Russian Invasion of Ukraine Part 3 of 3

Russian Invasion of Ukraine (Part 3)

Russia’s invasion of Ukraine on February 24th, 2022 spelled further disaster for the industry by disrupting the critical fertilizer supply-chains that sustain cannabis production globally. Together, Ukraine and Russia produce 28% of the NPK fertilizers (nitrogen, phosphorus and potassium) sold on the global market. The resultant sanctions placed on Russia by the United States, have, in effect, cut-off the global market from the largest exporter of fertilizers and soil nutrients. As a result, fertilizer prices have skyrocketed within the United States. Modern Farmer reported that, over the past year, the price of anhydrous ammonia rose 225%, liquid nitrogen rose 192%, and Urea rose 149%.

Huston Hoelscher, manager of the environmental sciences group and senior pest control advisor at Urban-Gro, a Colorado based cannabis cultivation facility design and engineering firm, said that without these critical fertilizers, farmers will experience lower yields and produce lower-quality products.

Furthermore, Liz Geisleman, the co-founder of Canna Consortium and acting CEO of Rocky Mountain Reagents, predicts the industry will experience supply-chain disruptions to other key inputs such as solvents and packaging. Geisleman adds that skyrocketing gasoline prices caused by US sanctions have also disrupted cannabis delivery firms, placing greater strain on the industry.

Alain Menghé à Menghé, the CEO of Lio Pharmaceuticals, adds that rising energy costs will impact more than just transportation, but also the storage and production of cannabis. Furthermore, he insists that with the war raging on, the EU will deprioritize regulatory changes for cannabis use until the conflict is settled.

Bill Gorman, the sales director at Botanical Extraction Huber USA, advises others in the industry to follow the three Ps: “Patience, Patience, and Plan B.” He recommends businesses line up secondary sources for their core materials, adding that “if you don’t do that, then you just put all your eggs in one basket.”

Lauren Fortier, the director of cultivation for Theory Wellness, a Massachusetts based marijuan company, offers a solution for domestic cannabis producers. Fortier recommends the adoption of regenerative farming techniques which ‘close the loop’ by recycling or reusing resources in as many stages of a plant’s life cycle as possible. This has allowed regenerative farmers to insulate themselves from supply-chain disruptions.

Regenerative farming techniques include, but are not limited to:

  • Capturing and reusing wastewater
  • Using eco-friendly packaging
  • Using living soil which doesn’t require additional nutrients
  • The incorporation of an integrated pest-management system through the use of specific insects, mites, and other organisms
  • Utilizing outside air in greenhouses to lower temperatures; thereby reducing energy consumption

Fortier has already deployed many of these techniques at Theory Wellness, stating, “all of the things that we use are either reused or genuinely grown on our farm or sourced locally.”

As it stands, regenerative farming techniques provide a path forward for the domestic cannabis producers, allowing them to insulate themselves from the current and potential future disruptions to supply-chains.

Part 1, ‘The History of Cannabis in Ukraine

Part 2, ‘The Legalization of Cannabis in Ukraine

The Legalization of Cannabis in Ukraine (Part 2)

The Legalization of Cannabis in Ukraine Part 2

Prior to the outbreak of the war, Ukraine’s government was pursuing cannabis legalization. In the fall of 2020, the Zelensky administration issued a study finding that two million Ukrainian cancer patients could benefit from medical cannabis since it provides a safe alternative to addictive painkillers.

In July 2021, the Ukrainian parliament voted on bill 5596 which would legalize cannabis for medical use. However, the bill failed to reach enough votes to be passed. Only 184 members voted in favor, with 33 voting against and 61 abstaining. As a result, the bill was sent back to be revised.

The Zelensky administration followed up in October 2021, holding a nation-wide poll in which over sixty percent of respondents supported cannabis legalization.

In the following December, the Commission on Narcotic Drugs, the governing body of the UN Office on Drugs & Crime, struck cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs, the international treaty which regulates drug control policy.

In January, the international rescheduling of cannabis in conjunction with popular support, led the Zelensky’s Cabinet of Ministers to introduce a bill to the Verkhovna Rada, Ukraine’s parliament, with the intent of legalizing cannabis for medical use. The bill intends to legalize herbaceous cannabis flower for use, but place the importation and distribution of cannabis under the jurisdiction of the national police. However, with the outbreak of the invasion, legalization efforts were put on the backburner.

This would begin to change on April 7th when Ukraine’s Cabinet of Ministers issued a decree legalizing certain cannabis products for medical use. This includes THC analogues such as dronabinol, which treats weight loss in AIDS patients and chemotherapy-induced vomiting and nausea; nabilone, which also treats nausea caused by chemotherapy; and nabiximols, a THC-CBD extract used in the treatment of multiple sclerosis.

This decree builds on years of progressive activism within Ukraine. Since 2005, Freedom March, a progressive drug policy advocacy group, has led demonstrations throughout Ukraine in support of legalization and to defend the rights of medical cannabis patients. Since the outbreak of the invasion, a majority of Freedom March members have engaged in resistance to the Russia invasion. Some have taken up arms to fight on the front lines, while others have provided humanitarian aid in cities under attack by Russian forces.

As part of its humanitarian mission, Freedom March launched Cannabis Stands with Ukraine, a fundraising campaign to secure donations from the global cannabis community. Freedom March has outlined two key causes to support with the money they fundraise: first, to provide shelter, food, and physical and mental recovery to children who were injured or lost their parents in the war; second, Ukraine’s medical cannabis patients who’ve experienced medication shortages due to the conflict.

“Together with our friends from the local community, we are working to find a way of providing CBD-based medication to those who need it urgently: epileptic patients and wounded soldiers above all,” says Nazarii Sovsun, a member of Freedom March. “Hopefully, this war makes it obvious to our politicians that people should have access to medical cannabis, so we are active on the legal front, as well.”

The efforts of Freedom March have not gone unnoticed by the Ukrainian government. On June 7th, Viktor Liashko, the Ukrainian Minister of Healthcare, wrote on Facebook that the Cabinet of Ministers had approved a bill to regulate “the circulation of cannabis plants for medical, industrial purposes, scientific and scientific-technical activities to create the conditions for expanding the access of patients to the necessary treatment of cancer and post-traumatic stress disorder resulting from war.”

Liashko further adds that this bill will ensure a “full cycle of cannabis-based drug production in Ukraine,” leading to the development of a domestic cannabis industry in Ukraine, rather than depending on imports.

This would be a major change within the global market. In the status quo, Ukraine’s role in the cannabis market is very limited. Ukraine does not supply any cannabis for the medical market, but rather exports hemp seeds for cultivation across Europe. If this bill were to pass, Ukraine would have “a leading position among hemp suppliers” and “would lead to the revival and development of Ukraine’s processing industry.”

Part 1, ‘The History of Cannabis in Ukraine

Part 3, ‘Russian Invasion of Ukraine

The-history of cannabis in Ukraine Part 1

The History of Cannabis in Ukraine (Part 1)

The-history of cannabis in Ukraine Part 1

With the Russian invasion of Ukraine raging on, and its subsequent disruptions to global supply-chains wreaking havoc on the cannabis industry, an investigation into the region’s history with cannabis and the war’s effects on the industry is crucial.

Cannabis has long played a pivotal role within eastern Europe. Contemporary anthropological research has found that cannabis was likely introduced into southeast Russia and Ukraine by the Scythians, an ancient group of nomadic warriors from modern day Siberia, as early as 3000 BC. Since then, cannabis has been an indispensable part of Ukrainian and Russian agriculture, providing food, clothing, medicine, textiles, and fuel. 

The versatility of cannabis, when used for industrial purposes, made it a critical commodity crop and export of the Russian Tsardom since the beginning of its mass production in the 16th century. Hemp exports remained small until the 18th century, when Great Britain began solely utilizing Russian hemp for its naval rigging. Throughout the 18th century, the percentage of Russian hemp utilized for Britain’s navy soared to 96% while total hemp exports soared to 32,000 tons. 

However, with the explosion of American cotton production in the 19th century, Britain switched from hemp to cotton, leading Russia’s exports to decline. Despite this, the Russian empire remained the largest exporter of hemp, accounting for 50-75% of its total exports. By the end of the century, the Russian empire produced 140,000 tons of hemp annually, accounting for 40% of Europe’s hemp production. 

This would remain the case after the Russian Revolution, and the Soviet Union’s rapid industrialization. During Ukraine’s period within the Soviet Union, it was one of the largest hemp manufacturers in the world. Between 1950 and 1960, Ukrainian hemp production increased over six-fold, rising from 15.3 hectares of cultivated land to 97.4 hectares. However, after the 1961 UN convention listed cannabis as a narcotic substance, hemp production began to decline. By 1970, land devoted to hemp cultivation dropped by 33%. By 1990, only 10 hectares remained.

Since then, hemp cultivation has continued to decrease every year. This is due to a litany of factors including an insufficient number of processing plants, the remoteness of those plants from hemp producers, complex regulatory policy, and the instability of prices for hemp products.

Part 2, ‘The Legalization of Cannabis in Ukraine

Part 3, ‘Russian Invasion of Ukraine