WHY CANNABIS? WHY NOW?
Used as medicine for over 6,000 years, the chemical and industrial powerhouse that is the cannabis plant is as historically significant as it has been controversial. Despite growing bodies of anecdotal evidence around its therapeutic properties, the medicinal value of cannabis today is not fully understood, nor is it fully agreed-upon. Many nations have amended their laws to allow for medical cannabis use, such as Canada, Uruguay, Israel, Thailand, Columbia, Germany, Jamaica, Mexico, and the Netherlands, to name a few. However, on a global scale, significant barriers still stand in the way of widespread patient access. Industry transactions, such as the sale of UK’s largest medical cannabis firm, GW, for over USD $7.2 billion prove that major pharmaceutical companies across the globe are motivated to take their stake in cannabis. However, the foray into cannabis by the world’s largest pharmaceutical corporations, known as Big Pharma, will not come without risk.
A rich history of uses but a seeming lack of legal integration is the very real paradox of the global cannabis industry today. And yet, more governments and businesses than ever before are realizing the potential the plant has to become food, fibre, medicine, and beyond: positioning cannabis to become one of the most highly demanded, but most highly regulated commodities of the next decade. It is therefore inevitable that production and trade of cannabis will emerge across nations through complex legal frameworks and global supply chains. However, the hidden cost of globalized business are the over 40 million adults and children estimated to be trapped in some form of modern slavery, such as forced labour, human trafficking, or child labour. Human exploitation of any kind goes against the ethos of the cannabis plant, which is intended to heal. And so, as early members of the legal cannabis sector, we have an urgent responsibility to recognize the risks of human exploitation in supply chains. By guiding preventative action and advocating for a sector-based approach to human rights policy, the cannabis industry must learn ways of identifying risks, assigning accountability, and allowing for traceability along its entire value chain.
Through the “Ripe for Exploitation”series, the Cannabis Education Guild (the CEG) has discussed what the cannabis industry must learn from the parallel risks witnessed in cocoa and apparel supply chains. Now, considering the rising potential for cannabis-derived pharmaceutical products, the CEG believes that the cannabis industry must also learn about the risks of labour exploitation found in the supply chains of the multi-trillion dollar “Big Pharma” industry, before similar life-costing mistakes are replicated. (1)
BIG PHARMA: RELIEF HAS ITS COSTS
Imagine cutting open a medical pill and having a complete picture of: every ingredient it contains, where those ingredients came from, and the type of work employed for those ingredients to be produced. This is the line of sight medical patients deserve, but are not granted, due to the clouded nature of pharmaceutical supply chains. Many Western drug manufacturers have been faced with the risky realities of their supply chains as they source for APIs or “active pharmaceutical ingredients,” the ingredient most responsible for a drug’s intended effects. As well, these risks are often heightened as they source for carrier ingredients, which are generally minerals, metals or other raw materials that aid in the composition or effectiveness of a pharmaceutical product. Many of these materials may be sourced from regions with potentially high levels of political uncertainty, vulnerable labour markets, inadequate business governance, and a lack of collective rights for workers. Doing business with countless subcontractors across the globe, a pharmaceutical manufacturing company may not know at all about the injustices in their supply chains without active engagement. (2)
The described characteristics of globalized Big Pharma supply chains make for poor identification of human rights risks and make the necessary enforcement measures incredibly complex for both businesses and governments to achieve. As was illustrated by drug manufacturer Merck, who’s reliance on the mica mining industry of Jharkhand, India, which exploits roughly 22,00 child labourers, was exposed through a 2008 investigation. (3) This case also demonstrates how intergenerational poverty of a labour market, inadequate child care and education, and a lack of collective bargaining for workers reinforce instances of modern slavery, something all global corporations must become attuned to. However, modern slavery presents itself in a spectrum of ways, and may be hidden in plain sight. For example, Big Pharma company Novartis faced challenges farther downstream its supply chain in 2011 when hazardous working conditions, withheld wages, and extended overtime without rest were discovered in the manufacturing facilities of a Chinese supply partner. (4)
Coupled with the competitive forces of the industry, Big Pharma corporations are driven to find the lowest possible cost of goods figure, no matter the risks. The result is an industry that relies upon the unjust exploitation of adults and children around the world, effectively doing the exact opposite of what the industry was created for: healing and improving human health and well being.
SOURCING RISK: THE CANNABIS-DERIVED API
In a time with broader public acceptance around alternative and plant-based medicines, alongside increasing public scrutiny around ingredient sourcing, Big Pharma is breaking into new territory by embracing cannabis, or cannabinoids, as its newest API. The two most discussed chemical compounds found in the cannabis plant are the cannabinoids tetrahydrocannabinol (THC), cannabidiol (CBD). In 2019, there were over 400 registered clinical trials for CBD alone funded by pharmaceutical companies, demonstrating Big Pharma’s already vested interest in using cannabinoids as future APIs. And so, as the venture into medical cannabis unfolds, the risks of modern slavery in ingredient sourcing must not be forgotten.
In Canada, it has been proven how more robust policies and medical acceptance can allow for the legal sale of cannabinoid pharmaceutical products, such as Sativex, along with access to other forms of the plant, such as cannabis oil, dried flower, or seeds for home growing. Cannabis oil, in fact, is the most common form of cannabinoid extraction. In 2020, Canada exported 101% more cannabis oil for medical research than the previous year, proving how it may be primed to become the “liquid gold” API for Big Pharma. (5) This is significant for the global context because many countries may begin by controlling medical access through the sole legalization of cannabis-derived pharmaceuticals made from extracted oil, or even through the acceptance of synthetic cannabinoids, as seen in markets such as South Korea and the Philippines. Beyond this, as countries develop their competencies and come to compete with Canada’s cultivation and extraction of medical cannabis, there will be heightened risk for modern slavery in the sourcing of cannabis APIs.
Cannabis extraction is incredibly dangerous, as demonstrated by a growing number of fire safety incidents in the US in recent years. (6) And so, many North American companies rely on a set of compliance systems that help keep workers and the community safe in the presence of hazardous industrial chemicals or processes. Without protective measures of this kind, a workplace may become primed for labor exploitation, given that unsafe and harsh conditions are indeed forms of modern slavery. For Canada’s cannabis industry, certifications like GMP or GPP have been helpful— but not holistic—in governing workplace safety for the business of cannabis extraction. This has led external bodies to develop their own guidelines for the industry. For instance, a set of technical safety standards for commercial cannabis extraction in Canada was developed by the Underwriter’s Laboratory in partnership with the CEG and a group of industry leaders. (7) And so, as we look to countries considering legalization, it is crucial that we learn from the gaps in the Canadian market and address safety through policies specific to cannabis extraction so that workers are adequately protected.
COMPLIANCE IS KEY: REGULATIONS AND CORPORATE GOVERNANCE
Along with increasing legislation around human rights in supply chains, as seen through the UK Modern Slavery Act and the California Transparency Act, the pharmaceutical company of today is also faced with socially conscious investor, and consumers who demand transparency. As such, corporations have had no choice but to take action against the risks in their supply chains. For example, major drug manufacturer, Pfizer, was involved alongside its competitors in the creation of the Pharmaceutical Supply Chain Initiative (PSCI), a set of industry principles around ethical practices and the fight against modern slavery in Big Pharma supply chains. (8) However, one may question whether it would be more objective for an external, unbiased, third-party to aid in the creation of these standards. For the cannabis industry, this may look like the development of a “chain of custody standard” that allows for the assignment of ownership and responsibility over practices involved with creating goods along a supply chain. This would allow consumers the comfort of knowing that their medicine was made without the use of modern slavery.
A MOVEMENT TOWARDS SLAVERY-FREE CANNABIS
As an independent partner to the industry, the CEG is advocating for responsible and traceable supply chain policies while aligning the sector in preventative action against labour exploitation and modern slavery. The time for cannabis is now, but we must not miss out on the urgent and life-saving opportunity to right the wrongs of a harsh globalized system which profits off of human exploitation. Whether you are an industry member, investor, or consumer of cannabis, we urge you to stand with the CEG in recognizing the risks, and paving the way for a slavery-free cannabis industry.
Cannabis Education Guild
As a platform focused on global cannabis education and social good, the CEG aims to educate professionals in legal and emerging cannabis markets, while investing in meaningful social impact to create a healthy and ethical cannabis industry. Learn more at cannabiseducationguild.com
1. Size of global pharmaceutical industry, by total revenue in 2019. Statista. https://www.statista.com/topics/1764/global-pharmaceutical-industry
2. Risks of sourcing in pharma https://www.unepfi.org/humanrightstoolkit/chemicals.php
3. Modern Slavery in Pharmaceutical Supply Chainshttps://pscinitiative.org › downloadResourceFile
5. Canada exports over 6,000L of cannabis oil in 2020, a 101% y/y increase from 2019. https://mugglehead.com/canadian-cannabis-exports-more-than-double-in-2020-while-imports-approach-nil/#:~:text=Exports%20of%20cannabis%20oil%20for,annually%20by%20169%20per%20cent.
7. Underwriter’s Laboratory with Cannabis Education Guild to develop a technical guideline for extraction business in Canada.
8. Pfizer’s statement of compliance with Modern Slavery act https://cdn.pfizer.com/pfizercom/responsibility/workplace_responsibility/2019_California_Transparency_UK_MSA.pdf