The Big Tobacco giant has purchased a stake in a new botanical drug startup aiming for FDA approval of a new hemp-based drug.
British American Tobacco (BAT) is getting into the neurological drug business. For a company whose primary focus is manufacturing and selling highly addictive and carcinogenic-rich nicotine products, diverting financial resources into the wildly uncertain experimental drug world would initially appear a head-scratcher for analysts and industry experts.
However, this venture is part of a new and somewhat cynical path for the tobacco behemoth. This past November, BAT announced a substantial investment in Charlotte’s Web Holdings, a Boulder-based CBD and hemp company known for its wide array of hemp-based health and wellness products.
As part of that eyebrow-raising transaction, BAT purchased $56.8 million of convertible debenture providing the Big Tobacco conglomerate with a 20% stake in CW.
Now the two oddly-paired companies are starting a new foray together into the high-tech world of botanical drug development to treat neurological disorders. As reported by numerous media outlets this week, BAT will invest $10 million into a new joint venture between Charlotte’s Web and AJNA BioSciences PBC.
AJNA is a botanical drug development startup company based in Littleton, CO. Joel Stanley, one of its co-founders, is the former CEO and board chairman at CW. The trio is seeking approval from the U.S. Food and Drug Administration (FDA) for a hemp-derived novel botanical drug to treat a yet-identified neurological disorder.
Following the additional investment by the London-based giant Charlotte’s Web and AJNA, each will hold a 40% stake in the venture, with BAT now owning 20% of the company. The next step in the still tenuous approval process will involve the new partners filing an Investigational New Drug application with the FDA.
They will begin Phase I clinical development of the drug later this year. Per the arrangement agreed to prior to BAT’s involvement, the drug will contain CW hemp genetics, with AJNA providing laboratory and regulatory services and clinical expertise for the project.
Orrin Devinsky is AJNA’s Chief Medical Officer and will lead the joint initiative. Following the announcement, he said, “I believe the properties of cannabis and hemp are well suited for the FDA’s new Botanical Drug Development pathway.”
“I believe the properties of cannabis and hemp are well suited for the FDA’s new Botanical Drug Development pathway.”
Orrin Devinsky, AJNA’s Chief Medical Officer
While his sentiments and the science behind it may be true, the likelihood of receiving FDA approval is no slam dunk, even with the financial backing of BAT and the proven track record of Charlotte’s Web. The FDA has only approved one cannabis/hemp-derived drug for consumer use – Epidiolex.
Left out of much of the reporting on this new venture is the continuing enmeshment of Big Tobacco’s influence in the world of hemp and cannabis. When the movement to legalize marijuana and its sister plant, hemp (both are part of the cannabis sativa plant), began over a decade ago, the idea of having large tobacco companies invest in future cannabis and hemp business ventures was tantamount to heresy.
However, as with most well-intentioned “revolutions” that achieve victory, success, massive growth and even larger profit margins, big-money investors attempt to swoop in and supplant the smaller and less well-funded heroes who actually made legal marijuana a reality.
More and more new campaigns in cannabis battleground states are being bankrolled and controlled by entities from Big Tobacco and Big Alcohol. Under the guise of “freedom” and “liberation,” these organizations are systematically attempting a quiet yet effective takeover of the industry.
Watchdog groups and activists have already begun to sound the alarm bells. Many of them have worried and expressed their concerns about the unsavory influence of BA and BT on the young and developing cannabis and hemp industries.
This latest solidification of financial and business development bonds between one of the largest CBD manufacturers in the world and a tobacco titan like BAT only serves to further darken the potential future of large-scale hemp and cannabis endeavors down the road.
As one of America’s Founding Fathers and the third President of the United States, Thomas Jefferson, eloquently said, “Vigilance is the price of liberty.” So for those who care about the hemp industry and the control of its soul, stay vigilant.
“Vigilance is the price of liberty.”
U.S. President Thomas Jefferson