBD are illegal under the Food, Drug, and Cosmetic Act (e.g. illegal to make therapeutic claims unless an approved drug, illegal to put in food or dietary supplements)

• FDA’s jurisdiction over other products is heavily dependent on the facts and circumstances • Lotions, soap, or other cosmetics containing CBD might be lawful depending on the circumstances • CBD in a vaping product may fall outside FDA’s jurisdiction unless the vaping product makes a therapeutic claim, or if there is a tobacco ingredient in the vaping fluid • Oils or other products labeled “pure CBD” without any other claims may be difficult to assert FDA jurisdiction over

236 FDA Work on Cannabis

FDA Cross-Agency team collaborates on cannabis issues Office of the Commissioner Office of Botanical Review Team (BRT) Regulatory Office of Pharmaceutical Quality (OPQ) Affairs

Center for Center for Center for Center for Center for National Center for Food Drug Biologics Devices & Veterinary Center for Tobacco Safety & Evaluation Applied Evaluation & Radiological Medicine Toxicological Products Nutrition & Research Research Health Research

Pictures: https://www.umassmed.edu/nutrition/Cardiovascular/ask-nutritionist/How-Can-I-Eat-More-Fruits-and-Veggies/ ; https://www.usatoday.com/story/news/nation/2018/07/25/prescription-drugs-industry-has-long-promised-cut-prices/830704002/ ; https://mymodernmet.com/fantastic-portraits-of-farm/ ; https://www.fda.gov/MedicalDevices/ProductsandMedicalProcedures/DeviceApprovalsandClearances/Recently-ApprovedDevices/ucm624483.htm ; https://www.theatlantic.com/politics/archive/2016/05/low-tar-cigarettes/481116/ ; https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/SmallBusinessAssistance/UCM611463.pdf ; https://www.fda.gov/aboutfda/centersoffices/oc/officeofscientificandmedicalprograms/nctr/whatwedo/researchdivisions/ucm078482.htm ; https://www.fda.gov/BiologicsBloodVaccines/ScienceResearch/ucm234680.htm

237 FDA Public Hearing

• FDA held a public hearing on May 31, 2019 – Goal: Obtain scientific data and other information about products containing cannabis and cannabis-derived compounds to inform FDA regulatory oversight of these products – Over 100 speakers presented – Over 4500 comments submitted to the docket – More hearing information

• On March 11, 2020, FDA reopened the docket – FDA encourages stakeholders to submit comments, data, and information related to CBD to the public docket

238 FDA Role in Regulation of Cannabis Products

CANNABIS

Cannabis-derived compounds Cannabis-related compounds • Cannabis sativa L. is a plant that contains • These synthetic compounds are created • Compounds occurring naturally in over 80 different naturally occurring in a laboratory the plant – like CBD and THC compounds called “cannabinoids” • Can be used to manufacture drug • These compounds are extracted • Two well-known cannabinoids: products directly from the plant • Cannabidiol (CBD) • Some synthetic compounds may also • Can be used to manufacture drug • Tetrahydrocannabinol (THC) occur naturally in the plant and some products • Plants are grown to produce varying may not • • Examples: Synthetically-derived Example: highly-purified CBD concentrations of cannabinoids – THC or dronabinol (also naturally occurring) and extracted from the plant CBD • and nabilone (not naturally occurring) Agency approved one cannabis- • These plant variations are called cultivars derived drug product: Epidiolex • Agency approved 3 synthetic cannabis- related drug products: Marinol & (cannabidiol) Syndros (dronabinol), Cesamet FDA and Cannabis: Research and Drug Approval Process (nabilone) 239 Cannabis – Derived Compounds

Examples of other cannabis-derived Cannabis-derived compounds CBD compounds • Compounds occurring naturally in the plant – like CBD and THC • Other Cannabinoids: • These compounds are extracted directly CBDA, THCA, CBN, CBDV, from the plant CBN, CBC, CBG, CBGA, • Can be used to manufacture drug CBDV, THCV, etc. products • Example: highly-purified CBD extracted THC • Terpenes: Myrcene, from the plant Limonene, Linalool, • Agency approved one cannabis-derived Caryophyllene, Pinene, drug product: Epidiolex (cannabidiol) etc.

FDA and Cannabis: Research and Drug Approval Process

240 Cannabis – Derived Compounds: Cannabinoids

Cannabidiolic Acid (CBDA) Tetrahydrocannabinolic Acid (THCA) Cannabinol (CBN)

Cannabichromene (CBC) Cannabigerol (CBG) Cannabigerolic Acid (CBGA)

Cannabidivarin (CBDV) Tetrahydrocannabivarin (THCV) >100 different cannabinoids naturally occur in cannabis

Chemical structures from: https://www.caymanchem.com/product/90080/cannabidiol; https://www.caymanchem.com/product/12068/%CE%B49-thc; https://www.caymanchem.com/product/18090/cannabidiolic-acid-(crm); https://www.caymanchem.com/product/ISO60175/thca-a-(crm); https://www.caymanchem.com/product/25495/cannabinol; https://www.caymanchem.com/product/ISO60163/(%C2%B1)-cannabichromene-(crm) ; https://www.caymanchem.com/product/15293/cannabigerol ; https://www.caymanchem.com/product/9001572/cannabigerolic-acid ; https://www.caymanchem.com/product/20165/cannabidivarin-(crm); https://www.caymanchem.com/product/18091/tetrahydrocannabivarin-(crm)

241 Cannabis – Derived Compounds: Terpenes Myrcene Limonene Linalool

Caryophyllene Pinene • At least 20,000 different terpenes exist in nature

• >100 different terpenes naturally occur in cannabis

Chemical structures from: http://www.chemspider.com/Chemical-Structure.28993.html ; http://www.chemspider.com/Chemical-Structure.388386.html?rid=92f338e2-4be3-45d9-98ba-b0a485adb345; http://www.chemspider.com/Chemical-Structure.13849981.html?rid=e442d668-4833-47b0-bb73-6e9005eb035f&page_num=0; http://www.chemspider.com/Chemical-Structure.4444855.html?rid=2ed455f9-002e-498e-98c9-4b7aa557aabf&page_num=0; http://www.chemspider.com/Chemical-Structure.74205.html?rid=315cfc32-16fd-4ec1-af7a-8811c4c5eeba&page_num=0

242 Cannabis Drug Development

• Cannabis products intended for use under clinical trial with a claim of therapeutic benefit or with any other disease claim are drugs – Submit an Investigational New Drug Application (IND) or request Pre-IND meeting with clinical division – Drug sponsors formally propose that FDA approve a new pharmaceutical via the New Drug Application (NDA)

• We treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products – Meaning they’re subject to same authorities and requirements as FDA-regulated products containing any other substance

• Botanical Drug Development Guidance for Industry – Provides Agency’s current thinking on botanical drug development – Focuses on quality controls – Botanical raw material growing conditions

NIDA Photo: https://www.drugabuse.gov/publications/research-reports/marijuana/letter-director

243 243 Botanical Raw Material Controls

• Pesticide residues • Team-based review • GPS location • Aflatoxins • Independent • Stage of plant • Elemental impurities reviews by each growth at harvest • Microbial limits discipline for safety • Harvest • Foreign material and efficacy time/season • Adulterants

• Washing, drying, • CMC • GACP grinding BRM • Qualitative & • • Controlled Plant species Quantitative transport from • Varieties and cultivars • GPS location of the • Growth conditions • Washing, drying, • Preservationdescription of field to testing • Botanical ID, macro farms or indoor (RH, temp, light) facility grinding BRM proceduresBDS and BDP and microscopic growing facilities • Stage of plant growth • Control of foreign • Temperature, relative at harvest matter humidity %, light • Harvest time/season • Preservation conditions procedures • Long-term vs. short- • Transportation term storage

• Varieties and • GPS location of • Growth conditions • Washing, drying, • Preservation cultivarsTracing Goodthe farms Agriculture or (RH,and temp, Collection light) grinding Practices BRM (GACP)procedures • Control of foreign • Temperature, relative • Botanical ID, indoor growing • Stage of plant growth at harvest matter humidity %, light macro and facilities • Preservation • Harvest conditions microscopic procedures • Long-term vs. short- time/season • Transportation term storage

Tracing Good Agriculture and Collection Practices (GACP)

244 FDA Resources

FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD)

On this page: • Consumer Information • FDA Communications • Regulatory Resources • Questions and Answers

245 Commissioner’s Statement: March 5th, 2020

FDA Statement from Commissioner of Food and Drugs – FDA, Stephen M. Hahn M.D. FDA Advances Work Related to Cannabidiol Products with Focus on Protecting Public Health, Providing Market Clarity Updates Provided: 1. Educating the Public About Potential Risks of Using CBD 2. Closing Knowledge Gaps in Both Safety and Potential Benefits 3. Monitoring the Marketplace with a Focus on Greatest Risk to Public Harm 4. Conclusion

246 FDA’s CBD Work Plan

Develop a comprehensive research agenda that includes stakeholder input to address data gaps related to preclinical and clinical data needs identified based on scientific review of CBD safety data.

Evaluate potential new pathways for CBD products, while evaluating issuance of an enforcement discretion policy and continuing with WLs and enforcement as needed to address public health risks

Respond to mandated Reports to Congress

Continue to engage and communicate with consumers, federal and state regulators, as well as other stakeholders.

247 Summary and Conclusions

• FDA has a well-defined role to play in the regulation and development of products containing cannabis and cannabis-derived compounds

• FDA continues to focus on supporting scientific and rigorous testing and approval of drugs derived from cannabis

• FDA will solicit input on how to make legal pathways for the lawful marketing of these products more efficient

• FDA will continue to protect and promote the public health with respect to these products

248

Additional Resources

250 FDA Resources & Contacts

• CDER – FAQs (drugs): https://www.fda.gov/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/faqsaboutcder/ default.htm – General contact info: https://www.fda.gov/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/contactcder/def ault.htm – Drug Quality Questions (and contact BRT): [email protected] – SBIA: [email protected] or call (866) 405-5367, (301) 796-6707 – FDA and Cannabis: Research and Drug Approval Process

• CFSAN – Questions (foods, dietary supplements, cosmetics): https://www.fda.gov/AboutFDA/CentersOffices/OfficeofFoods/CFSAN/ContactCFSAN/default.htm – Office of Dietary Supplement Programs, CFSAN mailbox: [email protected]

• Docket Info and CBD Data – Information on CBD Data Collection and Submission

251 FDA Support for Botanical Drug Development

• CDER Botanical Review Team (BRT) serves as an expert resource for CDER on all botanical issues

• Provides a stand-alone pharmacognosy review for all original botanical INDs and NDAs (MaPP 5210.9)

• General inquiries: [email protected]

• Get more information, FAQ’s and related links at the BRT webpage

Picture: Copyright Steven Foster, https://nccih.nih.gov/health/greentea

252 FDA Support for Drug Development – CSS

• Controlled Substance Staff (CSS) is available to help with FDA-DEA interactions • Example: issues around abuse potential assessment requirements to an NDA submission • CSS performs specific functional roles, including providing consultation services to CDER Review Divisions and acting as the CDER FDA liaison to other government organizations

• Get more information at the CSS webpage

253 FDA Support for Drug Development – SBIA • CDER Small Business & Industry Assistance (SBIA) – Mission: engage with small pharmaceutical business and industry by providing timely and accurate information on human drug development and regulation – Who they serve: focus on small businesses, all regulated pharmaceutical industry, both domestically and internationally – Goals: help small pharmaceutical business and industry navigate the wealth of information that FDA offers and provide assistance in understanding regulation of human drug products – Outreach Services and more information • Get more information at the SBIA webpage and follow them on LinkedIn

254 FDA Support for Drug Development

• Regulatory programs and expediting pathways for important drug development – Fast Track Designation, Breakthrough Therapy Designation, Accelerated Approval, and Priority Review of NDAs – https://www.fda.gov/forpatients/approvals/fast/default.htm

255 Thank you!

256 Bryan Zumwalt Consumer Brands Association Calling for stronger and clearer federal regulatory guidance in the CBD marketplace United States Of Patchwork Regulations Bryan Zumwalt Consumer Brands Association What We’ve Found

• Nearly four-in-ten Americans incorrectly assume CBD is just another name for marijuana • 92% of Americans incorrectly assume, or have no idea if CBD is federally regulated • Upon learning that the FDA does not regulate CBD, 82% of Americans said they were at least moderately concerned • In a test of 59 CBD products, more than half contained either 20% more or less CBD than the label claimed • Among ailments Americans are using CBD to treat include: cancer symptoms (21%); neurological disorders (21%); heart health (25%); and bone health (27%) We are supporting • more funding for scientific research on safety • more funding for enforcement to go after bad actors We are calling for • a uniform federal standard that can ensure consistent rules across all jurisdictions once the science justifies and an appropriate safety standard can be set. Megan Olsen Council for Responsible Nutrition CBD products as dietary supplements Cannabis Law & Policy Virtual Summit: Hemp and CBD April 21, 2019 Megan Olsen, Vice President & Associate General Counsel Council for Responsible Nutrition

Council for Responsible Nutrition How to Develop a Legal Pathway for CBD and Protect Consumers

• What would a legal path forward look like at the federal level? • What tools are available to protect consumers now and in the future? • What role do state AGs play?

Council for Responsible Nutrition FDA Position on CBD in Dietary Supplements • CBD cannot be sold in dietary supplements • FDCA excludes an article approved as a new drug or is the subject of substantial clinical drug investigations BEFORE use in supplements • BUT, FDA can create an exception to this rule

Council for Responsible Nutrition Hurdles to a Legal Path Forward • “It’s complicated” -- FDA • Timeline (FDA has suggested 3 to 5 years, minimum) • Scope (e.g., whole hemp extract versus isolate) • Limitations (e.g., on dose, required label statements, etc.) • Safety • Existing regulatory structure already accounts for these issues • “We recognize the high level of interest in dietary supplements as a potential pathway for products containing CBD, and we are actively evaluating potential rulemaking to allow CBD in dietary supplements.” -- FDA report to Congress, March 5, 2020

Council for Responsible Nutrition Congressional Action

“Congress’s intent was clear with the passage of the Farm Bill that these products should be legal . . . .” – Mitch McConnell (R- KY)

“The passage of the 2018 Farm Bill is Congress’s clear intent to further advance and support the domestic production and sale of hemp and hemp derivatives like CBD.” – Ron Wyden (D-OR)

Council for Responsible Nutrition H.R. 5587 – Stand-Alone CBD Legislation • “A bill to amend the Federal Food, Drug, and Cosmetic Act with respect to the regulation of hemp- derived cannabidiol and hemp-derived cannabidiol containing substances.” • Introduced by Agriculture Committee Chairman Collin Peterson (D-MN) • Cosponsors include Reps. Cindy Axne (D-IA), Salud Carbajal (D-CA), James Comer (R-KY), Matt Gaetz (R-FL), Thomas Massie (R-KY), Chellie Pingree (D-ME), Mark Pocan (D-WI) and Denver Riggleman (R-VA) • Bill provides FDA flexibility to allow hemp-derived CBD to be marketed in dietary supplements • Also requires study/report from UDSA regarding regulatory and market barriers for farmers engaged in hemp production

Council for Responsible Nutrition Protecting Consumers Now and in the Future • Good Manufacturing Practices (GMPs), labeling requirements, adverse event reporting, etc. • Need FDA Enforcement • FY 2020 Funding -- +$2 million for CBD activities (for “research, policy evaluation, market surveillance, issuance of enforcement discretion policy, and appropriate regulatory activities…”) • Third-Party Analysis and Verification • Trade Association Tools • E.g., CRN Supplement OWL (https://www.supplementowl.org/)

Council for Responsible Nutrition Thank You

Megan Olsen Vice President and Associate General Counsel [email protected] 202-204-7672

Council for Responsible Nutrition Michael Bronstein American Trade Association of Cannabis and Hemp Efforts by the private sector create a safe and regulated markeplace

The Pathway for Regulation and Consumer Protection

Emerging Areas of Importance:

○ The 2018 Farm Bill created a pathway for the federal government to regulate hemp ○ Some discrepancies between state and federal law still exist as the program develops ○ Regulatory clarity needed on CBD ○ Hemp must be grown either through a state regulatory plan approved by US DOA or under the actual US DOA ○ CBD may not currently be marketed as food or dietary supplements while the FDA contemplates regulations ○ Without resolving issues from an oversight perspective, it causes issues for businesses, public health and safety, and consumers protection ○ More traditional scrutiny such as from state attorneys general or other federal agencies related to consumer protections may apply Marketing Claims, Labeling & ProductIntegrity

Current challenges: ● FD&C Act ○ FDA has said that all CBD products must comply with the applicable federal laws, including the Federal Food, Drug, and Cosmetic Act (FD&C Act). FDA has taken the position that it is not lawful to add CBD to food, dietary supplements, and pet foods ○ Health and medical claims and untested assumptions are prohibited ● CBD as a food additive and state/federal conﬂicts ○ Further confused by marijuana-derived CBD product and hemp-derived CBD product ○ Some states make exemptions for hemp-derived products (i.e. Virginia, Colorado, Minnesota) ● Differentiate and identify illicit unlawful products from regulated products and operators both to consumers, public health ofﬁcials, and law enforcement ● Chain of custody and provenance ● Additives ● Marketing and Labeling ● Testing Marketing Claims, Labeling & ProductIntegrity Standards: Marketplace & LawEnforcement

Current MarketAnalysis & Market Challenges:

● Laws have been developed on a state by state level so there is very little uniformity ● Emerging public health issues ● Laboratory challenges developing national testing protocols ● A marketplace need for consistency and uniformity of product for public health and safety ● Federal regulatory agencies, state governments, departments of health, departments of agriculture, and law enforcement have been looking for guidance on the marketplace, best practices, and how the market is currently being regulated across multiple states ● ASTM International and consensus based standards organizations enter the game and are forming the basis for interaction Hemp Supply Chain - Current Example Certiﬁcation

The following are the initial priorities to implement a certiﬁcation program to help law enforcement and consumers know regulated from illicit products:

Phase I:Minimum standard: validating regulated products

1.Source of product and chain of custody 2.Proof of license in good standing 3.Proof of testing for contaminants and legalTHC limits 4.Financial transparency 5.Packaging and labeling 6.Marketing of product Certiﬁcation

The following are the top initial priorities to implement a certiﬁcation program to help law enforcement and consumers know regulated from illicit products:

Phase II:Additional standard: validating regulated product production conditions and business practices

1.Production protocols 2.Plant inspections 3.Laboratory 4.Diversity and Inclusion

Once the initial certification parameters are developed in conjunction with law enforcement, protocols can be ratified by consensus based standards organizations such asASTM International and have third party certification.An initial feasibility study will be run through multi-state operators. During this phase, certification plans, structure, and 501(c)3 will act as the certification body with a developed fee structure for participants for administration of the program. Hemp Supply Chain - Potential Outcome Q&A Cannabis Law & Policy Virtual Summit April 21, 2019 Austin P. Bernstein Cannabis Project Director and Assistant Attorney General [email protected]