New Frontier Data, one of the leading analytics firms in the cannabis industry, recently published a 400-page research note titled, “The Cannabis Industry Annual Report,” looking at the state of legal marijuana markets for 2017.
Fortunately, I had a chance to talk to the firm’s founder and CEO, Giadha Aguirre De Carcer, and shoot a few questions her way about the report. However, with so much information available, I did not know where to start, so I decided to ask Giadha which topic she found especially interesting or unique.
“There was one topic that just blew me away!” she said, pointing to the fact that the cannabis plant had been registered in the U.S. Patent Office. There are two approved patents that could potential cover more than 50 percent of the strains in the market, the report explained.
“That’s the equivalent of patenting potatoes,” Giadha said. “To me, it’s just mind boggling. This just proves the abysmal lack of knowledge and understanding around these very unique plants.”
It’s important to understand that not all patents registered around the cannabis plant make zero sense.
Among the almost 400 patents that have been ﬁled in relation to cannabis, marijuana, CBD or THC, there are some that seem to adequately protect intellectual property, like techniques for extracting oil or specific infusion formulations. However, patenting the plant itself, or a few characteristics present in a majority of the strains out there, is where the problem lies.
What has happened is comparable to someone basically saying, “if a potato has more than 75 calories per 100 grams, and more than 25 percent vitamin C, then you have to pay a royalty to grow it or sell it.”
Giadha, then, went into the economic impact of patents.
If the patents for the cannabis plant remain in effect, anyone producing or retailing marijuana will see a negative impact of 10 to 15 percent on his or her margins, she explained.
Actually, cultivators’ margins have been shrinking over the past couple of years, she added. All a patent would do is further “narrow down the number of stakeholders in the cannabis industry and erode the growth of the industry.”
“Furthermore, a patent expert has informed New Frontier Data that similar patents have been filed in Europe, suggesting that Biotech Institute is in the process of accumulating worldwide rights to a large swath of the cannabis plant ecosystem in anticipation of prohibition laws being lifted in the U.S. and key international markets,” the report concluded.
The world is still finding out a lot of things about the cannabis plant, but, as the industry advances, we’ll need to address the patents issue to keep the space inclusive.
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