Below is a summary of the key components of the announcement made on April 30th to reschedule cannabis from Schedule I to Schedule III. If this legislation is passed, it will provide significant benefits to Greenspace Labs (GSL).

The Drug Enforcement Administration (DEA) says it will reschedule cannabis from a Schedule I to a Schedule III controlled substance under the Controlled Substances Act (CSA). This is an historic move, as it is the first time the federal government has acknowledged that cannabis has accepted medical uses and a lower potential for abuse compared to other Schedule I drugs such as heroin. Although rescheduling cannabis to Schedule III will not legalize recreational use at the federal level,  it will have a number of highly significant impacts as they relate to GSL in a medical context:

  • Schedule III drugs, shortly to include THC containing medical products, may be sold via pharmacies, so long as GSL holds the appropriate licenses from the DEA
  • Schedule III drugs may be transported across state lines, again assuming that GSL holds the appropriate licenses
  • DEA will grant appropriate licenses to those entities that are in the business of research into the medical uses of cannabis. 

As a next step, the DEA’s proposal must now go through a formal rulemaking process, including a public notice and comment period. This process could take several months, but the rescheduling represents a major milestone in federal cannabis policy reform.

The rescheduling provides an additional tailwind for the clinical work of our IBS franchise, which will commercialize a formulation in this hard-to-treat disease. Our pilot clinical trial for IBS patients is due to start later this year, and we have multiple grants submitted in Europe to support our preclinical research. Our ongoing commitment to cannabis research reinforces our position as a research entity with the DEA. The IBS market currently exceeds $4B and there are over 40 million sufferers in the US alone. An over-the-counter product made by IM Health was acquired by Nestle Health Sciences for ~$750M in 2020.

When rescheduling comes into effect, it will truly be seismic. Firstly, we will be able to supply to pharmacies across the country as well as dispensaries in contracted states. We already have our first product formulated and ready to be manufactured, TetraRX, which treats chronic pain:

TetraRX will be on the shelves of dispensaries in Rhode Island in July of this Year. With rescheduling, we will be able to supply pharmacies nationwide in addition to dispensaries. Our joint venture partnership with Ocean State Controlled Botanicals (OSCB), our manufacturer, means we will be able to scale production while maintaining quality control at one single facility. We will work with OSCB to bring the facility up to USP or GMP standards, depending on details determined in the rescheduling.

We have also started discussions to supply oncology clinics with a THC-based product to address chemotherapy-induced nausea and vomiting (CINV) for cancer patients. THC has been an approved antiemetic for CINV patients since 1984. This market alone is forecast to grow to $10.2B by 2031 globally.

Other disease states that we are developing formulations for include glaucoma and GI diseases.

In short, this move by the Biden administration validates and legitimizes our relentless focus on the medical and therapeutic uses of cannabinoids. It will benefit those organizations that are legitimately focused on cannabinoid research, and allows us to look at sales on a nationwide basis as opposed to a state-by-state basis.