Pot producers look past retail, shift focus to medicines

Canadians are counting down to the legalization of recreational marijuana this summer, but industry players are already racing to get ahead in a potentially more lucrative market segment for the plant in the years to come: cannabis-based pharmaceuticals.

Companies are researching and developing marijuana-based medicines that, they hope, will not only have broader appeal to doctors and patients, but will create lucrative intellectual property that will provide revenues far into the future.

This is the next level of the “green rush,” said Har Grover, the chief executive of Toronto-based Scientus Pharma, a biopharmaceutical firm focused on cannabis.

“The potential down the road is far greater than what the recreational market sizes are … What you need to do is deliver medicine in a form that patients and physicians are used to using.”

Marijuana firms are eyeing the higher margins these value-added products can command compared to dried bud. Licensed medical marijuana producers also see the associated intellectual property as key to their future profitability, providing a competitive edge and a resilient profit stream as cannabis moves toward commoditization like every agricultural crop.

While cannabis itself cannot be patented, licensed producers can apply for plant breeders rights protections for marijuana strains if they can sufficiently prove it is new.

But innovations such as formulations, delivery mechanisms, and scientific techniques for testing have the potential to qualify for intellectual property protection.

“There is certainly a desire by companies to develop cannabis products that can have defensibility from a business standpoint, from an IP standpoint,” said Neil Closner, chief executive of licensed producer Med-Releaf.