Tag Archives: Aurora

Italy Sets New Pace For Recreational Cannabis & Domestic Cultivation

By Marguerite Arnold
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The Italian Supreme Court seemed to take a page from both Israel and Thailand last year (who announced exports and reform legislation on Christmas Day 2018). In the dying days of 2019, on December 19, the court ruled in what is basically a landmark decision for not only the country but the continent, that small-scale domestic cultivation of cannabis (both of the CBD and THC kind) is legal.

Even more intriguingly, the ruling was ignored for several days in Italy before being picked up by news agencies. This in turn has apparently set off a much wider and predictable debate about the use of the plant in the country – either for medical and or recreational purposes. Many are doubtful that any legislation will pass formalizing the inevitable in the near future (one attempt has already been killed), but one can never know these days. This is an issue that perennially takes countries and politicians by surprise as populations warm quickly to the concept of medical reform.

That said, so far efforts to formalize the ruling into law have been slapped down by the center right Forza Italia Party. Further, if a right or center right coalition comes to power in Italy as widely expected, it is likely to try to overturn the court ruling legislatively which has been described at least in such circles as an “absurd verdict.”

It is important also to understand this distinction if not label and how it translates both internationally and domestically.

In Canada, reform was championed by economic liberals (who are basically centrist, globalists if not free traders) and libertarians more than any other label. However initially, reform was driven not by political campaigns but rather a national challenge to prevailing cultivation law at the supreme court. This then became the legal basis for reform legislation of both the medical and recreational kind.

In the U.S., cannabis reform is frequently championed by states’ rights advocates, who are from a European perspective, extreme right wing. Right down to opposing the federal imposition of not only civil rights but other kinds of regulatory law. Including in this space. This also includes absolute hostility to anything resembling “national” if not “single payer” federal healthcare.

The two issues obviously overlap, intersect and create many strange juxtapositions if not outright contradictions and paradoxes. And many strange bedfellows.

This disconnect of course is also what has held back a united front on passing federal reform no matter how much this has allowed recreational to now spread to 11 American states as of January 1 this year. As a result, for now and certainly for several years after the next presidential election, barring a surprise realignment of politics in the U.S., there is unlikely to be any progress on federal reform. But in the U.S., cannabis legalization is a “purple” issue. Trump, for example, still opposes any national change – although if the election is tight, look for a lot of promises from both sides.

Across the Atlantic however, what Italy’s new judicial stance on the subject means for the first time, is that there is potential for a real fight on the ground from a political grass-roots front in a socially conservative European state. This is also intriguing for another reason. Italy’s health ministry also just cancelled one of Aurora’s cultivation licenses. For all the naysayers on the significance of this development, this should not be discounted.

Kind of like a Canada or Mexico moment for the continent indeed.

Not to mention what this discussion does for the CBD discussion. Both in Italy and elsewhere.

Look Homeward Deutsch Angel

Advocates across the continent if not the UK, are of course, also watching closely. Germany in particular, tried to avoid this exact discussion three years ago, but it is unlikely that advocates at least, will let this continental victory rest. Starting with the fact that this is a debate that was firmly shut off in 2017 with the passage of the medical cannabis insurance coverage law to widespread patient frustration and huge patient issues with access ever since. Even though, in fact, Guenther Weiglein, the German patient who brought the suit, took it as far as he could legally. His right to domestic cultivation, along with the few patients who managed to avail themselves of the same right before the law changed, are no longer allowed to do so.

european union statesSo of course, beyond charging the debate in Italy, this development will also increase pressure in Germany (for starters) as well as other European countries to reconsider what so far at least has been verbotten and largely because of Germany’s lead so far.

Even in places like Holland, Denmark, Portugal, Spain and Greece, the domestic cultivation discussion has been off the table. Luxembourg, and just outside the EU, Switzerland, has not raised this prospect.

That may well change in all of these countries plus others as the clock now starts to tick down to the end of 2021.

Regardless, early predictions about the pace of change as well as the size of the markets have largely been wrong.

So, for all the intriguing possibilities, this is not a slam dunk, but certainly a strong charge down the court in the right direction.

Top International Cannabis News Stories of 2019

By Marguerite Arnold
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Cannabis as a news story and an industry moved forward again this year, albeit in a rather more halting way than the last few. The volatility of the market in fact was one of the largest stories of the year, particularly after the events of this summer.

It’s Been A Wild Ride Kind Of Year

This time last year, the world was in a tizzy over the literally billions of bucks invested into a few top Canadian cannabis companies. This year, predictions are definitely a little more sober when it comes to the future of cannabis stocks. Most of the industry has taken a major beating this fall.

That said, the current correction was in the cards for just as long. What goes up, dramatically, must come down.

That said, this is not the whole picture of the industry – not by a long shot. Reform ain’t going back. Patient numbers are climbing, albeit slowly.

Here in Europe, the first and so far biggest public tender on cannabis was finally concluded in Germany with Aurora, Aphria and the cannabis company formerly known as Wayland (ICC) winning the bid lots for domestic cultivation this spring.

The British, who waffled around all year on what kind of “animal” cannabis actually is, celebrated that anniversary late in the year with a highly limited scope of coverage by the NHS.

And Luxembourg threw down the gauntlet on “recreational” within an aggressive timeframe (by 2022) and tripling its medical cannabis training budget for doctors next year.

International Cannabis Is Growing Like…A Weed

The most interesting discussions right now are clearly emerging on the international front. Cannabis became an internationally mainstreaming commodity this year as patient numbers began to climb on the continent.

Canopy_Growth_Corporation_logoThis in turn has led to the normalization of the idea at least of an export trade in cannabis not only across Europe but globally as companies target the region. Cross border cannabis companies, in other words, are a “thing” that blossomed this year – and frequently, while sometimes financed by Canadians, called another country home.

The announcement of at least the first German wholesale reference price this year will also do wonders to start to normalize prices across not only the EU but all those hoping to export here.

That in turn will have global impact.

Regulation Is Beginning to Materialize

For those who thought that higher standards were a passing fad, the events of this year, particularly of the latter half of it have confirmed one thing for sure: Regulatory muster is here to stay.

GMPTo add to the general confusion, however, international standards on medical products and even food are absolutely in the mix as countries find that standards, measurements and production processes might be similar, but on the ground, still differ. Harmonization is a word many in the cannabis industry are hearing now, and not just in the medical space, but also the food and supplements market.

The initials “GMP” are on the lips of many this year. Not to mention another exciting development the cannabis industry from abroad did not see coming and still broadly does not understand – namely Novel Food.

The War For Reform Is Being Fought On Several Fronts

Inevitably, just as in the United States, the fights in the room right now as well as legislative gridlock are focusing on some strange nitty gritty. For example, cannabidiol (CBD) is just one cannabinoid from the plant. It is a chemical substance. Yet, suddenly, in Europe, this discussion is being bogged down in pseudo-scientific discussions in the name of public policy about whether CBD is a “new kind” of food.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Ultimately this is a discussion about regulation – whether CBD and hemp production should be regulated differently than they are right now – and whether the plant should be put in a different bucket than, say, tomatoes. Or when extracted, tomato juice.

GMP is also a very strange discussion which has still not exited the stage – mostly because of the lack of uniformity internationally between Canada and European states although that is moving in the right direction.

The last issue of course, which has been looming from the Canadian side for several years, including of course all the pesticide scandals, new regulations on the cultivation of all plants for human consumption. Even German farmers are up in arms (with a recent tractor protest in Berlin that paralyzed the city).

Cannabis is in the bullseye on all fronts.

Auld Lang Syne

If there was a theme to the industry as of this summer, it was clearly that things cannot continue as they have. The CannTrust Scandal absolutely encapsulated all that is wrong with the industry.

That said, there is every reason to believe that the most egregious scandals (or at least quite so many of them) are a passing fad. Indeed, many in the industry are in fact committed to turning over a new leaf (for the new year or just because).

The good news? There is every sign of course that it will.

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Aurora Medical Cannabis Flower Unavailable In Germany Pending Review By Authorities

By Marguerite Arnold
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For now, at least, Aurora is AWOL in German pharmacies.

Sources who did not wish to be identified from apothekes here confirmed to Cannabis Industry Journal that Aurora product was currently unavailable throughout the country. The same sources also confirmed that Aurora contacted them about the suspension.

The fallout over less than quality cannabis entering at least the Danish and German markets, as reported by CIJ repeatedly this year, continues to make waves, globally. This newest development seems to be a step up in seed to sale inspections of late as a response from governments who have to deal with normalizing cannabis laws and different standards no matter what else is going on.

That this development also comes on the heels of not only the scandals at CannTrust and Hexo (both Canadians with aspirations in the EU), but many reports on the ground from distributors and pharmacies in Germany of mouldy if not pesticide tainted cannabis ever since 2017, is also significant.

Substandard product is clearly coming from somewhere.

As CIJ also reported, this issue also appears to have flared between Holland and Poland this year right before Italy also cancelled one of Aurora’s cultivation licenses lately on the grounds of GMP compliance this fall.aurora logo

High Quality Supply Chain Issues Are In The Room

This newest development with Aurora is the first sign that German authorities at least, appear to be taking notice.

As Marijuana Business Daily is reporting, the review is of a “proprietary step” in the production process related to a method used to ensure the shelf life of flower cannabis. Aurora has stated in return, that their “products are sourced from an EU GMP certified facility and are safe to consume.”

Sourced or not from a certified facility, the devil, when it comes to EU GMP, is in the details at the source. Not to mention the product on the ground as it ages. And those particularities, on a global level, are still being worked out in a process known broadly as “harmonization.”

When it comes to the cannabis industry in particular, this is also very much in the room thanks to two large treaties with North America of late. Namely CETA, the broad trade agreement between Canada and the EU, which, among other things replaces the old MRA pharmaceutical agreement that existed previously. And of course, the EU-US MRA agreement, which came into full force this July.

As the discussion between Poland and Holland this year demonstrates clearly, one country’s definition of GMP even within the EU can differ.

Product grown and processed in a foreign third-party country, no matter the designation of the actual facility itself in this environment, is bound to get a review. Especially cannabis from Canada.

Put in context of the market itself, this is even more significant, especially given Aurora’s presence in the German market not only as provider as the holder of most of the licenses (5) awarded to three cultivators – a title won with lots of blood on the ground. Not to mention many casualties – including of course the first tender bid itself.

Will This Impact The German Cultivation Bid?

In the current environment, with Aurora announcing retreats on construction in progress just about everywhere, both in Europe and at home, this could easily also be a warning shot across the bow by German authorities.

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Photo: Ian McWilliams, Flickr

While the hijinks of the cannabis industry seem to get a wink and a nod just about everywhere else cannabis reform has come, that is not true on the ground here. Further, Germany very much is a land of laws and regulations. And the average German, no matter how much they kvetch about the same, has by now more or less accepted that medical cannabis that can help very sick people get better is ok. The issue of who should pay for it is another question. Regardless, none of the cannabis in the market here is what could be termed as “cheap.” The idea that such medicine might be of less than required medical quality is one that is, as a result, indefensible.

While nobody (so far) has come forward to the press from the patient side with proof that can be validated, there have been distributors and pharmacies discussing issues surrounding the quality of product for some time now too. None want to be quoted for this story, but the noted focus on seed to sale quality issues by all of the big producers (see Aphria of late as just one example), are clearly a response to the same.

It is also unlikely that Aurora will lose its cultivation licenses in Germany – although again, this review by the German government also may be a second look into the company’s finances and ability to build a high-class facility in the country capable of producing the five lots now required.

Their inability to service this contract seems unlikely on financial grounds, no matter how retrenched Aurora has been of late.

Given the current environment, however, the events of the last six months, and the reality on the ground, this latest inspection seems to be an almost inevitable warning shot across the bow to not only Aurora but all cannabis producers at a time when the first German cultivated medical cannabis (see ICC) is now in pharmacies.

Not to mention high quality product from other parts of the world. If the Canadians can’t cut it, the message seems to be, there are others who are now stepping into the ring who can.

What’s Going Down In The Danish Cannabis Market?

By Marguerite Arnold
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Despite the fact that the Danes are going to do something that is still verboten in Germany and many other European locales (namely allow a recreational trial), the overall bloom is off the first heady days of the cannabis rose here in Denmark.

Medical sales have stalled of late because of both supply (and in part CannTrust problems) and of course price in a market with a lot of cultivation enthusiasm, but also one which still imports its medical cannabis (although domestic production is coming online soon).

This is even more interesting of course given some ideas floating in the current Euro cannosphere – namely that Canadian funded, Danish based cultivators are or were planning on importing to both Germany and Poland this fall. In other words, low sales at home for expensive product that can be bought for less at the revived Christiana marketplace are not a market entry strategy that brings ballast to balance sheets. And while the rec market is coming (obviously), the trial is in early days yet.

Further, while the German market certainly presents an opportunity for higher priced cannabis coming out of Denmark (for now), that also will not last. And is certainly not the case in Poland.

For that reason, it is clear there is at least temporary trouble brewing in what some initially thought was going to be a European-based cannabis paradise. But that too, is so 2018.

A Few Numbers

The medical trial in Denmark is now entering the beginning of its third year as of 2020. There are, according to official estimates just over 4,000 legal patients. 34 companies have permits to cultivate cannabis, including all the usual suspects – starting with Canopy Growth, Aurora, Aphria, ICC (Wayland) and The Green Organic Dutchman, plus of course all the indie locals.

Put this in perspective and is it really any wonder why Aurora also just recently announced the halting of partly built construction in both Denmark and Canada this month?

aurora logoEspecially with problems in Poland, slower than expected legal sales in Germany and of course the disaster that is still the UK, this newest setback for the company is also not exactly unexpected. The only cannabis company, European or not, who benefitted from the recent NHS pivot on medical cannabinoids was the home-based GW Pharmaceuticals, albeit at lower negotiated prices as the total pool of patients is now increased with the new NICE guidelines.

Given all of these headwinds, even with a few export possibilities, the Danish market that supposedly offered a promised respite from the problems of the German one (certainly on the cultivation front), has run into a similar problem at point of prescription and sales.

Even Danish patient number growth is anaemic compared to Deutschland – which is, by all reports, not even close to considering a recreational trial in Berlin, Bremen or any other jurisdiction which has suggested the same.

With bulk, high-grade production coming online, there is clearly going to be a regulated cannabis market in Denmark. How the decisions about who will qualify for medical will be made in the future is another question. And one that certainly the larger producers at least, are responding to in kind.

The Winds of Change

Given the amount of compliant cannabis now in the pipeline for the continent (and not just domestically) it will be interesting to see how 2020 shapes up. However, no matter how still sluggish the numbers, another domestic cannabis market has begun to come into its own as the continent moves forward on the issue generally.

Luxembourg’s Government Triples Medical Cannabis Budget for 2020

By Marguerite Arnold
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While Luxembourg is a tiny country in the middle of Europe, it is beginning to play an outsized role in pushing all aspects of the cannabis discussion forward in the EU.

The country has steadily moved forward on integrating cannabis into the medical system. In 2018, medical cannabis was tested in a pilot project and is now available, on prescription, from a limited number of hospital pharmacies since February of this year. The program, at least from the Department of Health’s perspective, has been “very successful” so far in the words of Health Minister Etienne Schneier.

So, as a result, the next phase of the transition is going into effect. The budget for doctor training and medical cannabis purchases will be increased from €350,000 to €1.37 million next year. The drug will also be available from all pharmacies. Overall, the government has allocated a budget of €228 million for its cannabis “pilot” next year – an increase of €22m in 2019.

Canopy Growth Moves Into A Prime Position

Canopy_Growth_Corporation_logoCanopy Growth also announced last month that it has now become the exclusive supplier of medical cannabis to the country in a deal that extends through the end of 2021 (in other words presumably until recreational reform becomes legal). This is an interesting twist of events, given that Aurora announced it was the first company to import the drug into the country last year.

This is certainly a new chapter in the ongoing competition between the two Canadian companies who have, since 2017, essentially split Europe’s “first entries” between them (with the exception of Tilray in Portugal).

It also comes at a time when Aurora has just lost its third license in Italy to cultivate.

The clash of the cannatitans continues.

Why Is Luxembourg’s Cannabis Experiment So Interesting?

The increasingly strategic position of this tiny country on the cannabis discussion cannot be discounted.

aurora logoIn the summer of 2018, it was the government’s decision to change the law on medical cannabis use that preserved the ability of Germans to continue to buy cannabis stocks. Confused? The Deutsche Börse, in Frankfurt, the third largest stock exchange in the world, claimed that it could not “clear” stock purchases last summer because their clearing company, based in Luxembourg, could not close the transactions in a country where even medical cannabis was still off the table. When Luxembourg changed their law, in other words, the Deutsche Börse had to reverse course.

Since then, this tiny country has continued to challenge the cannabis discussion in the EU – also announcing that a full-boat recreational program will be enacted within the next two years (almost certainly by 2021). This aggressive timetable will also move the discussion in almost every EU regulation still on the table, and probably position the country as the only one in Europe where a fully integrated medical and recreational policy is in place. Even Holland does not cover medical cannabis these days. Dutch insurers stopped covering the drug in early 2017 – just as the German government changed its own laws.

Luxembourg, in other words, has now effectively pulled at least on par with Denmark and Germany in the cannabis discussion, with recreational now the agenda. And appears to be willing to preserve its medical program after recreational comes.

Who says size matters?

The “Colorado” Of Europe?

One of the reasons Colorado was such a strategic state in the cannabis discussion in the U.S. was undoubtedly its “purple” status – i.e. a state which politically swung both ways on a range of policy issues.

Luxembourg in fact, as the seat of the European Courts of Justice, may end up playing the same role in Europe – but on a national level.

In fact, the battle here increasingly resembles not Canada, but the U.S., as individual countries begin to tackle the cannabis question in their own way – both within and beyond the EU rubrics on the drug.

Will the United States legalize federally before the EU changes its tune? That is unknowable.

However, for the moment, the market leader in the EU to watch is undoubtedly Luxembourg, no matter its geographical size and population count.

As usual, cannabis reform enters through a crack, and widens from there. Luxembourg appears to be, if not the only crack, then certainly one of them that is turning into a decently sized crevice in the unyielding wall of blanket prohibition.

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Italian Government Cancels One of Aurora’s Licenses

By Marguerite Arnold
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Aurora has just faced a rare setback in Europe. The Italian government has cancelled one of three tender cultivation lots to supply Italian patients it granted Aurora this summer (in July).

Aurora was the only company to win the bid after other companies were disqualified.

For this reason, the high-level parliamentary attention to the bid this fall is even more interesting. Most foreign cannabis is being imported from the Netherlands and Bedrocan. While Wayland (ICC) and Canopy are in the country (Wayland has established production facilities for CBD in fact), Aurora was the only foreign Canadian cannabis company to actually win government issued, cultivation slots.

What Is Going On?

In July, Aurora won the Italian bid, beating out all other companies for all three lots.

aurora logoYet in September, the third lot, for high-level CBD medical flower, was cancelled by the Ministry of Defense which oversees cannabis importing and production, for an odd reason. Specifically, the lot was suddenly “not needed.”

As of October 31, the Minister of Health responded to parliamentarians who wondered about this administrative overrule by saying that the rejected lot (lot 3, for high-level CBD) was in fact rejected because stability studies to define the shelf life of products were not being conducted.

EU GMP Standards Are In The Room In Europe

This is not really a strange turn of events for those who have been struggling on the ground in ex-im Europe to learn the rules.

For at least the second time this year, and possibly the third, a national European government has called stability tests and the equality of EU-GMP standards into question. As Cannabis Industry Journal broke earlier this fall, the Polish government apparently called the Dutch government into question over stabilization tests (albeit for THC imports) during the February to September timeframe.

european union statesIt is still unknown if there is any connection between these two events although the timing is certainly interesting. Just as it was also interesting that both Denmark and Holland also seemed to be in sync this summer over packaging and testing issues in July.

Aurora and Bedrocan are also the two biggest players in the Polish market (although Canopy Growth as well as other international, non-Canadian cannabis companies are also making their mark).

What is surprising, in other words, is that countries all around Germany are suddenly asking questions about stability tests, but German authorities, still are notably silent.

Why might this be? Especially with German production now underway, and imports surging into the market?

Is This A Strange EU-Level CBD Recreational Play In Disguise?

There are no real answers and no company is talking – but in truth this is not a failure of any company on the ground, rather governments who set the rules. If there are any cannabis companies in the room at this point who are not in the process of mandating compliance checks including stability tests, it is the governments so far, who have let this stand.

Notably, the German government. Nobody else, it appears, is willing to play this game.

Further however, and even more interestingly, this “cancellation” also comes at a time when novel food is very much in the room in Italy. Namely, it is now a crime to produce any hemp food product without a license. There is no reason, in this environment, why a national cultivator could not also produce locally a high-quality, high-CBD product for the nascent Italian medical market.

While nobody is really clear about the details, there is one more intriguing detail in the room. The government may, in fact, allow medical cultivation now by third parties.

South American Firms Begin Exporting Cannabis To Germany

By Marguerite Arnold
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In a sign of how widely the German government is now casting its net for medical cannabis, even South America is not off the table. At the end of last month, two firms– one from Uruguay and another from Columbia- announced that they would begin importing medical cannabis of the THC and CBD kind.

Fotmer Life Sciences (from Uruguay) and Clever Leaves (Columbia) are entering a market where domestic cultivation has been on the drawing board for two years so far, but so far, brought down by lawsuits.

At present, Aphria, Aurora and Wayland are the big Canadians in front position on the German bid- but so far that is only importing. There are legal challenges against what appears to be the domestic cultivation licenses that appear so far to be unresolved. And against that backdrop, the big Canadians are also facing competition from indie German distributors now casting a wide net for product, globally.

Due to the timing of the announcement from South America and the firm involved in the import, CanSativa GmbH is clearly connected to the large gap in demand that is now developing in the German market and supply requirements. Further CanSativa is also a German firm engaged in what insiders on the ground admit is basically the only way to enter the market here right now, namely via an agreement with one of the new (and Frankfurt-based) distributors who are interested in this space.

Cannabis Central Is Not Berlin

To the great surprise of outsiders, who have long believed that Berlin is the center of all things cannabis in Germany, CanSativa is now one of quite a few firms who have not only called Frankfurt home, but have begun to put the city on the global cannabis map. That started of course with MedCann GmbH (later acquired by Canopy Growth), now with a huge new office in the center of the banking district.

However that also includes the now controversial Farmako, and several other new distributors who are setting up shop with a “Mainhatten” address.

Why Frankfurt? It has one of the best and busiest airports in the world just 20 minutes from the center of the city, and of course, it is home to the Deutsche Börse, the center of not only German, but European finance.

What Does This Announcement Mean?

For those interested now in setting sail for Europe, there is clearly a strategic path to get there, even if it means picking up stakes and setting down cultivation roots in places where there is an ex-im market. While the announcement about Latin American exports is not unexpected, it is also surprising that the very competitive young distributors now popping up in Germany, in particular, cannot find closer sources to bring cannabis into the country from.

However, it is early days yet. The Israelis are coming as of this summer. German inspectors are also on the ground in Macedonia through June, certifying the early movers in the market there to begin importing presumably just before Israel enters the global ex-im business, finally.

There will also be an uptick in firms exporting at least medical grade (GMP-certified) CBD and hemp in the direction of Europe from the United States, although at present that traffic is a trickle as firms begin to find out about the possibility.

Regardless of the source, however, the news is yet another sign that the medical market is taking root, no matter how ambiguous the numbers still are, and no matter how hard it is on the ground to obtain.

Cannabis is now, indeed, entering Europe via Germany from all over the world, and it’s only going to get hotter this year.

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German Cultivation Bid Appears To Have Three Finalists

By Marguerite Arnold
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The Frankfurt-based newspaper Handelsblatt Zeitung is reporting that three Canadian firms (actually two Canadians and a German start-up cofounded by another Canadian company) have now been selected as the first cannabis cultivation bid finalists, however insiders on the ground say that this is not necessarily a final decision.

A Berlin-based subsidiary of Wayland in Germany called Demecan, along with Aphria and Aurora have all been named as bid finalists pending a normal review period.

However, there are other complications still looming. This is far from over.

The first issuance of the bid in 2017 went down in court over a technical fault on the part of the issuing agency. The current iteration was posted last summer and saw its application moved several times because of further legal challenges.

As Peter Homburg, partner and head of the European Cannabis Group at Dentons said when contacted by Cannabis Industry Journal, “This is of course not an official announcement. I have a tendency to believe that others involved in the tender process historically may well challenge this decision.”

BfArM, the federal German agency in charge of the cannabis cultivation tender process, did not respond to a request for a comment as of press time.

The Decision Is Far From Over

Here are the basic challenges still ahead:

There is a lawsuit pending against the bid itself from applicants that has yet to be decided. The Klage (formal hearing in court) is due next week. If that does not derail the process, here are the next considerations.

While all three firms named in the bid have international reputations, there are some pending questions.

Wayland is far ahead of the other two firms in terms of production capability in the country. Their facility in eastern Germany has just been certified GMP standard – which means they are qualified to produce the quality of flower required for medical consumption. This news is also far from a surprise.

As Ben Ward, CEO of Wayland Group, commented when contacted by CIJ for a response via email: “At Wayland, we believe in meaningful partnerships, investing in Germany from day one, demonstrating a long-term commitment to the market,” says Ward. “Wayland GmbH is a German company, operated by Germans, existing in Dresden and Munich and is committed to this market. The companies awarded lots received the allocation based on a rigorous application process, not media sensation.”

Of all the Canadian firms, in fact, despite its lack of high-flying stock price, Wayland has made the most concerted effort to show its commitment to producing in Germany by a large investment of capital and expertise. Further, the firm has shown itself to be the most culturally sensitive to German culture, including hiring a female member to the board (a hot topic far from the cannabis industry). However, there are other issues looming. On the same day that Wayland issued a press release announcing its position in the bid, it also issued one announcing the merger talks with ICC had failed.

The second is that Aphria’s main cultivation center in Canada is not EU-GMP certified although they have applied for the same and now also own one of Germany’s largest distributors (with approximately a 6% market share).

Other firms not only kicked off the entire cannabis discussion in Germany, but have established GMP-compliant facilities both in Canada and across Europe, namely Canopy Growth, which was widely believed to have also applied to the second tender. However prevailing rumours about a Canadian “crop failure” in British Columbia (described by the company as a deliberate destruction of plants created by delays in the licensing process) last fall may have also played a role in the German decision.

Canopy_Growth_Corporation_logoAurora is also in interesting waters. Having distinguished itself as Canopy’s closest rival across Europe, winning significant kudos in Denmark, Italy, Poland and Luxembourg last year, the company is also clearly not “just” a medical cannabis company and apparently was refused an opportunity to go public on the Deutsche Börse last fall. The selection of the firm by BfArm for the bid in a situation where the company is on a watch list created by the stock market regulatory agency in Frankfurt is also an intriguing one. Especially given the company’s announcement of its Polish success on the same day as the decision to import was announced, and the fact that so far it is the only Canadian cannabis company to successfully import to Luxembourg.

And The Import Game Is Just Getting Hot…

The unsurprising news that the bid appears to be moving forward is actually not the hottest news in Europe right now. The reality on the ground is already shifting. Several weeks ago, a Frankfurt-based distribution start-up announced that they had successfully imported cannabis into the country from Macedonian-based Nysk Holdings via Poland.

At the International Cannabis Business Conference (ICBC) in Berlin last weekend, Australian producers (for one) were also reporting a German demand for their product that was greater than they could fill. And there were many Israelis present for what is expected to be an official opening of their import ability by the third quarter of this year.

Price Wars Are Looming

The bid itself is going to have a powerful impact on pricing in both the German and European market beyond that. It represents the first time in any country that a government has attempted to pre-negotiate prices for the drug as a narcotic beyond Israel and in this case, it will have at least regional implications.

aurora logoAt the same time, it is also clear that producers like Nysk and beyond them, Israeli and Australian firms (in particular) are actively finding ways to have their product enter the country- and further at prices that are catching the Canadians on the hop. Indeed Aurora is reporting that it actually lowered its “usual” prices to win European contracts which have been reported as being 3.2 euros a gram in Italy and 2.5 euros a gram in Luxembourg.

To put this in perspective, this is a range of about CA$3-5 a gram of flower which is also well below what Canopy (for one) has reported selling its product even to recreational users in Canada and significantly below medical export prices as reported by recent company corporate reports.

Wayland in contrast, is reporting that its production price in Germany will be at least a euro-per-gram cheaper than this. Or in other words, more in line with prices expected to be generated from both the bid itself and the cannabis now entering the country from other sources.

And of course, this is only the first of what is expected to be a series of new tenders. The original amount, itself increased in the two years the issue has been pending, is clearly not enough to even begin to meet demand as proved by the levels of competitively priced imports now entering the country.

Beyond questions about whether this time the tender will actually stand, are those now pending about new ones potentially in the offing – and not just in Germany but across Europe as cannabis continues to see a very green spring.

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British Cannabis Firms Facilitate First Bulk Shipment of Cannabis Into UK

By Marguerite Arnold
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Move over Canopy Growth! Along with Aurora, Tilray, Wayland, Namaste and everyone else trying to break into the British cannabis market with authority. Ahead of all of them, a group of innovative start-ups just imported the first legal bulk medical shipment of cannabis into the country via a new entity designed to facilitate market access for such imports called Astral Health.

Jolly good show, as those on the ground due to benefit are no doubt thinking right now even if larger competitors are left in the proverbial cannadust for at least a few months.

That said, this is a larger gulf than it might otherwise be. Let’s not forget, Brexit, or etc. is due next month as Parliament disintegrates and Prime Minister Theresa May heads to Brussels for another fruitless round of “negotiations” that everyone except the occupants of Number 10 (Downing Street, the residence and office of the British government) seem to understand have gone nowhere for two years. What that does to firms entering the market, including in the cannabis space has yet to be understood.

On the Dutch side, the export was handled by the Office of Medical Cannabis. On the British side, the medicine will be sent to directly to pharmacies.

The cannabis will go to patients who have multiple sclerosis and chronic pain.UKflag

About The Companies Involved

Astral Health is a holding company and subsidiary of European Cannabis Holdings (ECH), which also worked alongside specialist pharmaceutical importer IPS Specials and another new start-up Grow Biotech, to bring the cannabis into the country legally.

Of all of them, ECH is perhaps the best known. It is a growingly influential investment company and one of the first (and few) “local” dedicated medical cannabis funds exclusively focused on the European space. ECH shares an office with Prohibition Partners, a cannabis consultancy and the organizer of Cannabis Europa, which just held a sell-out, standing room only conference in Paris. Both groups were also founded by Rob Reid, a Director of SOL Global, a Canadian listed cannabis company which has also made strategic investments of late – notably Greenlight Cannabis in Dublin, with a reach to 1,000 pharmacies across the UK and Ireland.

Most of the companies involved on the ground on this one, in other words, are start-ups. No matter the predominance of the larger Canadian companies in the news, the European cannabis space is starting not only to flourish, but do so in a way that is local, entrepreneurial, and in this case, ahead of the much larger, deeper-pocketed companies.

Niche Providers For Tense Times

In case anyone has forgotten, the deadline for Brexit is now in everyone’s immediate gunsights if not, before March, marked on the kitchen calendar. Even if it looks now like there might be a delay until 2021 or even another “people’s vote.”

Regardless of the outcome, the interim is going to be sticky going for some time.

And of course, imported cannabis, even from Holland, and even if fitting into “regular” unique medical ex-im categories, absolutely also faces this enormity of uncertainty as well. No matter how well the new trade pact with the United States (cunningly crafted to include pharmaceuticals) goes if and when Euro trade (including pharma and cannabis) falls off the cliff. There are also indications that the “emergency Brexit” medical stockpiles and emergency import routes now underway could conveniently aid the cannabis industry from the Euro side, as drugs and other essential medical supplies will be sourced from Belgium and sent into the UK through alternate routes to avoid Brexit delays and backlogs.

Just remember as the mess continues to devolve, no matter what happens, current British PM May is in a remarkably good position to benefit. Her husband, Philip May has been highlighted before for his financial involvement in both tech and cannabis pharmaceutical firms (see both Amazon and GW Pharmaceuticals which obtained the first medical cannabis import rights into the US for its CBD-based Epidiolex last year).

That is also why niche provision is such an interesting space in general in Europe, if not even more specifically the UK at present. No matter how unfair it also is to those who do not have the money to pay for their medication out of pocket (which is also in the cards as the NHS dithers if not disintegrates a little bit more). And in Europe that discussion is very pricey. Cannabis, without either public or private health insurance coverage to offset the cost, is unbelievably expensive. In the realm, right now, of as much as $3,000 a month at point of retail (pharmacies.) Those lucky enough to obtain pre-claim coverage however, pay as little as $12 for their monthly supplies.

In the UK right now, patients can obtain medical cannabis with a Schedule II prescription. However, just as in other legalizing countries in Europe, beyond price and approval issues, doctors have been reluctant to prescribe at all, and insurance approvals are complicated. Even before Brexit, supplies were scarce.

What happens come the end of March if the proverbial sheisehits the fan? That is a very good question. It is very likely that a patchwork of care networks will develop, driven by imports and the companies, if not families and patients behind them.

Regardless of what occurs in the daily particulars of politics, in other words, supply chain issues, particularly at the last mile, promise to be problems for some time to come. Even if all the hullaballoo over Brexit disappears in a wand waive of some Parliamentary fairy who magically appears in the nick of time and sprinkles dust over every MP making everyone come to their senses before Cliff Date arrives.

The Brexit Referendum
Image: Mick Baker, Flickr

Even in Germany, the struggle between patients and pharmacies in terms of supply, and further, supply matching prescription, are far from over two years into “legalization by insurance approval.”

It is very likely, in other words, that the specialized care required for timely import of cannabis in the UK in particular – no matter where it is sourced after Brexit – will require the unique kinds of knowledge that only British- or EU-based, highly focused start-ups can bring, at least in the immediate interim. For this reason, look for a lot of innovative “service focused” start-ups to come out of the next phase of both European and post Brexit cannabis industry developments.

And, as a result, more than a few surprise market entrant hybrids increasingly founded and sourced with both European and UK partners.


Disclaimer: ECH is a sponsor of MedPayRx’s go to market pilot program.

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Aurora Cannabis Burnishes Its Medical and Recreational Game

By Marguerite Arnold
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It has been a busy couple of weeks for Aurora executives, no matter what else is going on. And all signs indicate that Aurora is not only keeping its pressure on major competitors Tilray and Canopy in particular, but playing a highly sophisticated political and global game right now.

Where the company in other words is not “winning,” Aurora is clearly establishing an effective global footprint that is ensuring that it is at least keeping pace with the speed of market development and even breaking new ground more than once recently.

The Aurora Tour Of The Global Stage In Late October

Forget what is going on in Canada for a moment, if that is possible. Global investors, certainly, in the aftermath of the post legalization glow, certainly seem to be. So are the big LPs like Aurora. They are looking elsewhere, to medical markets and to Europe, for more clarity on where the market will go.

Aurora certainly has been, even if unwittingly, caught in the middle of that conversation, in part because of where and how the company has been positioning itself lately.

Last time around, the company announced it was in the top ten finalists. This time, it is also expected to do well.That said, what Aurora is doing, like everyone else in this space right now, is playing a global game of hopscotch in terms of both raising equity and then where that capital gets spent. Aurora’s recent victories, certainly this year, indicate that it will continue to be a formidable presence in the room.

For now, however, it is clear that retail investors are suddenly cautious and institutional investors are clearly still very leery. So where does that leave Aurora?

Road Trip To Germany

CEO Cam Battley at a conference in Frankfurt
CEO Cam Battley at a conference in Frankfurt

Consider these interesting series of events. Canadian recreational reform “goes live” on October 17. Instead of sticking around Canada, however, CEO Cam Battley spoke at a recent investor road show for the Canadian public cannabis companies over the weekend of October 21-22 in Frankfurt, Germany. Three well placed, but anonymous industry sources confirmed to Cannabis Industry Journal that a meeting between all the major cannabis companies in Frankfurt over the weekend (including not only Aurora, but Wayland Corporation, Canopy, Aphria, Green Organic Dutchman and Hexo) was either planned or attempted with federal Minister of Health, Jens Spahn sometime during this period of time.

Even more interestingly, this conference had clearly been planned to coincide with the original due date of the new German cultivation bid, in which Aurora is also well positioned. Last time around, the company announced it was in the top ten finalists. This time, it is also expected to do well.

Whenever the bid finally is decided, that is.

As of October 23, the day of the IPO in New York and the day after the conference in Frankfurt concluded, news circulated that the bid had been delayed a second time, with rumours of further lawsuits swirling.

IPO In New York

That day, Tuesday October 23, Aurora announced its IPO on the NYSE, not in Frankfurt after announcing this possibility the month before. This is significant, namely because all of the cannabis companies listed here are essentially in what is known, colloquially, auf Deutsch, as being “in the dog house.” Namely, financial regulators are looking closely at listed companies’ profiles on the exchange. If a listed company is too associated with the recreational industry, trades will be barred from clearing by Clearstream, the daughter company of the Deutsche Börse and located in Luxembourg. Earlier in the summer, all of the major LPs were briefly on the restricted list.

The next day after Canadian recreational reform became reality in fact, on October 18, the Deutsche Börse made the latest in a series of comments regarding its intentions about their future decisions on the clearing of cannabis stocks. Namely, that at their discretion, they can prevent the clearing of stock purchases of a cannabis company at any time. In other words, essentially delisting the stock.

Aurora, with its ties to mainstream, “adult use” in North America, is absolutely affected by the same, certainly in the short term. Including of course, all those rumours about Coke’s interest in the company (still unconfirmed by both Aurora and Coke).aurora logo

Looking Toward Poland

Yet here is where Aurora stays interesting. Just two days after its debut on the NYSE, the company announced that Aurora would be the first external company to be allowed to import medical cannabis to Poland (to a Warsaw hospital and pain clinic). The same day, incidentally, as the Polish government announced that medical cannabis could indeed begin to be imported.

This came after a stunning move earlier in the year when the company bagged the first medical cultivation license in Italy.

Clearly, Aurora is keeping good, if not powerful, company. And that will position it well in the long run. Even if, for now, its IPO on the NYSE got off to a less than powerful start.

Why Does Aurora Stand Out?

Like all the major cannabis companies on the global stage right now, Aurora understands what it takes to get into the room (wherever and whatever that room might be) in politically and regulatorily astute ways, much like Tilray. Both companies are also very similar in how they are continuing to execute market entry and public market strategy. Tilray, it should be remembered, went public over the summer, in North America too, right around the announcement of the final recreational date in Canada.

And while Aurora is clearly playing a still retail-oriented stock market strategy, it has proved over the last 18 months that it is shaping up to be a savvy, political player on the cusp of legislative change in multiple European states so far. They are courting the much bigger game now of institutional investment globally.