NEW YORK (TheStreet) -- The contract for growing marijuana for the U.S. government is up for renewal, and it will be closely watched as the government likes to protect this monopoly. For 30 years, the University of Mississippi has been the sole provider of cannabis for government sanctioned marijuana research. That could change.
The contract comes up for renewal every five years and on May 29, the government posted a new request for proposals. Previously the contract amounts weren't significant, but with the increasing demand for study material, the National Institute of Drug Abuse, or NIDA, increased the quota to 46 pounds. NIDA decides who gets government grown marijuana for research.
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The Drug Enforcement Agency has come under fire for creating the monopoly under NIDA and awarding the contract to only one supplier. The group cites the UN's Single Convention on Narcotic Drugs from 1961 as the reason why only one supplier is approved. The convention requires each nation to designate a single official source of marijuana. However, paragraph 2(b) of Article 29 of the Protocol states that a country " ..ensure that the manufacture of drugs, their salts and preparations is restricted to as small a number of establishments and premises as practicable." That language seems to permit a few suppliers, not just one necessarily.
There are over 700 registered growers for medicinal marijuana in the state of Colorado alone that could bid on this contract. Not to mention public companies like Cannabis Sciences (CBIS) that might want to become a major marijuana supplier to the government. You would think that they would jump at the chance to be the nation's supplier, but that isn't the case.
Rick Doblin, founder & executive director of the Multidisciplinary Association for Psychedelic Studies or MAPS said, "No one would bid on this contract because first you'd have to give all of your product to NIDA, but then you also test seized marijuana that is used to arrest people. Most marijuana growers don't want to be a part of a group that wants to throw people in jail."
Doblin went on to explain that in his opinion the NIDA monopoly exists to keep medical marijuana from being legalized. For example, if a researcher uses NIDA pot for a cancer study and then has good results and the FDA approves it, the researcher is unable to sell that product to the cancer patient. It is only grown for research not for resale. Under those circumstances, a nightmare scenario emerges: being able to tell a cancer patient you have a remedy, but you're unable to give it to them. Doblin's group, along with Dr. Lyle Craker, a respected professor at the University of Massachusetts has fought long and hard for decades to break the monopoly.
MAPS supported Dr. Lyle Craker, a respected professor at the University of Massachusetts who filed in 2001 to be allowed to grow research cannabis. Craker said the quality from NIDA's supplier, the University of Mississippi, was poor and the supply was constrained. After years of efforts, the DEA Administrative Law Judge approved the University of Massachusetts to grow the research cannabis, only to be overruled by the DEA.
The DEA said the pot is fine and there are no problems with supply. But history seems to indicate otherwise.
MAPS was recently approved by the U.S. Public Health Service to study marijuana to relieve the symptoms of Post-Traumatic Stress Disorder or PTSD in U.S. veterans, using the cannabis from NIDA's supply grown at University of Mississippi. Unfortunately, the "not supply constrained NIDA" told MAPS in May that it doesn't have the cannabis and won't until January 2015 and can't name a specific date and won't name a price. MAPS stated, "NIDA is required under the Controlled Substances Act of 1970 to provide a 'continuous and uninterrupted supply' of marijuana for research, which they have now admitted to failing to provide."
NIDA spokesperson Sheri Grabus said she has heard of no concerns about the quality. "NIDA is satisfied with the University of Mississippi's performance under this contract. NIDA researchers have not formally complained to us regarding product quality, so there has not been a need to complain to the University of Mississippi regarding quality. If we had received such complaints, we would have addressed any issues with the University of Mississippi."
Doblin disagrees saying, "It's old, dried, brittle and mixed with seeds and stems. This has not been quality. Their goal is to provide poor quality medical marijuana to researchers in order to get negative results. Some of the marijuana is over 10 years old."
The battle to break the NIDA monopoly has raged for years. As recently as 2013, Dr. Craker has been denied by the United States Court of Appeals the ability to grow cannabis for research, which is especially ironic because in Massachusetts medicinal marijuana is legal and 20 dispensaries have been approved. The Court also felt the monopoly concern wasn't an issue because anyone can bid on the contract when it comes up for renewal. The Court also stated that NIDA gives it test pot either free or at no cost.
However, Doblin said, "We've been working with Israel -- they are able to grow it for 50 cents a gram, Uruguay sets its price at $1 a gram, NIDA's price from years ago was $7. That's not a competitive price."
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NIDA's monopoly shuts out American producers and could end up opening up the market to foreign farmers. Canadian growers are trying to get a drug master file opened at the FDA, but it will take a year to get it accepted. Dobkin said, "The NIDA monopoly is doomed. It will be broken by foreign imports."
NIDA insists that it welcomes other bids but that it hasn't received any in the past.
"Besides the University of Mississippi, the only other proposal ever received was when this was re-competed in 1999," Grabus said. "A commercial organization submitted a proposal which was subsequently determined unacceptable by a peer review committee. Thus, to date, we have never contracted with any other organization to grow, analyze, store and distribute the marijuana."
Maybe when the word gets out that the contract is open for bidding American producers will apply. However, Doblin isn't optimistic. "You have to demonstrate you have an FDA license to apply, which only Ol' Miss has. It's fruitless for anyone else to apply. If you currently cultivate marijuana, then the DEA says you are violating Federal law and therefore you can't get an FDA license."
-- Written by Debra Borchardt in New York.Follow @WallandBroad