Uruguay made the headlines 17 month ago by being the first country to completely decriminalize marijuana use, a decision that was not without controversy and opposition – for example, the country’s pharmacies have refused to distribute the product. But that’s recreational cannabis; this report is about medical cannabis and here, again, Uruguay seems to be setting the pace: it was the first nation in the world to fully legalise the research and development, as well as cultivation, distribution, sale and consumption of non-synthetic cannabinoids and hemp.
Enter a junior Australian exploration company looking for a new direction. International Goldfields (ASX:IGS) has 35% of a Brazilian gold project, and earlier this year considered and then dropped acquiring a West Australian precious and base metals target. Now it is entering the medical cannabis business by taking an 85% interest in Winter Garden Biosciences, a pharmaceutical company based in Uruguay that is developing mass market, non-synthetic cannabis products.
The attraction of this small South American nation is that, according to IGS, in the rest of the world laws prohibit growth and research on hemp with a THC content of more than 0.03% (THC being tetrahydrocannabinol, the mind-altering substance in cannabis). As the company says, this has altered every aspect of the plant to the point “that it offers almost no useful research benefits”. IGS argues that if the THC level is below 1%, that level is considered non-psychoactive. The company says the US Drug Enforcement Agency and Food and Drugs Administration have lobbied the world to get level down to 0.03%.
Only synthetic plants can be utilised in most global R&D and, again according to IGS, “these are ineffective and inadequate for both research as well as pharma-grade medical applications”.
Winter Garden is at present the only company in the world licensed to operate in Uruguay using natural levels of THC and cannabinoids, with accompanying patent, marketing and clinical trials.
IGS says that, within 12 months, Winter Garden aims to produce strains on a commercial scale to target neurological pain and palsy, anti-tumor, anti-inflammation, anti-nausea and anti-depression needs.
The problem, as Winter Garden sees it, is that hemp crops tend to be of marginal use due to restriction on THC levels and lack of diversity in available varieties. This lack of diversity in crop breeds has a long history of being involved in famines – the Russian famines due to shortages of grain, corn in North America, rice in Asia, potatoes in Europe. These food shortages all began due to a lack of diversity in the crop and the inability to breed the diverse crops needed to protect the chain of production.
IGS, in its release to the Australian Securities Exchange, makes the point that older varieties of hemp have tremendous value for seed, ballast, fibre, flower, flower and soil reclamation research. “In the West they have chemically altered the composition of hemp to have very little commercial value by shortening the plant and breeding the chemicals out of the plant while trying to reduce the THC”.
Winter Garden has an established 20 acre farm (which can be expanded to 1,000 acres) and laboratories in Uruguay. It is led by Julian Strauss who obtained from the Canadian government a marijuana producing licence (2006) and a medical marijuana licence (2007).
The IGS initiative has yet to enthuse Australian investors, with the stock stuck at 0.4c.