Phil Warner says that one of the big selling points about his cannabis is that you would have to smoke a “telegraph pole-sized joint” to get high.
Warner is proud of the weakness of his cannabis because it promises an answer to one of the big issues facing the nascent medicinal cannabis industry: how to stop cannabis grown for legal medicinal purposes being diverted into the illicit recreational market.
In North America and Europe, where legalisation is well ahead of Australia, producers source their medicinal cannabis from smokeable marijuana plants. In order to prevent criminals stealing their crops, farmers spend huge sums ringing their fields with high electrified fences and 24-hour security cameras and store their harvest in concrete bunkers.
But Warner, a former filmmaker who founded a company called Ecofibre Industries Operations almost two decade ago, grows “industrial hemp” cannabis plants. He started breeding them two decades ago for non-medicinal use in fabrics, cosmetics and food rather than smoking. They are legal because they contain almost no THC, the chemical compound that gets you high. But he has worked out that his plants are rich in cannabinoids, the compounds that, according to a growing body of medical studies, can be used to treat conditions from multiple sclerosis tremors to epileptic fits, to nausea in chemotherapy patients, to pain for the terminally ill.
BRW Rich Lister Barry Lambert, whose granddaughter was treated for epilepsy by medicinal cannabis and this year made a $34 million donation to the University of Sydney to promote research into the herb, has recently made an investment in Ecofibre. Lambert, the founder of Count Financial Services who made a fortune when he sold to CBA, decided to tip in his cash after flying to Kentucky to inspect a joint venture between Ecofibre and US tobacco farmers who are supplying the growing medicinal cannabis research market in the United States.
Lambert says Warner’s combination of refining technology and specially bred hemp strains could be the start of a lucrative Australian industry. “Phil’s study and perseverance over the past 15 years means Ecofibre is the world leader in legally grown hemp and it will be a decade before the newcomers catch up, if ever.”
Looks like traditional pot
Warner’s plants look a bit like traditional pot and indeed they often confuse locals around Warner’s farms. A local lad recently jumped over the fence of one of Warner’s fields near Narromine in central NSW, picked some plants and sold them in the pub. But when the buyers smoked the weed, it did so little for them they asked for their money back and beat up the thief.
When police started asking questions and threatened to tear up his crop, Warner had to explain he was operating within the law. The THC content in Warner’s plants is below 0.3 per cent compared with a limit of 1 per cent in most states. “Smoking this plant is no good for anything but giving you a headache,” he told the police. Police test the THC content of the cannabis Warner grows on his research facility at Jerry’s Plains in the Hunter Valley in NSW.
Despite the low THC content, with the right technology, Warner’s industrial hemp is just as useful as the high-THC strains for medicinal purposes. Once the hemp is harvested, a process called fractionation can refine it into any mixture of cannabinoids or even increase the concentration of psychotropic THC. A high-THC blend is necessary for some medicinal uses, such as treatment of pain in palliative care.
Warner spent years collecting strains from all over, from France to Afghanistan, convincing regulators, police and legislators in Australia they should not be illegal, and then working with plant scientists at Southern Cross University in Lismore to improve them. He now has private growing rights, a sort of copyright for plant seed varieties, on three types of cannabis hemp and is developing another three
It costs about $1 million to develop each strain. Warner says one big advantage of his seeds is they are suitable for climates closer than 40 degrees to the equator, which make them perfect for Australia and tobacco-growing lands in the US and South America. Most other industrial hemp strains are for cooler climes.
Ecofibre’s business model does not involve marketing the cannabis medicines. Instead it will offer seed stock to growers and then license refining technology to those who make the pills and market them.
Regulation will affect success
Ecofibre’s success will depend partly on how medicinal cannabis is regulated both in Australia and worldwide and that is highly uncertain. If pot can be freely grown and smoked, as for example in Colorado and Mexico, there will be less need for Ecofibre’s police-friendly product. Warner says he is not worried because not every one will want to grow their own and people will still demand a convenient ready-made product that guarantees quality. “People can grow their own tomatoes but usually they don’t,” he says.
The more likely scenario for Australia is that, in order to reduce the risk of diversion to illicit use, government will stop short of allowing grow-your-own medicinal cannabis.
NSW is proceeding cautiously with clinical trials that use either leaf cannabis imported from overseas or else a pharmaceutical cannabis oral spray called Sativex made by a company called GW Pharmaceuticals. NSW Premier Mike Baird took the early lead in championing medicinal cannabis but he has not decided yet whether it will be legal to grow it in NSW.
In what some see as a sign of reluctance to allow a local growing program, Baird signed an agreement in early December to explore growing cannabis in Tasmania using the strict security regulations that govern the state’s existing opium poppy industry. Part of the program will involve working out whether you can grow cannabis plants that are native to the Middle East in Tasmania’s cold, wet climate. Queensland is also working closely with NSW.
The fear for some in the industry is that under pressure from police, conservative governments will try to prevent any local growing and only legalise the patented drug Sativex, which costs more than $1000 a month. NSW Medical Research Minister Pru Goward recently described Blackmores and other similar products as “street pot”.
Warner says this would be a mistake, because it is 50 times more expensive to buy patented Sativex, which is the approach NSW seems to be leaning towards. “The right thing is to make it available at a price that will make it conducive not to grow it.”
Value in non-medicinal applications
The Victorian government has announced it will legalise cultivation of cannabis for medicinal use but the plants will have to be grown on licensed farms and the product will be turned into carefully formulated pills or sprays and available only with a doctor’s approval. The system is similar to regimes now being developed in North America and Europe. The federal government has promised its own legislation allowing licensed cultivation but released no details.
Several companies are positioning themselves for this sort of scheme. What Warner and other industrial hemp growers fear is that they will be hit with requirements for unnecessary high fences. They also want to be allowed to use the many by-products of industrial hemp for other purposes such as food proteins and fibres for aerospace and automotive vehicles. “A lot of the value will be in non-medicinal applications,” Warner says. Currently, it is still illegal in many states to sell most hemp products even if they don’t contain THC.
Some firms are gearing up for the opposite strategy of growing high-THC strains of cannabis. ASX-listed MMJ-Phytotech is trying to raise capital from investors with a business model that involves working with cannabis growers and using a technique developed overseas to turn the cannabis into pills that meet Therapeutic Goods Administration standards.
The complementary medicines firm Blackmores Incorporated has sought approval to take part in the NSW clinical trials using a similar approach. Because they use high-THC cannabis, these firms will have to lower the level of THC during the refining process for many medical applications and in order to avoid breaking the law.
But so long as the plants are in the fields the police will be worried about people jumping over the fence. Warner is confident many growers will choose to use his low-THC seeds to avoid the high costs of keeping their cannabis crop secure. “Otherwise they will need all these bloody fences,” Warner says.