THE CANNABIS CONUNDRUM

As the founder of a British pharmaceutical company puts it, if it weren't
called marijuana there would be an entire biotech business built around
this plant.

And that's just what's starting to happen (but not for the U.S. drug
industry or the American patients these medicines might help).

One night in late September, Ethan Russo stood before a classroom packed
with students on the University of Massachusetts' Amherst campus, and asked
how many of them had been through the popular secondary-school program
known as Drug Abuse Resistance Education, or DARE. Almost every hand in the
audience went up. "Just as I thought," said Russo. "Well, we're going to
hit that one head-on." He then cheerfully presented his version of what can
only be described as a drug reeducation program.

Russo is a physician specializing in child neurology and one of the world's
pioneering investigators into the therapeutic uses of pot. A slight,
preternaturally good-humored man, Russo exhibited an outsized knowledge of
his subject. Sticking strictly to the botanical name, Cannabis sativa , he
noted that the plant's effects on the mind and body were first recorded by
the ancient Assyrians in 2200 BC. These days, cannabis is used, mostly
illegally, to relieve the nausea that accompanies chemotherapy, stimulate
the appetites of AIDS sufferers, prevent blindness induced by glaucoma,
suppress migraine headaches, and reduce the pain and muscle rigidity that
accompanies multiple sclerosis.

Although nonprescription medications such as aspirin kill thousands of
people every year, not a single death has ever been attributed to a
cannabis overdose. The "therapeutic ratio" of marijuana is estimated to
fall somewhere between 20,000 and 40,000--meaning it would take that many
times a normal dose to kill you. If the drug is delivered as a pill or a
spray (smoking just about anything is bad for you, after all), then Russo
is unequivocal: "Cannabis is a safer medicine than almost all of the
standard pharmaceuticals available today."

As he spoke, Russo clicked through a dazzling slide show: verdant fields of
cannabis covering the foothills of Morocco's Rif Mountains; Thailand's
marijuana plants on steroids, taller than a NBA center.

But the most compelling slide was of a homely, quart-sized bottle labeled
"Cannabis Tincture," which seemed to symbolize this country's inconsistent
attitude toward medical marijuana.

The United States has at times embraced the cannabis plant and its
products: From the mid-19th century up until the mid-20th century, cannabis
was a mainstream medicine, listed in the U.S. pharmacopoeia. The company
that marketed the bottle of tincture was none other than Eli Lilly, the $11
billion behemoth that today is best known for another mood-altering drug,
Prozac.

More recently, of course, the U.S. government has cast cannabis as a pariah
drug. This past June, Karen Tandy, the first woman to head the Drug
Enforcement Administration, declared that marijuana "has not been shown to
have medical benefits."

Ethan Russo and a small group of trailblazing doctors, scientists, and
businesspeople hope to prove her wrong.

Russo recently signed on as a senior medical adviser to GW Pharmaceuticals,
a British biotechnology company that has conducted clinical trials of
cannabis-based medicines on people suffering from multiple sclerosis and
chronic pain. In a memorandum to the House of Lords' committee on science
and technology, GW reported that a vast major-ity of its patients have
indicated "significant alleviation" of at least one symptom, including
pain, spasticity, and bladder problems; in some cases, it said, the
improvement "has been sufficient to transform lives."

This past May, GW inked a deal with the German pharmaceutical company Bayer
Healthcare AG to market Sativex, a cannabis-laced oral spray that's used
for treating severe neuropathic pain and multiple-sclerosis symptoms.

Bayer, which agreed to market Sativex in the UK and Canada--and optioned
rights for Europe--is betting that in the next few months, the first modern
medicine made entirely of cannabis will pass muster with British
regulators. GW estimates that the European market for Sativex could total
$300 million to $400 million. "We're finding that cannabis medicines have
enormous pharmacological capabilities and a unique capacity to attack, in a
disease like MS, an entire range of symptoms," says Dr. Geoffrey Guy, GW's
founder and chairman. "If it wasn't called marijuana, by now there would
have been an entire biotech industry built around this plant."

GW's breakthroughs have put Guy in the vanguard of the aboveground
marijuana economy, a handful of pharmaceutical entrepreneurs who are racing
to build a legal market for cannabis medicines in countries that accept the
drug's therapeutic potential (read: Canada, New Zealand, Australia, and
most of western Europe). If Guy's bet pays off, GW just might become the
Eli Lilly of medical marijuana.

"Cruel Hoax" or Solid Science?

The push to develop plant-based and synthetic cannabinoid medicines has
been building since the early 1990s, when researchers identified nerve
receptors in the brain that are stimulated by marijuana's active
ingredient, THC, as well as the natural body chemical that binds to those
receptors.

The discovery of an entirely new class of brain receptors and the
neurotransmitters that act on them--the endocannabinoid system--proved to
be an astounding development, opening a whole new area of therapeutics.
Investigators believe that the system plays a critical role in mediating
pain, appetite, movement, and memory.

The giants of the drug industry, including Lilly, Merck, Pfizer, and
Schering-Plough, are now hard at work in the lab, attempting to cook up
synthetic versions of the 61 cannabinoid compounds found in marijuana
plants. These are complex molecules with 21 carbons unique to cannabis, of
which THC is the best known.

Big Pharma has high hopes for these synthetics for the treatment of
obesity, smoking, cancer pain, migraines, and MS symptoms.

But such efforts are still in the early stages of development.
Investigators believe that the system in the brain that is stimulated by
marijuana also plays a critical role in mediating pain, appetite, movement,
and memory.

At the more controversial end of the aboveground marijuana economy,
developers are using the plant itself instead of synthetic compounds. "At
least in the near future, it seems extremely unlikely that one of these
companies will come up with a single synthetic agent that's as widely
applicable as a cannabis-based medicine," says Russo. GW is taking whole
extracts from the marijuana plant and recombining them to produce drugs
that treat specific ailments.

This plant-based approach has enabled the company to develop and test
Sativex in five years, at a price tag of about $60 million.

It's a remarkable feat, considering that Big Pharma on average shells out
$800 million on a new drug and can easily devote a decade or more to animal
research and first-dose-in-man testing.

GW did minimal animal testing, taking Sativex rapidly to controlled,
double-blind human trials. "Something like 400 million people a year take
cannabis in one form or another, and yet there's never been a recorded
fatality from it," says Guy.

But you won't find any commercial development of plant-based marijuana
medicines being pursued in the United States. Andrea Barthwell, a deputy
director in the White House Office of National Drug Control Policy and
President Bush's point person on medical marijuana, says cannabis medicines
aren't compatible with modern science.

They do not constitute "a serious line of research," she says.

"The people who are advancing marijuana as a medicine are perpetuating a
cruel hoax that exploits our compassion for the sick," Barthwell says.
"They are using patients' pain and suffering in an attempt to change
America's drug control policy. Marijuana is a crude plant product that most
definitely is not a medicine."

It's a curious statement, given that it seems to reflect neither the views
of the international scientific community nor those of the government's own
regulatory agencies.

For one thing, the Food and Drug Administration is reviewing 139 new-drug
applications involving botanical research products, so plant-based
medicines certainly aren't anathema.

As for cannabis, in 1999 the Institute of Medicine, working at the behest
of the White House drug czar's office, issued a lengthy report that
assessed the scientific evidence concerning potential medical uses of
marijuana.

Its preeminent recommendation: "Research should continue into physiological
effects of synthetic and plant-derived cannabinoids."

Barthwell, however, says that marijuana hasn't been standardized for
pharmaceutical production. Nor is there any evidence, she says, that the
plant's various compounds can be reliably produced in consistent
concentrations. Clearly, she hasn't visited the world's most futuristic pot
farm.

Down on the Farm

At a secret location in southeastern England, GW Pharmaceuticals has built
what might well be the most high-tech pot palace on the planet.

Surrounded by electrified razor wire, video cameras, and motion detectors,
the greenhouse sprawls across more than an acre of land. At any one time,
more than 15,000 marijuana plants are growing under its 14-foot ceiling,
with its banks of lights. Inside is a sea of green, comprised of some of
the world's most potent strains of pot: Hindu Kush, White Widow, Skunk,
Northern Lights. Outside of the Netherlands, GW is the only commercial
organization in Europe licensed to cultivate cannabis on this scale.

GW's drug-development strategy is based on the belief that various
components of the plant work to treat specific illnesses, and it is
breeding plant strains in which different cannabinoids predominate. In
addition to its THC variety, GW is cultivating a strain that consists
almost entirely of cannabidiol, or CBD, which moderates the THC high and
possesses no psychoactive effect of its own. CBD may be useful in treating
neuropathic pain, inflammation, and central-nervous system conditions such
as epilepsy.

To date, three drugs have been tested in clinical trials: GW's high-THC
variety, high-CBD, and Sativex, which is a 50-50 mix of the two.

Geoffrey Guy's goal--to cultivate medical-grade pharmaceutical plants that
produce a specific cannabinoid--has required him to raise the art of
cannabis-breeding to a spectacular level.

Guy's CBD-producing plant strain is unique. And every one of Guy's
plants--whether it's a THC, CBD, or one of several other varieties--is
completely uniform, with absolutely no genetic variation between each plant.

In that respect, the greenhouse resembles a living factory, where the
product takes exactly 14 weeks, from planting to harvest, to move down the
assembly line.

"Our job is to find out, ahead of everyone else, what the cannabinoids do,"
says Guy. "To accomplish that, we grow into the plant the exact profile of
the chemicals we want. We control our finished product by controlling the
plant." Dressed Better Than a Banker

Geoffrey Guy is a physician and a maverick entrepreneur who has previously
launched two publicly traded pharmaceutical companies.

On one day in his office in a high-security compound south of London, he
was decked out in a double-breasted business suit, complete with a white
handkerchief peeking above the breast pocket--people in the legal-cannabis
business tend to dress better than bankers.

Guy cracks that his favorite mind-altering drug is rugby.

He claims never to have smoked anything, least of all pot: "I've brought 14
different drugs to market, and I've never taken any of those, either."

Guy might be the only man in England who has the know-how and the political
connections necessary to launch a cannabis-based pharmaceutical company and
shepherd its products through the British regulatory system.

Nineteen years ago, he founded Ethical Holdings, a pharmaceutical company
that developed morphine products, which gave him real-world experience in
winning controlled-drug licenses from Britain's Home Office. In 1990, he
founded Phytopharm, a company that specialized in developing medicines from
Chinese herbal remedies.

Starting in the mid-1990s, patient groups in the UK--particularly the
powerful Multiple Sclerosis Society--began lobbying for changes in the drug
laws that would allow sick people to receive prescribed cannabis.

Guy, who had been devouring the medical literature on marijuana, thought
that if he could get dispensation from the government, he had the
science-and-business wherewithal to develop an approved medicine from an
illegal plant.

His hunch paid off. In June of 1998, after months of meetings with Guy, the
British government granted GW the license to cultivate and supply cannabis
for research and drug development.

Still, had Guy failed to come up with an alternative to smoking cannabis,
regulators never would have allowed him to proceed.

For Sativex, GW has devised a delivery device that looks like a breath
spritzer: Patients spray the drug onto the lining of the mouth; it takes
effect within 20 to 45 minutes.

The device allows patients to determine how many doses they need to relieve
their symptoms. They tend to settle out at relatively modest levels--on
average, 8 to 10 sprays of Sativex a day--which appear to be enough to
relieve their symptoms without incurring an intoxicating effect. "These
people are suffering from a terribly debilitating disease," says Guy.
"They're just looking for a safe, efficacious medicine that will help them
get on with their lives."

For the U.S., a Missed Market?

While the United Kingdom seems to be on the verge of approving Sativex--and
countries from Canada to Australia are permitting the compassionate use of
marijuana for seriously ill people--medical marijuana research remains
mired in politics in the United States. California has established the
Center for Medicinal Cannabis Research at the University of California at
San Diego, and the National Institute on Drug Abuse has implemented a
mechanism for supplying marijuana to the center's investigators.
(Scientists outside of California who aspire to investigate medical
marijuana face a torturous regulatory approval process.) Thus far, federal
regulators have approved 14 of the center's studies. One such study is
investigating the short-term effects of cannabis on spasticity in 30 MS
patients.

Meanwhile, GW has just completed phase III clinical trials on more than
1,000 patients--the largest program of clinical research on cannabis ever.

In September, a California physician who had just returned from a two-day
conference of the International Association of Cannabis as Medicine at
Germany's University of Cologne--which brought together the world's best
minds in the field--bemoaned this country's stunted research environment.
"It is frustrating to watch the advancements in research on cannabis and
cannabinoids taking place that we here in the USA can only dream of," he
wrote in a well-circulated email. "The dark ages of medicine and science
imposed by the American disease, prohibitionism, is painfully apparent."

If Geoffrey Guy realizes his dream, Sativex will simply be the first of
many such drugs to sweep through Europe and Canada. Meanwhile, the politics
of pot insure that cannabis-based medicines will remain out of reach for
U.S. patients and the U.S. pharmaceutical industry alike.