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On Nov. 13, 2015, Justin Trudeau, the new Prime Minister of Canada, sent a mandate letter to the nation’s Minister of Justice, Jody Wilson Raybould, with the following instructions: “Working with the Ministers of Public Safety and Emergency Preparedness and Health, create a federal-provincial-territorial process that will lead to the legalization and regulation of recreational marijuana.”

Trudeau’s letter represents one of the most historic global stances to begin the first federally legal recreational marijuana operations in North America listed on the OTC stock market.

However, a key question lingers in such a restricted market: will operating costs of OTC Canadian marijuana operations remain at indoor registered light and AC-fueled addresses, or focus on distribution of clones and seeds to farmers, similar to another plant with relations to a prohibitive past in the Cannabaceae family, Humulus lupulus L., better known as hops?

Could you imagine if a website like, previously listed on the OTC when owned by General Cannabis Incorporated, which has made millions of dollars by providing an address listing service for marijuana stores starting at $295 per month and a menu review website for marijuana products, was called Now try and imagine if charged a hops vendor $300.00 a month to list its address for clients to locate places to find and review hops strains. You probably can’t envision this absurd scenario because people know they can find beer made from hops at most stores everywhere in Canada and the U.S., eh.

Now, in the new corporate world of marijuana lobbying and regulation, certain players have an interest in keeping the OTC pot-stocks industry segmented, taxed, regulated and controlled in an indoor environment to benefit the many sectors of the business that have popped up around the plant: computer security, smartphone applications, hydroponics, nursery operations, HVAC, lights, fertilizers, lab testing, edibles, oils, tinctures, capsules, drinks, etc.

In the principal phases of alcohol prohibition in the early 20th century, the U.S. gave medicinal whiskey permits to pharmacies, including Walgreens, to prescribe whiskey as medicine, thereby providing a foot in the door to controlled initial profiteering for specific companies and individuals to sprint ahead of the pack and dominate sections of the liquor market. Perhaps, when and if the time arrives that industrial scale operations of marijuana and hemp start, the companies with initial leads in the industry could become the Budweisers and Marlboros of U.S. and Canadian recreational marijuana followed by an evolution into more conglomerated operations like Unilever.

How do government plans and cash-only OTC pot stocks bought and sold internationally interact to affect the black market while fewer than 10 North American federally approved marijuana grow-ops exist on the OTC markets, nowhere near supplying the real recreational or medical underground demand?

That’s right: six Canadian government approved medically operated pot stocks legally allowed to run their grow-op money thru federal banks exist on the OTC (TWMJF, OGRMF, TBQBF, ACBFF, APHQF, MQTRF) and at any given moment, stand to become the first North or South American federally legal recreational marijuana grow operations listed on the OTC, perhaps creating in the industry a hemispherical shift.

Other Canadian government approved oil and research pot stocks exist on the OTC, also with permits from Health Canada—the medical marijuana production health approval arm of the Canadian government run by Dr. Jane Philpott, Minister of Health. However, more pot stocks than not exist on the OTC with their addresses of operation listed in Canada unapproved by Health Canada’s regulatory system.

To understand who controls the marijuana use regulation in Canada, look no further than Health Canada, in charge of granting Canadians access to marijuana for medical use under a strict set of regulations for patients and producers, detailed in Marihuana for Medical Purposes Regulations. Marijuana remains a controlled substance in Canada, and the possession and/or production of marijuana is illegal outside the purview of the MMPR. According to the MMPR, only Health Canada can legally supply marijuana seeds and dried marijuana to persons authorized to possess and/or licensed to produce marijuana for medical purposes.

Individuals authorized to possess or produce medical marijuana under the Marijuana Medical Access Regulations should note that Health Canada has transitioned from the MMAR to the MMPR. Under the MMPR, all marijuana possessed or produced under the MMAR Authorization to Possess and/or Personal-Use or Designated-Person Production license should have been destroyed by March 31, 2014, and all production of marijuana in homes should have ceased by April 1, 2014. Furthermore, as of April 1, 2014, individuals cannot use an ATP license issued under the MMAR as proof of authority to possess medical marijuana. Under the MMPR, Canadian citizens can only legally access medical marijuana through licensed producers, including the six mentioned earlier. According to Health Canada, the maximum amount of medical marijuana that authorized individuals can possess at any given time is 30 times their daily amount as indicated by their licensed Health Care Practitioner, to a maximum of 150 grams.

“All applications to produce marijuana for medical purposes undergo the same strict and rigorous review. When an application is received it undergoes an initial screening to ensure that it is complete. Complete applications undergo a more in depth screening on key elements of the MMPR,” said Sean Upton, Senior Media Relations Officer for Health Canada. “The application is thoroughly reviewed to ensure compliance with all the requirements of the MMPR. This includes but is not limited to security measures, good production practices, packaging, labelling, shipping, and record keeping. A pre-license inspection occurs once the physical site is ready and the results of the security clearance checks have been received.”

Therefore, Health Canada now controls, and licenses 27 marijuana producers in Canada while prohibiting people from growing marijuana at their homes. Legally, Health Canada has nothing to do with the OTC approval process of pot stocks from Canada. Furthermore, under the Canadian MMPR, individuals who access marijuana for medical purposes cannot let others use their marijuana, grow marijuana, import or export any marijuana or marijuana seeds to or from Canada, or produce derivatives of marijuana such as hashish, hash oil, resin, etc. Given the recent U.S. Congress approval to deny U.S. Drug Enforcement Administration raids in states with legal medical marijuana operations for which growers can attain seeds, make their own products, and attain plants from sources other than the federal government, the Canadian marijuana guidelines under the new Prime Minister may seem more conservative than drug policy in the U.S.

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A recent report out by Bank of America Merrill Lynch has cannabis investors buzzing, but the real buzz may have more to do with the influence of the venerable name than the results. Does the report go beyond the surface to mine investment information that truly applies to the medical cannabis market? Having a reputable name associated with the sector certainly creates attention and eases the transition to legality, but is BofAML playing it too safe?


At First Look

The report raises a few questions and leaves some uncovered territory. “We think the significance of the report lies more in the fact that it is the first from a major investment firm, than in the specifics of the report which, while well researched, reflects a narrow segment of the overall medical market,” said John Kagia, Director of Industry Analytics at New Frontier Financials.

BofAML may be exploring a narrow segment, but its implications could be much larger. The data is skewed toward the pharmaceutical industries as the best bet for investment. The report seems more like an attempt to associate cannabis with the pharmaceutical industry in a sort of cultural reverse merger, a term familiar to many invested in the cannabis market. Does that limit the true potential for cannabis research? It also begs a bigger question: are bio pharmaceuticals true cannabis products?

“[The report] did not really address the potential implications of the large nutraceutical/whole-plant extract market, which will continue to a far larger proportion of the overall medical marijuana sector than just the pharmaceutical market,” Kagia said.

The stigma of illegality may have influenced BofAML’s choices for research and exploration, but a drug’s scheduling should not be a validation of its efficacy. Nor should such drugs be preferable for testing for the same reason. Creating synthetics as a way of getting around a classification may not promise the same results as authentic derivatives of cannabis.

It is unclear if BofAML is willfully ignoring the inherent conflict of interest its report poses for Bank of America Corporation and its subsidiaries. As reported by Jequetta Byrd and Laura Lieberman on Nov. 13, “When contacted by Bloomberg BNA regarding their policy on providing services to marijuana businesses, Bank of America said simply, ‘As a federally regulated financial institution, we abide by federal law and do not bank marijuana-related businesses.’”


Testing the Labs

There is no dispute about the need for testing standards as illustrated by ongoing problems, such as the recall by Advanced Medicine Alternatives, Denver’s 13th marijuana recall in 13 weeks.

The BofAML report names some cannabis testing labs without going into much detail; otherwise, it focuses on well-established labs, ignoring a burgeoning and important lab testing sub-sector; not only that, these labs have first hand knowledge of the plant, knowledge that can’t be trumped by chemically produced cannabinoids.

Signal Bay (OTC Pink: SGBY) and Digipath (OTCQB: DIGP) are two of the three publicly traded cannabis testing labs mentioned in BofAML’s report. CannLabs (OTCQB: CANL) gets the most attention of the three, but the company has imploded, and the founder dismissed. The economic reality of entrepreneurial investors backing the testing labs to create income can clash with the reality of trial-and error-research.

But the mainstream labs have their own issues. There is some concern about the increase in industry-funded testing. In the larger pharmaceutical sector there was a 43% increase in industry-funded clinical trials since 2006. In that same period trials funded by the National Institutes of Health have declined 24%. Pharmaceuticals, and cannabis, need consistent standards and regulation across the board, whereas individual companies usually only test their own products.


Synthetic Fixation

BofAML’s category of Life Science Tools, which includes consumables, is played down in contrast, but too much perhaps. Pharmaceutical testing is important but that same testing will be needed for recreational products to ensure purity and standards. The report estimates the testing market to be $800-900M and the LST sector $50M by 2020, maybe $150M at the high end.

In Colorado, medical and recreational sales were down in October due to harvest but overall consumption is up for the year. How much of that is extraction business? Nearly $700 million of medical and recreational marijuana was sold in Colorado in 2014. In only 10 months of recorded data, the 2015 numbers have already passed last year’s mark, with more than $814 million in sales. That is only one state!

Are synthetic cannabinoids the same? Is BofAML playing it too safe by only researching the data on these artificial cannabis potions? After all, synthetic cannabinoids are also sold on the street, cheaply produced with unpredictable side effects. Are synthetic cannabinoids trading off the myriad benefits of cannabis only to create adverse side effects?

The scene has changed fast since the analysts compiled their data and BofAML held its 2015 Healthcare Conference last spring. Several of the companies named have had more serious issues. This illustrates the need for accurate data about a company’s fundamentals and management and not just its progress in the labs.

GW Pharma’s (NASDAQ: GWPH) test results for Sativex were not as promising as expected. Epidiolex is still going through testing stages. The report compares it with synthetic cannabis like Marinol, also known as dronabinol, but its side effects may be byproducts of the refined synthetic material and not indicative of pure cannabis-derived medications. It also creates the misperception that natural cannabis may have those same adverse side effects. Although GW Pharma’s products may be true derivatives of cannabis, its share price has dropped from a high of $134 to $64.36, as of Dec. 22, 2015.

Perhaps synthetics were developed as a way around legalization, but do we know that they really are that effective? Judged by the current problems with Insys Therapeutics (NASDAQ: INSY), they were not efficacious, and the company has to deal with serious allegations of fraud.

Zynerba (NASDAQ: ZYNE), a company that produces patent-protected synthetic cannabinoid therapeutics for trans-dermal delivery, will not have any more study results until mid-2016, or early 2017. In the meantime, ZYNE’s share price has dropped from $43 to $11.46, as of Dec. 22, 2015.


Reading Tea Leaves

Although well researched, analysts may also want to spend some more time searching the fundamentals of these new and truly innovative companies and learn the tricky waters they navigate, instead of just banking on the safe ones. Big Pharma getting into the legal cannabis industry may be inevitable, but jumping the gun to create copycat synthetics and subsidizing labs to test them could create misleading and questionable data. For instance, BofAML’s report states that somnolence is a common side effect of cannabis, which is not true of cannabis in general. It depends on the strain. It is a side effect of Indica strains of cannabis, or hybrids containing it, but it is not characteristic of sativa strains. The report also seems to imply that only leaves are sold for smoking, but buds and flower are actually used from the richest part of the plant, the same as in medical use.

There is no doubt the cannabis sector is something of a minefield but maybe the real answer does lie in the actual plant, even from an investment standpoint. Are cannabis companies heading down the same road as typical drug manufacturers or are they really exploring the plant? Like many other aspects of this nascent sector, creative thinking is necessary; we can’t rely on old practices. Credible research on natural plant-derived extracts and cannabinoids should be the real foundation of this industry.

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Since 2015 has been to great to us, we want to give back to you. Between now and December 31st, MJIC Media and our partners are giving away free stuff every single day! So how do you enter?

  1. Visit our twitter and Retweet our giveaway tweets. Use #Cannagifts!
  2. Like and share our Facebook page, comment #Cannagifts!

We’ll directly message winners on January 1st.

One lucky winner will receive a FREE ticket to the 2016 Marijuana Investor Summit!


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We recently hosted a Marijuana Investor Summit event in Las Vegas, and did a series of outstanding interviews with top public cannabis executives. Subscribe to our newsletter and to our Youtube channel to check out all the great footage.

CEO William Waldrop with Signal Bay Inc. (OTC: SGBY) interviews with David Friedman, CEO of MJIC Media at the Cannabis Growth Capital Conference in Las Vegas, NV. Starting Monday, December 14th, Signal Bay will be hosting a series of educational workshops for cannabis entrepreneurs throughout Oregon.

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BOULDER, Colo., Dec. 1, 2015 /Weed Wire/ — Child-resistant packaging and consistent, appropriate labeling is vital for the legal cannabis industry to move forward and it is in that spirit that CLS Holdings USA Inc. (OTCQB: CLSH), a development stage diversified cannabis company, has sponsored the inaugural white paper by MJIC Media, a marijuana media conglomerate.

The white paper, “State by State Packaging Rules Regarding Cannabis: Summary without Cynicism,” addresses specifics within cannabis packaging and labeling, including images, logos and resemblances; regulatory speed; expiration dates; and an alphabetical state-by-state review, with all the states that have legalized at least some possession or consumption of cannabis. The discussion of each state’s rules and regulations is accompanied by a link to a more official and complete source of information.

“It is important that we, as an industry, move to standardize testing and labeling across state lines,” said Jeff Binder, CEO of CLS Holdings USA. “MJIC Media is at the forefront of disseminating information to the cannabis industry. It is an honor to have been chosen by MJIC Media to sponsor their inaugural white paper.”

“We’re thrilled to produce this with CLS Holdings USA because cannabis packaging and labeling is a critical sector of the industry that all market participants need to understand and this white paper is a big step toward a broader consensus,” said Chris Gromek, COO of MJIC Media.

“The white paper should help investors and entrepreneurs by bringing to their attention the need for standardization of testing and labeling for the cannabis industry,” Binder said. “In particular, investors should consider investing in cannabis companies that perform good testing and provide good labeling for their products.”

CLS Holdings USA has made a complimentary copy of the white paper available fordownload on its website.

About CLS Holdings USA Inc.

CLS Holdings USA Inc. is a diversified cannabis company, specializing in the extraction and conversion of cannabinoids. CLS stands for “Cannabis Life Sciences,” in recognition of the Company’s patent pending proprietary method of extracting various cannabinoids from the marijuana plant and converting them into a higher quality and quantity of products. The Company’s business model includes licensing operations, processing operations, processing facilities, sale of products, brand creation and consulting services. For more information, check out:

About MJIC Media

MJIC Media LLC owns and operates the leading properties in the emerging legal cannabis industry, including the Marijuana Index, which tracks and reports on publicly traded cannabis-related equities; Marijuana Investor News, the premier news agency covering the industry; Marijuana Investor Summit, a premium conference provider and industry educator; and Cannabis Trader, the go-to source for cannabis investment education and stock information. For more information, visit: