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Analysis: Cannabis Legalization Applies “Competitive Pressure” to Pharmaceuticals Market

San Louis Obispo, CA: Cannabis legalization negatively impacts stock market returns for pharmaceutical companies, according to data published in the journal PLOS One.

Researchers affiliated with California Polytechnic State University assessed whether the passage of statewide legalization laws influences pharmaceutical firms’ stock market returns.

Authors reported that legalization is correlated with lower returns. “Returns decreased in response to both medical and recreational legalization, for both generic and brand drug-makers,” they reported. “Investors anticipate a single legalization event to reduce drug-maker annual sales by $3 billion on average.”

They concluded: “Legal cannabis applies competitive pressure to both generic and brand drug markets, across both classes of drug-makers. ... We predict that if the remaining ... states without medical cannabis legalization were to legalize cannabis, spending on conventional pharmaceutical drugs would decrease by almost 11 percent. ... The size of the response we see suggests that investors expect a large substitution away from conventional pharmaceuticals. ... The market’s recognition of cannabis as an alternative to conventional medications documented here underscores the need for additional research into the medical potential of cannabis [and] ... suggests [that] cannabis might be a useful tool for increasing competition in U.S. drug markets.”

Prior studies have consistently shown that those with access to cannabis products typically reduce or eliminate their consumption of pharmaceutical drugs over time, particularly with respect to the use of opioids, benzodiazepines, anxiolytics, and sleep aids.

Specifically, data published earlier this year in the journal Health Economics identified “significant reductions in the volume of prescriptions within the drug classes that align with the medical indications for pain, depression, anxiety, sleep, psychosis, and seizures” in states that had enacted adult-use cannabis legalization. Prior ecological studies have similarly identified an association between the adoption of medical cannabis access laws and reduced Medicaid prescription drug spending.

Full text of the study, “US cannabis laws projected to cost generic and brand pharmaceutical firms billions,” appears in PLOS One.

Case Study: CBD Oil “Should Be Considered as a Treatment Option” for Autism Patients

Toronto, Canada: The administration of plant-derived CBD oil is safe and effective in the treatment of autism-related symptoms and it ought to be considered as a viable treatment option for patients with the disorder, according to the findings of a case study published in the journal Cureus.

A team of Canadian investigators assessed the long-term use of CBD oil containing 20 mg of CBD and less than one mg of THC in a non-verbal pediatric patient with autism spectrum disorder. Prior to initiating CBD treatment, the patient exhibited behavioral symptoms with outbursts of anger and physical aggression (e.g., punching, kicking, biting, head-butting, and scratching).

Following twice-daily CBD treatment, the patient “experienced a reduction in negative behaviors, including violent outbursts, self-injurious behaviors, and sleep disruptions. There was an improvement in social interactions, concentration, and emotional stability.”

Investigators concluded: “In the case study presented, the child patient has shown behavioral and cognitive improvements with no side effects reported. ... With the increasing clinical studies on the use of cannabidiol in treating patients with mood disorders, anxiety, chronic pain conditions, and other behavioral problems, it should be considered as a treatment option in managing symptoms related to autism.”

Full text of the study, “A double-blind, randomized, controlled crossover trial of cannabis in adults with Tourette Syndrome,” appears in Cannabis and Cannabinoid Research.

Clinical Trial: Vaporized Cannabis Shows Limited Efficacy for Various Symptoms of Tourette Syndrome

Toronto, Canada: Vaporized cannabis containing ten percent THC provides symptomatic relief to patients with Tourette Syndrome (TS), according to placebo-controlled data published in the journal Cannabis and Cannabinoid Research.

Canadian researchers assessed the short-term effects of vaporized cannabis of varying potencies versus placebo in nine patients with TS.

They reported that subjects exhibited and perceived modest improvements following the administration of THC-dominant cannabis, but that they failed to demonstrate similar improvements following the use of either lower THC cannabis and/or high-CBD cannabis. Researchers acknowledged, “[G]iven the small sample size, ... it is difficult to draw definitive conclusions about the benefits of THC.”

Prior studies assessing the long-term use of oral THC have documented a reduction in tics in TS patients. The findings of a 2019 study concluded, “Medical cannabis seems to hold promise in the treatment of GTS [Gilles de la Tourette syndrome] as it demonstrated high subjective satisfaction by most patients however not without side effects and should be further investigated as a treatment option for this syndrome.”

Full text of the study, “A double-blind, randomized, controlled crossover trial of cannabis in adults with Tourette Syndrome,” appears in Cannabis and Cannabinoid Research.

Nevada: Supreme Court Rules Employers Can Fire Workers for Off-Duty Cannabis Consumption

Carson City, NV: Employees who consume cannabis off-the-job for non-medical purposes can be fired by their employers for failing a drug test, according to a ruling by the Nevada Supreme Court.

The Court rejected the plaintiff’s argument that his use of cannabis constituted “lawful activity” under the state’s employee protection law. That law makes it unlawful for employers to “[d]ischarge . . . any employee . . . because the employee engage[d] in the lawful use in this state of any product outside the premises of the employer during the employee’s nonworking hours” so long as “that use does not adversely affect the employee’s ability to perform his or her job or the safety of other employees.” In this instance, however, judges opined that the statute refers only to behaviors and/or products defined as legal under both state and federal law.

Nevada law limits employers from sanctioning workers who are enrolled in the state’s medical cannabis access program. In addition, a 2019 law makes it “unlawful for any employer in [Nevada] to fail or refuse to hire a prospective employee because the prospective employee submitted to a screening test and the results of the screening test indicate the presence of marijuana.” However, state law remains silent on the issue of whether employers can take actions against those employees who use cannabis for non-medical purpose while away from the job.

Justices concluded: “If the Legislature meant to require employers to accommodate employees using recreational marijuana outside the workplace but who thereafter test positive at work, it would have done so. It did not.”

By contrast, laws in Connecticut, New Jersey, New York, Montana, and Rhode Island explicitly prohibit employers from firing workers solely on the basis of a positive marijuana test. Last week, California lawmakers advanced similar legislation to Democratic Gov. Gavin Newsom.

The case is Ceballos v. Palace Station Hotel and Casino.