Could Drug Store Giants Eventually Sell THC?
It's possible, but many hurdles remain.
Drug store giants are already establishing themselves in the CBD market. Major players, including Walgreens Boots Alliance Inc (NASDAQ:WBA), Rite Aid Corporation (NYSE:RAD) and CVS Health Corp (NYSE:CVS), entered the cannabis space in 2019. Today, an array of CBN-infused products are offered in numerous states across thousands of their stores.
Could THC be on the horizon?
That may eventually be the case for Rite Aid. In May, CEO Hayward Donigan said there were complexities to selling pot products in stores but that the company was "keeping an eye on it," according to Hemp Industry Daily.
Joshua Green, co-CEO and co-founder of cannabis healthcare tech platform Veriheal, said that as legalization and research advances, "[T]he enterprise outlook on cannabis as medicine could open a new wave of business expansion for the traditional household brands."
Still, Green and various other cannabis sources highlighted an array of hurdles that could prevent pharma retail giants from expanding into THC.
Neil Juneja, managing partner for cannabis firm Gleam Law, said if cannabis is no longer considered a medical product then drug stores would likely sell it as they do alcohol or cigarettes. He said the outcome is far more likely than seeing an ongoing large market for medical marijuana requiring a prescription or OTC-style sales.
In what could reveal Rite Aid's possible approach, Donigan noted that pharmacists had been re-certified as integrative pharmacy specialists trained in alternative therapies.
Rollout could take a decade
Green said that while regulations remain a hurdle, logistics are the more significant concern.
He calls mapping the space, from transporting products to executive partnerships, a conundrum. "You can start to envision how far out the implementation of a fully integrated legal market into general stores could be," especially when considering each integral component, Green said.
He predicts it will take 10 to 15 years before every state has cannabis readily available.
Smoke Wallin, alcohol industry veteran and chairman and CEO of hemp brand Vertical Wellness, agreed, noting that cannabis and alcohol face a similar marketplace with state-by-state regulations.
"We're still fighting about the rules of liquor and where it can be sold," he noted. "That's 75, 80 years after prohibition was repealed."
Michael Sassano, CEO of EU-focused cannabis extraction brand SOMAÍ Pharmaceuticals, reported that virtually every medium and large pharma company is looking to enter the cannabis market.
He called the UN's decision to reschedule and Jazz Pharmaceuticals PLC's (NASDAQ:JAZZ) $6 billion acquisition of GW Pharmaceuticals Plc. (OTC:GWPRF) as significant signs for the industry.
Sassano expects structural issues despite any possible federal legalization. He views federal regulations leading to the standardization of products, creating a myriad of financial and regulatory hurdles.
"Federal legalization would most likely lead to either GMP-Nutraceutical or GMP-Pharmaceutical rules, which would require a tremendous amount of capital to refit current facilities," he said.
He predicted that, at worst, a company might need a new facility to remain compliant with new regulations.
"Large multinationals are not willing to gamble on that outcome until rules are more clearly defined," Sassano added.
Like drug stores, it appears multinationals and other prominent players will continue to wait until the time is right. When that may arise remains to be seen.