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Bayer completes $63-billion Monsanto takeover

AFP|Updated: Jun 07, 2018, 06.58 PM IST

FRANKFURT AM MAIN: German chemicals and pharmaceuticals giant BayerNSE 0.00 % said Thursday its two-year pursuit of US-based MonsantoNSE 1.01 % was over, as the two firms signed off a $63-billion merger deal.
“Shares in the US company will no longer be traded on the New York Stock Exchange, with Bayer now the sole owner of Monsanto Company,” the German firm said in a statement.

Here’s what you need to know about the $63-billion megadeal:

– Heroin and Agent Orange –
Founded in Germany in 1863, Bayer is still best known for making aspirin. More infamously, it briefly sold heroin in the early 20th century, marketed as cough cure and morphine substitute.
During World War II, Bayer was part of a consortium called IG Farben that made the Zyklon B pesticide used in Adolf Hitler’s gas chambers.
Through a series of acquisitions over the years, Bayer has grown into a drug and chemicals behemoth.

It reported revenues of 35 billion euros ($41 billion) last year and employs nearly 100,000 people worldwide.
Monsanto meanwhile was established in St. Louis, Missouri in 1901, setting out to make saccharine.
By the 1940s, it was producing farm-oriented chemicals, including herbicide 2,4-D which, combined with another dangerous chemical, was used to make the notorious Vietnam War-era defoliant Agent Orange.
In 1976, the company launched probably its best-known product, ..the weed killer Roundup.
In the 1980s, its scientists were the first to genetically modify a plant cell. Monsanto then started buying other seed companies and began field trials of GM seeds.
It eventually developed soybean, corn, cotton and other crops engineered to be tolerant of Roundup.
Today, Monsanto boasts annual sales of some $15 billion and over 20,000 employees.

A keen suitor –
In an industry preparing for a global population surge with billions more mouths to feed, Bayer was keen to get its hands on Monsanto’s market-leading line in GM crop seeds designed to resist strong pesticides.
It was also lured by Monsanto’s data analytics business Climate Corp, believing farmers will in future rely on digital monitoring of their crops.
The tie-up comes amid a wave of consolidation in the agrochemicals industry, spurring Bayer to become a bigger player if it did not want to get left behind.
But Monsanto wasn’t easily wooed, and Bayer had to increase its offer three times before the US rival finally agreed to a deal at $128 per share in 2016.

High price to pay –
The takeover, the largest-ever by a German firm, comes at a high cost to Bayer.
As well as the eye-watering price tag, Bayer must give up much of its seeds and agrichemical business to satisfy the competition concerns of global regulators.
Those divestitures have gone to none other than Bayer’s homegrown rival BASF, making it the unexpected beneficiary of the mega-deal.
Bayer’s sacrifices mean the takeover will be less lucrative than expected, with annual savings now forecast to amount to $1.2 billion from 2022 onwards — some 300 million less than initially thought.

– Goodbye ‘Monsatan’ –
Hoping to ditch Monsanto’s toxic reputation, Bayer will drop the company’s name from its products after the takeover.
Dubbed “Monsatan” and “Mutanto”, the US firm has for decades been targeted by environmental groups, especially in Europe, who believe that GM food could be unsafe to eat.
Campaigners also abhor Monsanto’s production of glyphosate-based Roundup, which some scientists have linked to cancer.

Friends of the Earth, which has labelled the Bayer-Monsanto merger a “marriage made in hell”, said their protests will now be turned on Bayer so long as it keeps up Monsanto’s practices.

– What does this mean for farmers and consumers? –
The Bayer-Monsanto union follows last year’s merger of US companies Dow and DuPont and the tie-up between Swiss-based SyngentaNSE 0.00 % and ChemChina.
These three giant corporations now control more than two thirds of the global market for seeds and pesticides — although Bayer’s sell-offs have allowed BASF to become a sizeable fourth competitor.

While Bayer has been able to ease regulators’ worries, critics say too much power is now in the hands of just a few players, potentially pushing up prices for farmers and limiting choices.
Bayer has vowed to continue developing some of Monsanto’s most controversial activities, including the crop protection technologies it insists are needed to meet growing food demand.
It has however promised not to introduce GM crops in Europe

CONTINUE READING…

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Marijuana can be covered in pesticides, fungi, and mold — even if it’s legal

marijuana weed pot 2

There is no known lethal dose of marijuana, which means it can’t kill you. But the stuff that gets sprayed or grows organically on pot buds can.

Studies show that marijuana sampled across the US carries unsafe levels of pesticides, mold, fungi, and bacteria. Earlier this year, Colorado recalled hundreds of batches that tested positive for banned pesticides.

It’s unclear how much cannabis, whether purchased legally in a dispensary or bought from a college roommate’s cousin’s friend, is at risk. But as the industry goes mainstream, experts suggest it’s time legal weed gets quality assurance.

Educating consumers on what they’re smoking might be the first step, according to scientists at Steep Hill Labs, a leading cannabis science and technology firm in Berkeley, California.

In 2016, Reggie Gaudino, vice president of scientific operations at Steep Hill, set out on a scientific experiment. He visited three brick-and-mortar dispensaries in the Bay Area and bought at least five samples of cannabis flower from each.

In order to decide which strains to buy, he asked cashiers, called “budtenders,” for their recommendations. He also chose the strains with the highest percentage of tetrahydrocannabinol, or THC, the main psychoactive ingredient in marijuana. Many patients choose that option from the menu because they believe it will get them the most high, or give them “the most bang for their buck,” Gaudino explains.

It’s unclear if the dispensaries he visited test their products for contaminants at third-party labs — a practice that’s becoming more common as states with newly legalized cannabis roll out regulations.

When Gaudino took the samples back to the lab, he found that 70% of the samples tested positive for pesticide residues. One-third of samples would have failed pesticide regulations in the state of Oregon, which has the most sophisticated system for pesticide-testing of the seven states with fully legalized marijuana.

Fifty percent of the samples that tested positive for pesticides also contained Myclobutanil, a fungicide treatment commonly used on California grapes, almonds, and strawberries. When digested, it’s harmless. But when heated, the chemical turns into hydrogen cyanide, a gas that interferes with the body’s ability to use oxygen normally.

The central nervous system, cardiovascular system, and pulmonary system (lungs) start to fail when exposed to high concentration of the gas.

The news isn’t quite as alarming as it sounds. Donald Land, chief scientific consultant at Steep Hill, tells Business Insider that most people would not be susceptible to falling ill after inhaling a few spores.

However, someone whose immune system is weakened — like a cancer patient undergoing chemotherapy or a person infected with HIV — is much more vulnerable to infection upon inhaling contaminated cannabis. Basically, the people who stand to benefit the most from medical marijuana are also the most vulnerable.

The results of Gaudino’s study have yet to be published in a peer-reviewed journal, though Gaudino tells us a white paper is in the works. The lab plans to test an array of other marijuana products, like concentrates and oil cartridges for vaporizer pens, before publishing.

Land and Gaudino explain that, for the most part, the industry is doing the best it can to provide safe pot.

There is no framework on the federal level that dictates how cannabis should be tested or what threshold constitute a failing grade. Most growers and dispensaries in states with legalized marijuana have to hold themselves accountable for verifying the safety of their product.

Some pay third-party labs like Steep Hill to analyze their product for pesticides and contaminants, but most only want to know the THC content of a given strain, Land says. The more potent the weed, the more they can charge for it.

Fewer than 20 states offer some form of testing, according to estimate provided by Land. The states that offer the most widely available marijuana, including California, Colorado, Oregon, and Washington, have testing facilities — but they don’t all require testing, and regulations can vary on a local level.

More research is needed to understand the health concerns associated with cannabis. Marijuana remains illegal under federal law, making it difficult for scientists to acquire the funding and samples needed for study.

In the meantime, Land suggests marijuana patients and recreational users take responsibility for their health by asking their budtender to see a lab report on the strain they wish to buy. They can compare the results with Oregon’s publicly available threshold levels for safe cannabis.

Even if you can’t make out what the report means, the dispensary’s ability to provide documentation is “absolutely better than nothing,” Land says.

CONTINUE READING…

A first for the marijuana industry: A product liability lawsuit

David Kelly

For years, Brandan Flores has treated his chronic back pain with marijuana, a remedy he champions as a natural alternative to traditional medication.

But recently he heard rumblings that his drug of choice might be less wholesome than he had imagined.

"There was talk about Eagle 20," he said, "and it concerned me right away."

Eagle 20 is a fungicide used to kill mites, mildew and assorted pests that flock to plants like hops and grapes. It also contains a chemical called myclobutanil, which produces hydrogen cyanide gas when burned.

Stunned that he might be inhaling toxic fumes, Flores and fellow medicinal pot user Brandie Larrabee, a brain tumor patient, sued the grower this week, filing the first product liability lawsuit against the marijuana industry.

"I want these companies to take a step back and look at what they are putting into their products," said Flores, 24, who sued in Denver District Court. "These warehouses are getting big and really sloppy. They are adding chemicals to make things more efficient and more potent. But there are so many chemicals now that you might as well get prescription medication."

The target of the suit, LivWell Inc., owns nine pot shops in Colorado, which legalized recreational marijuana use last year. LivWell operates one of the largest grow houses in the world.

Company lawyer Dean Heizer did not respond to a request for comment. Earlier, he told the Associated Press that LivWell had stopped using Eagle 20 and that no consumer illnesses had been linked to marijuana pesticides.

In April, Colorado quarantined 60,000 pot plants from LivWell to check for Eagle 20 residue. The hold was lifted when only low levels of the chemical were found.

Afterward, LivWell owner John Lord released a statement saying laboratory tests of his plants "showed that our products are safe — as we always maintained."

Neither Flores nor Larrabee contends that the marijuana has harmed them. But they say they would have never inhaled it if they knew it could release what the lawsuit calls "poisonous hydrogen cyanide."

Their attorney, Steven Woodrow, said the growers "either knew or acted in disregard of the facts" when they sprayed the plants with Eagle 20.

"The state of Colorado has a list of approved pesticides for marijuana," he said. "This is not one of them."

Woodrow said this is the first lawsuit to challenge the marijuana industry’s grow methods. He is seeking class-action status for the suit and expects more plaintiffs to join in.

"Unless the industry cleans itself up, we can expect more lawsuits like this in the future," he said.

The action comes as the marijuana business rapidly expands across Colorado, often outpacing laws trying to regulate it. New products, new ways to get high and new strains of weed come onto the market every day.

Woodrow compared the explosion of the pot economy here to the tech startups in Silicon Valley.

"We have a burgeoning industry that is growing on a scale never attempted before," he said. "They are growing hundreds of thousands of plants indoors under lights, and now they are seeing spidery mites, fungus and other plant diseases they fear will wipe out millions of dollars of profit."

But rather than scale back, he said, companies resort to chemicals like Eagle 20 to save their crops.

"It is allowed on vegetation that is not inhaled, but it has been banned for use on plants like tobacco," Woodrow said.

The lack of any federal guidelines for growing pot underscores the continuing conundrum of an industry still considered illegal by the U.S. government.

"The problem is getting a robust regulatory system in place so that consumers have reliable government standards they can count on," said Alison Malsbury, a Seattle attorney with the Canna Law Group, which specializes in marijuana law. "The main message here is that marijuana companies can’t rely on meeting the bare minimum standards for product safety. If a consumer gets sick, they have a product liability case on their hands."

Last week, Denver health officials quarantined more plants to check for traces of unauthorized pesticides.

Flores says it all comes down to trust. He became an activist for legalized marijuana shortly after a severe car accident left him with recurring lower back pain. He found marijuana eased that pain in an organic way without lining the pockets of big drug companies.

But after the legalization of recreational marijuana in Colorado, Oregon, Alaska and Washington, he said, the pot business is starting to resemble the rest of corporate America.

"They are only interested in pumping out large quantities of the product and not in taking time to nurture it," he said. "If they are willing to compromise your health to make a profit, then I say we hit them where it hurts, in the pocketbook."

Kelly is a special correspondent.

http://www.latimes.com/nation/la-na-marijuana-lawsuit-20151008-story.html