Pharmaceutical company Insys spent $500,000 to block legalization in Arizona. Five months later it won approval for a cannabis-derived medical drug

As marijuana legalization swept the US in November, Arizona was alone in its rejection of legal weed. There, a pharmaceutical company called Insys was a major backer of the successful campaign to stop the state’s recreational cannabis measure, publicly arguing that pot businesses would be bad for public health and endanger children.

But to marijuana activists, the motive of Insys was clear – to squash the competition.

Confirming those suspicions, Insys has now received approval from the US Drug Enforcement Administration (DEA) to develop its own synthetic marijuana, the latest case of Big Pharma battling small cannabis growers.

Could a marijuana tax help Portland's minority-owned businesses? Read more

With marijuana now legal in more than half of the US, the budding cannabis industry and longtime underground players have grown increasingly concerned about the threat posed by powerful pharmaceutical manufacturers, which have simultaneously helped fight legalization while seeking to develop their own synthetic cannabis.

“I really don’t have a lot of hope for the small guy in this country,” said Dr Gina Berman, medical director of the Giving Tree Wellness Center, a cannabis dispensary in Phoenix, Arizona. “Pharmaceuticals are going to run me down. We have a small business, and we can’t afford to fight Big Pharma.”

The Insys case provides a stark illustration of what cannabis leaders say is the unethical and harmful position of the pharmaceutical industry in marijuana – fighting to block a plant that in some cases has proven to be an effective, safer and cheaper alternative to addictive prescription drugs.

Big Pharma’s support of groups opposing recreational weed have been well documented in recent years. But Insys’s pursuit of synthetic cannabis signals the beginning of a different kind of threat and a potentially longer-term obstacle drug companies could pose if they seek to corner the market as weed laws inevitably spread across the country.

“We’ve got these pharmaceutical companies that are using their lobbying power to bring something to market that people can grow in their home,” said JP Holyoak, a marijuana dispensary owner and cultivator in Arizona, who chaired the state’s legalization campaign last year. “They recognize that the horse has left the barn regarding marijuana. They can’t beat it, so now they’re trying to just take it over.”

Insys, which did not respond to multiple requests for comment, donated $500,000 to the anti-legalization campaign in Arizona last year, marking one of the largest ever single contributions to a pot opposition campaign, according to the Washington Post.

Facebook Twitter Pinterest Dr Gina Berman, medical director of the Giving Tree Wellness Center, a cannabis dispensary in Phoenix, Arizona. Photograph: Bessie Bell

On 23 March, less than five months after Arizona’s pot measure failed, Insys announced that the DEA had given the green light for the launch of Syndros, its cannabinoid designed to treat chemotherapy patients struggling with nausea and Aids patients with anorexia.

The drug is a lab-made liquid form of tetrahydrocannabinol (THC), a key chemical compound in cannabis. It’s different from the street synthetic marijuana known as K2 or Spice, which often involves chemicals sprayed on to plants and has been linked to overdoses and deaths.

The approval has sparked fierce backlash from cannabis activists, who argue that Insys has helped prevent the very kind of treatment that it is now on track to market.

“It’s a little bit disgusting when you think of the collateral damage for human beings,” said Berman.

What’s more, Insys also manufacturers fentanyl, a painkiller that is 50 times stronger than heroin and has a deadly track record. In December, six former Insys executives were arrested for allegedly bribing doctors to prescribe fentanyl to patients who didn’t need it.

Insys’s association with the opiate crisis makes its efforts to thwart regulated marijuana use all the more alarming, critics said.

“Fentanyl is a drug that is rapidly becoming the major pathway for opioid deaths in the US,” said W David Bradford, a University of Georgia professor whose research has shown that medical marijuana lowers prescription drug use. “There’s conclusive evidence that marijuana is effective for pain management. And nobody has ever died from inhaled cannabis use.”

Over the years, donors associated with drug rehab and treatment centers have also backed anti-cannabis measures, drawing similar accusations of hypocrisy considering marijuana’s potential to treat opioid addiction.

With an anti-marijuana conservative leading the US Department of Justice, and the federal government continuing to treat cannabis as an illegal drug with raids and prosecutions, researchers and cannabis producers say are blocked from uncovering marijuana’s ability to help curb the opioid epidemic.

That means painkiller manufacturers such as Insys have financial incentives to support the slowdown of cannabis, especially when the delays give them time to manufacture their own government-approved synthetic drugs.

“It’s pretty absurd that federal law considers marijuana to have no medical value, but allows for the development of synthetic versions of the same substance,” said Mason Tvert, of the Marijuana Policy Project, which has backed many state legalization measures.

The existing legal grey area makes it hard for marijuana operations that struggle with a wide range of hurdles, such as banking challenges, law enforcement conflicts and contradictory laws. But current pot restrictions are good for pharmaceutical companies that have the resources and infrastructure to navigate Food and Drug Administration approvals.

In one investor filing, Insys even directly admitted that marijuana legalization could “significantly limit the commercial success” of its cannabis-based products.

“All of these pharmaceutical companies rely upon the FDA for their monopolistic protections,” said Holyoak. “They’re going to continue to try to keep marijuana illegal except for that.”

Existing dispensaries, meanwhile, are often “mom and pop shops”, said Dr Frank LoVecchio, a medical director at an Arizona poison center, who has researched medical marijuana. “They don’t have drug reps. They don’t have the budgets that these guys have.”

Larger pharmaceutical companies may end up purchasing dispensaries in the future, he added.

But Michael Collins, deputy director of the Drug Policy Alliance, said he didn’t suspect that pharmaceutical companies would interfere with marijuana businesses given that the recreational market continues to grow and will remain distinct from drug corporations.

Berman, however, said she struggled to understand pharmaceutical companies needed to be involved in the first place. “Why are we trying to reconstruct the plant when we actually have a plant and it’s much less expensive for patients to access?”