Introduction: In recent research, orally administered cannabidiol (CBD) showed a relatively high incidence of somnolence in a pediatric population. Previous work has suggested that when CBD is exposed to an acidic environment, it degrades to Δ9-tetrahydrocannabinol (THC) and other psychoactive cannabinoids. To gain a better understanding of quantitative exposure, we completed an in vitro study by evaluating the formation of psychoactive cannabinoids when CBD is exposed to simulated gastric fluid (SGF).Methods: Materials included synthetic CBD, Δ8-THC, and Δ9-THC. Linearity was demonstrated for each component over the concentration range used in this study. CBD was spiked into media containing 1% sodium dodecyl sulfate (SDS). Samples were analyzed using chromatography with UV and mass spectrometry detection. An assessment time of 3 h was chosen as representative of the maximal duration of exposure to gastric fluid.Results: CBD in SGF with 1% SDS was degraded about 85% after 60 min and more than 98% at 120 min. The degradation followed first-order kinetics at a rate constant of −0.031 min−1 (R2=0.9933). The major products formed were Δ9-THC and Δ8-THC with less significant levels of other related cannabinoids. CBD in physiological buffer performed as a control did not convert to THC. Confirmation of THC formation was demonstrated by comparison of mass spectral analysis, mass identification, and retention time of Δ9-THC and Δ8-THC in the SGF samples against authentic reference standards.Conclusions: SGF converts CBD into the psychoactive components Δ9-THC and Δ8-THC. The first-order kinetics observed in this study allowed estimated levels to be calculated and indicated that the acidic environment during normal gastrointestinal transit can expose orally CBD-treated patients to levels of THC and other psychoactive cannabinoids that may exceed the threshold for a physiological response. Delivery methods that decrease the potential for formation of psychoactive cannabinoids should be explored.

The Russian GKO default crisis provides a unique window into the impact of changing default probabilities and recovery ratio assumptions on credit-sensitive sovereign bond prices. This paper introduces a joint implied parameter approach to extract both the expected recovery ratio and the default probability term structure. The methodology is applied to both Russian Federation and Republic of Argentina US dollar-denominated Eurobonds before and after the GKO crisis. For the Russian bonds, the sample paths suggest a two-phase revaluation. Shifts in default probabilities account for most of the initial price collapse. Marked decreases in the projected default recovery ratio dominate the continued Russian bond price declines. The "contagion effect" impact of the default crisis on the Argentine Eurobond market actually resembles the Russian case much more than the raw price data indicate. The crucial Argentine distinction is that investors never cut recovery value assumptions.

This paper investigates an attempted delivery squeeze in a bond futures contract traded in London. Using cash and futures trades of dealers and customers, we analyze their strategic trading behavior, price distortion, and learning in a market manipulation setting. We argue that marked differences in settlement failure penalties in the cash and futures markets create conditions that favor squeezes. We recommend that regulators require special flagging of forward term repurchase agreements on the key deliverables that span futures contract maturity dates, and that exchanges mark-to-market

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he pricing of futures contracts relative to their underlying cash assets via no-T arbitrage relations has been a subject of extensive theoretical and empirical research. Recent studies of arbitrage-enforced relative futures-cash pricing restrictions by Elton, Gruber and Rentzler (1984);and Hegde and Branch (1985) for Treasury bill futures,' and by Modest and Sundaresan (1983); Cornell and French (1983);and Figlewski (1984) for stock index futures, report varying degrees of apparently significant deviations from fair cost-of-carry pricing. These results are of both practical and academic interest. First, the failure of such elementary no-arbitrage relations suggests that systematic market inefficiencies exist? implying simple riskless strategies through which portfolio managers may improve returns. Second, these deviations from no-arbitrage relative pricing suggest that excess risk is borne by hedgers who must close out their positions prior to contract expiration.While many studies have examined the pricing restrictions implied by arbitrage activity, little attention has been given to the implications of arbitrage activity for the determination of trading volume in both cash and futures markets. In particular, necessary to uncover the hidden costs and impediments to arbitrage.