Could This Scary Finding Lead to Tighter Marijuana Regulations?

By Keith

First, do no harm.

Continue Reading Below

This hallowed principle of medicine has been followed for centuries. But some recent findings by researchers at University of California at Davis have raised concerns that some medical marijuana might be quite harmful -- and even fatal.

Could these scary findings lead to tighter medical marijuana regulations? And what could this mean for marijuana stocks?

Image source: Getty Images.

More From

A closer look at medical marijuana

An experience with one of his cancer patients led Dr. Joseph Tuscano to investigate the safety of medical marijuana. The patient had been told by a dispensary that inhaling an aerosolized marijuana blend would be safer than smoking. However, the patient developed a rare fungal lung infection after using the product. This infection wasn't curable, and the young man ultimately died.

Tuscano, a professor of internal medicine in the Division of Hematology and Oncology at UC Davis, teamed up with others at UC Davis to learn more about the risks associated with medical marijuana.However, the researchers ran into a roadblock. The U.S. Drug Enforcement Agency (DEA) doesn't allow marijuana to be used in research in institutions that receive federal funding. Because UC Davis does, the team had to perform all testing in a private lab.

The researchers used genomic analysis on 20 medical marijuana samples obtained from Northern California dispensaries. What they found was frightening. Multiple microorganisms were detected in the samples, including several that can lead to severe and even fatal lung infections. The team concluded that smoking, vaping, or inhaling aerosolized marijuana could pose serious risks for patients, especially those with weakened immune systems.

Regulations in flux

Because a large number of states have legalized medical marijuana, many patients and even some physicians might think that certain safety standards are in place. That's not the case, at least not on a federal level. Federal laws still prohibit the sale of marijuana, so there aren't any federal safety regulations in place, according to the research team.

However, that doesn't mean that states can't have their own safety regulations for medical marijuana. In fact, California's Medical Cannabis Regulation and Safety Act does have components that require several state agencies to establish regulations and standards for medical marijuana.

A major problem, though, is that these agencies are still in the process of developing regulations. The California Department of Food and Agriculture, for example, won't even begin to issue licenses for medical marijuana growers until 2018.

It also seems likely that the federal government will become more involved. This doesn't mean that the Justice Department will crack down on the sale of medical marijuana. We could instead see movement by theU.S. Food and Drug Administration (FDA) to establish federal safety standards, especially if current congressional efforts to pass legislation prioritizing state marijuana laws above federal laws are successful.

Potential impact of tighter regulations

Companies such as GW Pharmaceuticals (NASDAQ: GWPH)that develop cannabis-based drugs shouldn't be impacted by any increased regulations for medical marijuana. The active ingredient in GW's experimental epilepsy drug Epidiolex is cannabidiol, which is a chemical extracted from cannabis. GW Pharmaceuticals already must follow strict FDA regulations regarding the manufacture of cannabidiol.

However, it's possible that new rules could affect medical marijuana suppliers by requiring them to implement more stringent processes.Smaller marijuana growers would likely be affected more drastically than major producers likeMedical Marijuana, Inc. (NASDAQOTH: MJNA).

Medical Marijuana touts several safety and quality checks that are already in place for at least one of itstop products, Real Scientific Hemp Oil (RSHO) Gold. RSHO Gold is manufactured in Europe and tested prior to exporting to the U.S. After being inspected when imported, the product is sent to an accredited food safety testing lab before packaging and shipping to U.S. customers.

Could marijuana stocks be impacted by tighter regulations? Probably not much. Companies like Medical Marijuana would likely pass along any added expenses associated with meeting new quality standards to customers.

If new regulations were especially onerous, though, smaller growers with less capital could be forced out of business. The shakeout of smaller players could benefit larger marijuana growers.

In the meantime...

Until more effective safety regulations are in place, one of the lead UC Davis researchers, George Thompson III, issued a warning for patients. Thompson said, "Because microorganisms known to cause serious infections in immunocompromised patients were found to be common on marijuana, we strongly advise patients to avoid it."

The research team also stated that if patients did use medical marijuana, consuming the drug in baked goods was probably the best option. Although they weren't sure that such use was completely safe, they suspected that the high temperatures from cooking could kill most microorganisms present in the marijuana.

10 stocks we like better thanWal-MartWhen investing geniuses David and TomGardner have a stock tip, it can pay to listen. After all, the newsletter theyhave run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

David and Tomjust revealed what they believe are theten best stocksfor investors to buy right now... and Wal-Mart wasn't one of them! That's right -- theythink these 10 stocks are even better buys.

Click hereto learn about these picks!

*StockAdvisor returns as of December 12, 2016The author(s) may have a position in any stocks mentioned.

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.