How the U.S. Government Makes Money on Cannabis

NEW YORK (TheStreet) -- The government makes money off of cannabis; the same cannabis it declares illegal. The same cannabis it throws people into prison for selling.

The National Institute of Health received a patent on cannabinoids in October 2003. Aidan Hampson, the scientist who made the discovery while working at the Institute of Mental Health said, "I discovered the cannabinoid receptor in the brain that THC [the active chemical in marijuana] binds to. THC mimics something that occurs naturally in the brain and I asked myself, what's the natural key to this lock?" Hampson said if a scientist believes something could be important, then you patent it immediately.

"Any discovery you make, you hope it has a therapeutic benefit," said Hampson. In order to eventually get that discovery to patients, a drug needs to go through clinical trials. No drug company will pursue drug development unless they know who owns the intellectual property. "It would cost approximately $30 million to do a test." said Hampson. "No company will give you a second glance unless you own the intellectual property." Meaning, they won't want to spend the money unless they can recoup the cost of the test and they need the patent or a license on the drug in order to do so.

In June of 2013, the NIH granted the exclusive license to phyto-medical company KannaLife Sciences. Dean Petkanus CEO of KannaLife said it was very difficult to get the exclusive license to the patent. The company has the license for only one disease, Hepatic Encephalopathy, that is associated with liver disorders. It occurs in people with cirrhosis from alcoholism or hepatitis C and B as a couple of examples.

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