It certainly isn't easy for big biotech companies like Jazz Pharmaceuticals (JAZZ) to navigate the world of cannabis medical research. Despite selling millions of dollars worth of prescriptions for Epidiolex when the company was GW Pharmaceuticals, it is ultimately working with a federally illegal product. Still, it managed to stage study trials and get a product approved by the Food and Drug Administration. Imagine the process for a small company that doesn't have the same level of resources.
One such company is Zelira Therapeutics, a global cannabinoid-based research and biopharmaceutical company (ASX: ZLD) (ZLDAF) . Zelira has a portfolio of products and a pipeline of candidates undergoing clinical development. Its focus is on developing branded cannabis products for the treatment of a variety of medical conditions, such as autism.
I asked CEO Oludare Odumosu, about U.S. regulation, and potential changes ahead. Odumosu received his doctorate in biochemistry and a master's in public health-epidemiology and biostatistics from the Loma Linda University School of Medicine and School of Public Health and a bachelor of science in biology from Calvin College.
What challenges have you faced while expanding your cannabis business?
One of the major challenges in my area of the cannabis industry -- the research and development of cannabinoid-based products -- is the current regulatory climate. In the U.S., I view federal prohibition as the main inhibitor to expanding the rigorous scientific study of cannabinoids. And lagging behind in research is only part of it. On a global scale, even under national legal or medical programmes like the ones in Australia, Germany, and the U.K., the unique regulatory structure of new territory will continue to be the biggest challenges to expansion.
What is your expansion strategy?
Zelira has built its reputation on developing and commercializing cannabinoid-based medicine. Right now, I have my eye on markets that are emerging around the world that offer a purely medical or scientific point of access. Germany and the U.K. and two examples of this; they are "coming online," so to speak, in a way where clinical validation is a valuable way to enter the national market. The work Zelira has done over the years gives us that research and development foundation and credibility to enter highly regulated markets. Also, we are getting more involved in hemp-based CBD. Here in the U.S., especially, we are able to create and launch our scientific formulations of broad-spectrum CBD on a national scale that gives us direct to consumer access.
What advantage did going public bring your business?
The immediate advantages, beyond burnishing an image of trustworthiness and credibility, is that going public allows access to public capital markets. This is a key advantage of doing business in Australia, where Zelira is publicly traded and where cannabis is nationally legal. Here in the U.S., that process is much more challenging.
What happens to your business, or the the industry, if the legalization bill goes through?
As a scientist, I am excited for what it means for clinical research -- we will be able to harness the full genius of the U.S. scientific community to discover even more about the exciting pharmacology of cannabinoids. There is still so much more to learn.
Legalization would open the door for the development of new cannabinoid-based drugs that can become frontline medicines. Legalization would remove the rigid barriers that have barred companies like Zelira from being able to serve patients from all parts of the country, just like traditional pharmaceuticals.
How will this affect growth?
I believe that legalization will propel growth in a positive manner because it creates a larger network and expands multiple channels and access points on a national scale. I believe we will see benefits that range from the quality and diversity of cannabis research, to stepping up social justice,to opportunities for better medical and economic outcomes for more people.
Upon legalization, what happens to the businesses that exist because of lack of federal legalization?
In general, prohibition has stifled competition, limiting access to capital markets. It has also created an environment for the current cannabis business structures within the state programs. Federal legalization should anticipate a meaningful transition period that accommodates the changes that the current businesses will have to make.
In your opinion, if federal legalization passes, how will that affect research?
I think that we are on the cusp of major breakthroughs and new research around cannabis due to the momentum that's been building over the last few years. Even now, while we are still in the midst of federal prohibition, the federal government is already making powerful moves to expand the research landscape. This move is already sending strong signals to the science community about what is to come.
What about insurance?
With legalization, there will be a regulatory path for companies to bring cannabinoid-based products to the FDA and put them in the pipeline for potential coverage on par with any number of more familiar pharmaceutical medicines. That will have a huge impact on driving the market forward, especially in terms of doctor education and advocacy, reimbursements and patient access.
And how about capital?
The ability to access capital in order to grow one's business is a foundation of American business viability. Having that access would generate a huge amount of new investments and economic activity.
Modifications to banking are linked to capital markets and taxation in many ways. It will affect every aspect of the way the businesses operate, not to mention the new revenue and how that will be put to use.
What would be the appropriate role for states vs. the federal government?
I have a background in the traditional pharmaceutical industry, so I have seen firsthand the important role that the federal government can and should play in initiating and supporting new scientific research and pipelines for new medicines, as well as providing regulatory oversight. As a scientist who is heavily invested in leading a business venture, I'm generally in favor of any structure that creates more opportunities for the kind of groundbreaking clinical research, development and commercialization we've been able to accomplish.