Tag Archives: British

February 26, 2019

The Impact of The Trump-Brexit Trade Deal On The Cannabis Industry

By Marguerite Arnold

For those in the cannabis industry who have missed the latest “Trump Trade Deal“- this time with the UK, don’t slumber too long before at least getting a summary update soon.

The implications of the agreement, which U.S. President Donald Trump sees as great for business (namely increasing access to the UK market for pricey U.S. pharmaceuticals) are not uniformly welcomed everywhere, and for various reasons.

President Donald J. Trump Image: Michael Vadon, Flickr

The impact, however, on the U.S. cannabis industry, and beyond that, both the Canadian and burgeoning European one, will be significant, no matter what happens with the details of Brexit. There are a number of scenarios that might play out at this point. And how they do will certainly direct the future of the cannabis industry as it develops in the UK.

The one piece of good news out of all of this is that the industry will also certainly continue to flourish no matter what- and no matter where the product comes from. Even a hard Brexit will not roll the prohibition clock back.

Brexit Might Not Happen
There is this recurrent fantasy still in the room that the status quo will be retained just because (fill in the blank), but generally motivated by facing realities caused by basic survival. Let’s indulge it for a moment, presuming that British Prime Minister Theresa May does not survive her leadership post and Parliament comes to its collective senses. All of the splits right now in both the Labour and Conservative parties over the looming disaster continue to complicate things. Failing a hard Brexit disaster, however, look for things like “customs unions” and all sorts of “exemptions” to make the entrance into the UK for European food and medicine a permanent backstop. See the just announced Belgian-based emergency supply drop and alt import routes into the UK as just one example of what is likely to develop no matter what. This will also conveniently prevent the UK from starving and running out of medicine.

In other words, the trade deal will not do much to those cannabis firms who get into the market and reach end users with highly competitive pricing and smart entry strategies. U.S. producers and Canadians importing product across the Atlantic will lose on price to both homegrown British, Irish and EU produced crop. European producers will be far more competitive than U.S. firms just because pre-negotiated drug prices are not going anywhere anytime soon in the rest of Europe.

March Madness
On the EU side of things, countries are prepping for worst case Brexit. It is, after all, just next month. Which is now less than a week away from starting. This means that anything related to ex-im, no matter the “trade deals” in place, is going to face delays, problems and paperwork of the additional kind. Inevitably. Even if it is just confused customs personnel uncertain of the new rules. Whatever those are. Or even if there are new rules and routes. Borders, even without walls, are respected at least in Europe.

Short of dedicating the new runway at Heathrow exclusively to food and drug imports of the emergency kind, however there is no way to avoid a few predictable and looming shortage crises. There is friction in other words, in every direction. Cannabis producers will not get a pass.

The Deal Is Aimed At Destroying The NHS
On the British side of the discussion, the new UK-US trade deal has not been popular since it surfaced last summer. Why? The government would either significantly water down or lose entirely the ability to pre-negotiate drug prices in bulk (and thus hold drug company profits down). That means no more “public” health care. That alone may cause social unrest. Particularly given the shrewd marketing of the Leave Campaign that promised to “save” the NHS. Perhaps the criminal inquiries into the politically dodgy social media campaigning and fundraising techniques used to trigger the entire mess will manage to do in the courts what Parliament so far refuses to face. Then again, maybe not. American cannabis producers in particular face no particular “wins” here in the current regulatory environment. Cost is still going to be an issue.

The Business Bottom Line
Beyond the morality of this (let alone Trump or Brexit beyond that) there is the business analysis of the deal. It could well be good for some American pharmaceutical companies, although that is still a big if along the other ones. People have to be able to afford their meds, particularly if the NHS (or private insurers) do not pay.

That does not count out the cannabis industry at this point. See Tilray, for starters. Also remember that the first details of this deal began to be discussed last summer – right before GW Pharmaceuticals began exporting Epidiolex into the U.S.

Cannabinoids, in other words are already in the room, and might in fact have been a figleaf gesture, President to Prime Minister, where at least in the latter case, May has now personally benefitted financially, all along. No matter what happens with Brexit. Or even if there is one. This is not the first time Trump has used the cannabis card to further political means. See the delay of Israeli cannabis to the global market for two years in exchange for moving the Israeli capital from Tel Aviv to Jerusalem just one year ago.

The U.S. and Canada Still Face Stiff EU Cannabis Competition
How well will American (or only Canadian based producers) compete with EU-produced medical cannabis? That is now a very interesting question, not only for the European-based cannabis market but that based in the UK. It is hard to imagine pharmaceutical cannabis produced in either the U.S. or Canada right now competing with that which is more locally grown. Even the big Canadian LPs have conceded to that. Canopy, let’s not forget, is growing in Spain. Tilray is in Portugal. And that by now, is just the tip of the iceberg. Not to mention, of course, that the UK just saw its first bulk import from Holland.

Bottom line, no matter how proud President Trump and the PM are over their “deal” and indeed, whether the larger disaster will actually occur to trigger it, end users also known as patients are going to look for options based on price and accessibility. And the companies who succeed here are going to have to look for ways to address that.

February 6, 2019

Canadian Companies Continue European Cannabis Moves

By Marguerite Arnold

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There is a lot of European news afoot from the big public Canadian companies between all the headlines about Israel. Namely, established cannabis companies in the market already continue to shore up their presence across multiple member EU states.

What is at stake? Establishing some kind of European foothold in an environment where licensing and production costs will not bust the bank- and what will be the first government-set, pre-negotiated bulk price for medical cannabis flower. For all the high-flying news of even hundred million-dollar (or euro) investments, right now the biggest hunt is on for ways to trigger sales figures that continue to grow steadily in the customer column.

There is also a dawning realization that prices are going to start stabilizing if not falling after the German government finalizes its selection of bid winners.

As a result of all of this, to compete against each other and streamline distribution and supply chain costs, the larger Canadian companies in the market are clearly angling to set up efficient distribution networks- even if that means buying pieces of them one country and property at a time.

How well that will work in the longer run remains to be seen- but it is a play that is starting to show up in other European developments (from the Israeli side). That said, the latest news of the big guys in the field make sense within this context, if none other.

Canopy Growth Announces UK and Polish Moves

Spectrum Cannabis, the European-based medical brand of Canopy Growth chalked two more achievements off its Euro “to do list” in January. At the beginning of the month, Spectrum announced it was preparing to enter the UK market via the creation of a joint venture with Beckley Canopy Foundation, Spectrum Biomedical.

In Poland, the company also announced the successful shipment of its high-THC whole flower “Red No.2.” The Polish government began allowing sales late last year.

Neither development however should be a surprise to those watching the strategy of either Canopy or for that matter several other public Canadian cannabis companies. Aurora, for example, announced its first successful shipment into the country on the same day that the Polish government changed the law. On the British side, the combined forces of changing the regulatory scheduling of cannabis and allowing the drug to be dispensed by prescription have certainly changed the game on some levels. Brexit is about to play havoc with most imported products, and cannabis is no exception to this.

In this sense, the challenges facing both British and Polish patients right now are also fairly analogous. Importing is the only way to get the drug to patients, and the cost of import is also prohibitively high for most. Then of course, there is actual approval beyond that, which is also a problem everywhere cannabis has become legal.

While both developments of course, are good news for the company, this does not mean that the initial going will be easy or smooth for any company, including one as skilled at strategic market entry in core countries across the continent for the last several years as Spectrum has reliably proven to be.

Green Organic Dutchman Gets Cultivation License In Denmark

TGOD has now gone where other Canadian Euro cannabis players have gone before– namely it has joined the national trial program and several other Canadian cannabis companies before it (see Spectrum Cannabis for one) in Denmark.

Why are so many public cannabis companies attracted to the tiny country? The first is that the country, like Switzerland, in fact, is not as bound by EU rules as say, Germany and France. It can “experiment” in ways that are notably different from its neighbors.

As a result of this and a change in the law that began a multiyear trial to experiment with regulation and medical efficacy, cultivation licenses are also easier to obtain than in other places. There are also other plusses to establishing a presence in the country if not the continent including a strong social care system, and a research environment that promises to produce great results on the medical efficacy discussion continent wide.

January 8, 2019

Canopy Growth Announces UK Expansion

By Marguerite Arnold

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On December 28, 2018, Canopy made the unsurprising announcement that it would begin exporting medical cannabis to the UK. The move comes shortly after the formation of Beckley Canopy, the research effort founded in partnership with the Beckley Foundation and Amanda Fielding, the woman who has continued to pioneer the field of cannabinoid research, and the announcement that Canopy will jumpstart medical trials here.

The two events are also connected, as the company will most likely start its export direct to the trials now planned and in general for research purposes as well as pharmacies, based on doctor’s orders.

Impact On The UK Market

Canopy of course, is now in a race with several other Canadian firms to establish market presence both on the trial and patient front. Tilray, Namaste and Wayland Group have all lined up to enter the market, if not having secured first patient orders. That said, entry will be slow for all, namely because of import regulations that may well still go off the cliff because of Brexit.

Intriguingly, however, the Canadians are not the only ones now in the ring. And the “Irish Question” is becoming even more of a potential source of cannabis. That became obvious in the aftermath of an announcement for additional funding and a 25% equity stake in Dublin-based Greenlight Medicines by SOL Global, a Canadian-listed company. Greenlight has already established an extensive network of not only researchers but has a reach at this point to over 1,000 pharmacies across the UK and Ireland.

Bottom line? Look for discussions on access to be fundamentally caught up in the impending, larger political discussions that are still deadlocked, with no certainty in site.And while so far at least, Scotland has remained quiet on the discussion, along with Wales and Cornwall, these are also places domestically in the UK where there could be new cultivation operations coming shortly.

Why? Wales is the “duchy” of none other than the Prince of Wales, Charles, the man who will be the next king of England. For most of his life, he has been pilloried for his ideas about alternative healthcare and organic farming. However, he also owns vast lands in Wales that support him, supported by rents, that are likely, in the near future, to switch to cannabis farming. Whatever reluctance he might have had to take the plunge, this is likely to change course with the next generation when he becomes king. Oversight of the management of all of this bounty will switch to his son, William. And this is a no-brainer, beyond of course, the fact that his sister-in-law, the Duchess of Sussex (Meghan Markle) already has a cannabis brand named after her.

Apart from this political and Royal twist, look for cannabis farming to occur in places like Cornwall, which has temperate weather brought by the Gulf Stream, a tourist economy and a desperate need, like many parts of the UK, for urban renewal. A high tech, high worth agricultural injection, in other words, is just what these parts of the country need.

Scotland, still, is an unanswered question mark, but it is unlikely that much growing will occur in the northern climes. That said, with cannabis production (of all sorts) beginning to wake up, there is no reason that the processing question will escape this part of the British Isles.That also means that calls for domestic cannabis to be grown in the UK itself could become much louder.

What Impact Will Brexit Really Have On Cannabis?

There is no way to really understand this question until the dust settles with negotiations that now have the potential to disrupt all trade between the UK and the rest of the world, including the Republic of Ireland. Ports and transportation through them are facing major disruption. Preparations for an off the cliff exit far beyond cannabis, have also been repeatedly criticized as being far too little, too late.

Bottom line? Look for discussions on access to be fundamentally caught up in the impending, larger political discussions that are still deadlocked, with no certainty in site.

That also means that calls for domestic cannabis to be grown in the UK itself could become much louder. Along with an impetus for greater reform.

Regardless, this drug, so often just below the surface of international affairs for so long, is clearly going to be in the room in larger political discussions now unfolding in the UK.

Impact On National Healthcare

British people, since the end of WWII, have had access to free healthcare thanks to the NHS. That said, after a decade of austerity, the system is now facing crisis unseen since the war. There are 100,000 doctor vacancies at the so-called “Trusts” across the UK which manage regional healthcare. Waiting times even for lifesaving operations are at an all-time high. And approvals for drugs, especially like cannabis, which fall into the territory of “special approval” across Europe are also caught in the mix.

As in other countries, in other words, while the news of exports beginning to enter the market is good for patients and the industry beyond that, it is just a start to a longer battle that is still playing out across Europe.

That said, there is another issue in the room that is also absolutely on the table and will be part of the medical cannabis conversation going forward. Digital healthcare–and of all kinds–is being touted as the solution to doctor and service shortages. Look for innovative cannatech solutions in particular that target this market in particular, in the near future.

In the meantime, the green trickle has begun. That said, given all that is at stake and on the table, there are many questions in the room about when the flood will actually take off.

December 19, 2018

First Cannabis Clinical Trials All Set In UK

By Marguerite Arnold

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Beckley Canopy Therapeutics, based in Oxford, England has raised ₤7.4 million for the purposes of cannabinoid research and drug development. The new company is a unique partnership established between Canopy Growth Corporation and the Beckley Foundation, a research institute which examines the utilization of psychotropic drugs for the treatment of physical and mental conditions.

Studies focusing on the use of cannabinoids for the treatment of opioid addiction and cancer pain will be conducted in Europe, the UK and the US.

Why Is This Significant?

Here is the first reason: the woman behind it all. Her name is Lady Amanda Feilding, Countess of Wemyss and March. Born into a landed gentry family at Beckley Park (a Tudor hunting lodge with three towers and three moats) she also has a long history of engaging and supporting scientific endeavours that use stigmatized drugs in the treatment of both intractable disease and mental illness via the use of scientific research.

In 1998, Amanda Feilding set up the Beckley Foundation, a charitable trust which initiates, directs and supports neuroscientific and clinical research into the effects of psychoactive substances. She has also co-authored over 50 scientific papers in peer-reviewed journals.

The so-called “hidden hand” behind the rebirth of psychedelic science, Fielding’s contribution to global drug policy reform has been widely acknowledged in international drug policy circles. She was named as one of the bravest men and women in the history of science in 2010 by the British Guardian.

And here is the second reason: The foundation is now partnered with Canopy Cannabis, one of the leading cannabis firms in the world, which is also working closely with Spanish opioid manufacturer Alcaliber.

In other words, this coalition is almost the mirror opposite of the approach taken by the American Sackler family, makers of Oxycontin, who have fought cannabinoids as an alternative or even transition drug in multiple state legalization campaigns. Meanwhile the death rates from overdoses have quadrupled since 1999. In 2016, opioid-related drug overdoses killed about 116 people a day (or about 42,249 for the year). It is estimated that about 11 million people in the U.S. are currently misusing or dependent on opioids.

Amanda Fielding
Image credit: Robert Funke

Beyond The Politics of The Opioid-Cannabinoid War

While opioids clearly have a role particularly in chronic pain treatment, the question now at the global scientific table is this: Are cannabinoids a substitute for longer term chronic pain management? It is a fiercely battled scientific debate that has frequently, particularly in the U.S., crossed over into political drug reform questions.

The unique partnership of Beckley and Canopy is well placed both scientifically and culturally to take on a discussion which has languished for too long in the grass of political debate and reform.

Even better, it is taking place in a country where English is the first language, but outside the U.S. and further, in a country where cannabis has now been legally reclassified as a Schedule II drug.

Do not expect, in other words, the same trials and tribulations that faced noted U.S.-based researcher Sue Sisley, to slow down research, trials or findings.

Why Is A Cultural and Scientific Reset Required?

For the past forty years, since the end of the 1970s, cannabis in particular, has been pushed into a strange scientific territory in part, because of the culture surrounding the drug. This in turn, along with the schedule I classification of cannabis, has led to not only a dearth of research, but a reluctance on the part of prescribing doctors to examine its efficacy.

In the present, this means that doctors are still (beyond insurers who demand medical evidence before approving payment) the biggest hurdles in every medical system where cannabis is becoming legal. See the debate in Canada, the UK and of course, Germany, where patients frequently report asking for a drug their doctors refuse to prescribe.

This is exactly the kind of high-placed, societally influential effort in other words, that might finally break the medical taboo at the most important remaining logjam– at the point of prescription and approval for patients.

November 21, 2018

The UK Starts Prescribing Cannabis

By Marguerite Arnold

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It is official. British doctors as of November 1, 2018, can now write prescriptions for medical cannabis. But what does that really mean? And is this truly a victory or merely an opening in the fierce resistance to and outright battle against cannabinoids as medicine?

A Real Victory Or Another Stall?

Many in the advocacy community in Europe are profoundly split. On one hand, yes, the British decision, like other sovereign medical cannabis reforms in Europe over the last two years, is a victory. The British government, like many before it, has thrown in the towel on denying basic access to medical cannabis. But what does this mean, especially in a country which may well be facing shortages of basic food products and other kinds of medications in under half a year if things continue to blow up on Brexit and there is no “people’s vote” to save the day?

Cultivated product would, normally, be slated to come from Portugal and Spain where Tilray and Canopy in particular have set up cultivation centers. If things continue to head to a negotiated Brexit, it is inevitable that imported cannabis would fall into the same category of everything else set to come into England by boat or lorry. It is highly unlikely that the NHS would authorize full payment for cannabis flown in from Canada. Especially with British Sugar’s existing cannabis plantations in Norfolk as well as the budding cultivation deals now finally flowering all over the country if not in Ireland.There are many who expect that medical cannabis will actually save public healthcare systems a great deal of money.

Brexit Is The Bigger Worry, So What About Cannabis?

It may also seem to some that access to cannabis is the least of the country’s worries. Actually this is a discussion deeply embedded in the politics and drama in London and Brussels right now. It is also at the heart of Brexit itself. Namely the propaganda associated with European divorce that ran along the lines of “saving the NHS.”

In fact, the legalization of medical use in the UK, just as it is in countries across Europe (Germany being the best and most current ongoing example) will do much to shine a light on how creaky and outdated the medical provision system really is here. Especially when it comes to approving new drugs for large numbers of people quickly. This was, ultimately the goal of public healthcare. See penicillin, not to mention most inoculation drugs or vaccines for childhood diseases (like Polio).

One of the great ironies of cannabis legalization in Europe of course is that it is also often shining a light on how far this concept, not to mention funds for proper delivery, has been allowed to lapse. There are many who expect that medical cannabis will actually save public healthcare systems a great deal of money. That is if it can finally make its way into widespread medical distribution.

And cannabis is a drug like no other. Why? Despite all the pharmacization of the plant that is going on right now as producers are being forced to produce pills and oils for the medical market, cannabinoid treatments will not be pushed so easily into “orphan” status – since whole plant products can treat a range of diseases. This is important in terms of supply and negotiated prices down the road. But in the short term, cannabis is falling into a couple of strange categories created by organized public healthcare, insurance mandates (both public and private), the demands being placed on producers in this space to act more like pharmaceutical companies, limited public spending budgets, and a changing demographic where chronic conditions treated by cannabis are a whole new ballgame. Namely patients are living longer, and not necessarily old.

So while it is all very well and good for British doctors to begin to write prescriptions for cannabis, merely having one does little good for most patients. In fact, this usually means the battle is only half won.

Why?

National Healthcare Is Still Functional In Europe

As foreign as it is to most Americans, most European countries operate more or less the same way when it comes to healthcare. First of all, all of the national systems in operation in Europe today, including the UK, were set up in the aftermath of WWII to recover from devastation most Americans, especially today, never experienced personally.

These healthcare systems were set up to first and foremost be inclusive. In other words, the default is that you are covered. 90% of populations across Europe in fact, including the UK, are covered by their national healthcare systems. “Private” health insurance actually only covers about 10% of the population and in some countries, like Germany, is mandatory once annual income rises above a certain level.

However this system is also based on a very old fashioned notion of not only medical care, but treatment of chronic conditions. Namely, that most people (the mostly well) face low prices for most drugs. Further, the people first in line to get “experimental” or “last use” drugs (as cannabis is currently categorized in Europe no matter its rescheduling in the UK), are patients in hospitals. With the exception of terminal patients, of course, that is no longer the case.

Patients in the UK can expect to face the same kinds of access problems in the UK as in Germany.That is why, for example, so many disabled people began to sue the German government last year. They could not afford treatment until their insurer approved it. Monthly supplies in legal pharmacies are running around $3,000 per month for flower. Or about 8 times the total cash budget such people have to live on (in total) on a monthly basis.

In fact, because of this huge cost, approvals for drugs like cannabis do not actually happen at the front line of the insurance approving process, but are rather kicked back to regional (often state) approvals boards. As a result, approval for the right to take the drug with some or all of the cost covered by insurance, is actually limited to a much smaller pool of people right now – namely the terminally ill in hospital care. In Germany, the only people who are automatically approved for medical cannabis once a doctor writes the prescription, are the terminally ill. For everyone else it is a crapshoot. Between 35-40% of all applications in Germany are being turned down a year and a half into medical legalization. Some patients are being told they will have to wait until next year or even 2020.

And once that prescription is actually approved? Patients in the UK can expect to face the same kinds of access problems in the UK as in Germany. Namely pharmacies do not readily stock the drug in any form.

In the meantime, patients are turning back to the black market. While the online pharmacy discussion is different in the UK than Germany, which might in fact make a huge difference for the right approvals system, most patients in the UK still face a long fight for easy and affordable access covered by public healthcare.

Disclaimer: Marguerite Arnold is now in negotiations for a pilot of her digital prescription and insurance pre-approvals and automization platform called MedPayRx in several European countries including the UK, Germany, and a few others.

November 20, 2018

Big Canadian LPs Announce Major German and EU Moves

By Marguerite Arnold

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Canopy Growth Corporation, continues to move aggressively across Europe to solidify its presence across the continent. As of the beginning of November, Canopy’s European HQ in Frankfurt announced that the company is currently eyeing additional cultivation sites in Spain, Italy and Greece.

Aphria is also making news. The producer has just announced that it is seeking EU GMP certification and its intention to buy existing German distributor CC Pharma, with distribution reach to 13,000 pharmacies. Earlier in the year, Aphria acquired German Nuuvera, a global cannabis company currently exploring opportunities in Israel and Italy beyond Germany.

But that is also not the only thing going on “in town.” Wayland Corp also has announced recently that it is going to be producing in Italy in a unique cleantech, biogas fueled facility, and even more interestingly, working with a university on high-tech absorption techniques to help standardize dosing for (at present) CBD.

The European Production Industry Is Growing At Lightning Speed

Buoyed by their experience in the Canadian market, LPs are now focusing on Europe with even more intensity as the drama over the German cultivation bid, British schedule II access (no matter what happens with Brexit), and medical cannabis reform itself unfold.

As a group, they have money and talent, but are now also aware that they are not the only game around.

Producers from the rest of the world, including South America, are increasingly eyeing the European market, frequently in combination with Canadian corporate ties (see ICC and Hexo). So are institutional investors (from the U.S. in particular). The European market represents, as a region, the first real medical market anywhere and a healthcare system set to absorb a great deal of cannabis sales.

One thing is also increasingly crystal clear. Not being in the room, especially at the top industry conferences now establishing themselves across the continent, but even more particularly in Germany, is the best way to be locked out of a highly valuable and rapidly expanding market.

September 26, 2018

Tilray Enters Both U.S. & UK Markets

By Marguerite Arnold

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Tilray has long been seen as one of the market leaders in the global cannabis space. They are strategically placed in several critical areas to continue to do well, and put up major competition for just about everyone else (including German market entry first Canopy, plus the other big players in both Canada and Europe) ever since. See Aurora, Maricann and Aphria, to name a few. On the EU front, they are also certainly giving Dutch Bedrocan (with not only existing government contracts, but a newly increased ex-im medical allowance across the open Schengen border) a run for its money. And appear to have broached a monopoly long held by GW Pharma in the UK.

But first things first. Here is a brief list of accomplishments on the corporate CV so far.In the U.S., Tilray just scored a medical trial at the University of San Diego with a pill used to treat a nerve disorder.

Long (relatively speaking) before Europe was on the map for anyone but a couple of Canadian LPs, the company was exporting to Croatia (in 2016). Even the initial hiccups in delivery (a batch arrived in broken bottles), did not stop their foreign expansion plans.

When the first German cultivation bid was due, the company also, at least according to their spokesperson in Berlin at the time, considered applying. However, by late summer last year, Tilray was actually the first to publicly tip their hands that not only were they bowing out of the German tender, but had rather decided to import to Germany from cheaper EU climes. See their production facilities in Portugal. Plus of course a mass distribution deal to German pharmacies via local distribution.

Then there is their social media presence on Leafly, which also competes with Weedmaps as both an information portal and dispensary finder in key markets (California and Canada). The German version of the website (Leafly.de), has created a reality, no matter where the server is located, of also connecting directly to patients in a market still finding its way.

Add all these elements together, and that puts the company behind it all in an unbelievably strong position to continue to gain both market access and market growth in multiple jurisdictions while carefully moving at literally the change if not bleeding edge of the law.

How much long term impact this will have, however remains to be seen. Why? The times are changing fast. And not everyone is following a policy of promotion timed around other large events (see Canadian recreational legalization and the timing of the company’s IPO).

Here is another example: the company’s most touted recent double victory, on each side of the Atlantic. Why? This is a place where cannabis companies are starting to compete. And while notable, particularly in it’s timing, is clearly indicative of the next stage in the development of the legitimate medical cannabis industry– not just Tilray.

Trials As Market Entry Tools

Medical trials in both the United States and Europe right now (including the UK for now at least), are the best way for cannabis companies to enter and gain market share. In the U.S., Tilray just scored a medical trial at the University of San Diego with a pill used to treat a nerve disorder.

Last week, Tilray also announced that they had essentially become the first Canadian LP to successfully challenge GW Pharmaceuticals on its home turf in the UK, even if for now limited to one patient application at a time. That won’t last, nor will such a tight monopoly.From a medical point of view, it is a very positive sign, at least for now.

That cross-Atlantic connection is even more interesting, however, given U.S. market entry recently for GW Pharmaceutical’s product, Epidiolex.

From a medical point of view, it is a very positive sign, at least for now. How it will end up in the future is anyone’s guess, including stock valuation.

Most advocates, of course, still hope for a medical market where patients are not restricted from deciding between the whole plant, oils or even the pharmaceutical products they choose to take.

Tilray of course is also not the only large LP engaged in medical trials. They are going on all over Europe right now (even if not as well strategically publicized). Health Canada is also committing to trials in Canada over the next five years.

However, what this very clearly demonstrates is that the global medical market is now ripe pickings for companies who approach the entire discussion from a “pharmacized” product point of view. Even if that means in Europe, and including for Tilray, entering the German and other medical markets with flower, oils and medical products.

September 11, 2018

GW Pharma’s Enormous Price for Epidiolex

By Marguerite Arnold

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In a fascinating early August conference call with Seeking Alpha, British-based GW Pharmaceuticals finally revealed their retail price point for CBD-based drug, Epidiolex, as it goes into distribution in the U.S.

The drug is designed for the treatment of certain kinds of childhood epilepsy – although not all kinds. Also notable of course, is that GW Pharma’s “other” drug for treatment of resistant epilepsy failed in late stage trials in Eastern Europe earlier this year. It also knocked off 5% of the price of the company’s stock.The company is estimating it has a potential patient pool of between 25,000- 30,000 patients in the U.S.

British Advocacy Over Access And Pricing

The ineffectiveness of GW Pharma’s drugs for many patients (along with the cost charged for them) was responsible for pre-empting the entire access discussion in the UK this year. The mother of an epileptic British child tried to import a personal store of cannabis oil (produced by Canadian LP Tilray) only to have it confiscated at the airport this summer. Her son ended up in the hospital shortly thereafter.

The national uproar this caused pushed forward the country’s new medical cannabis policy– indeed drug rescheduling is due to go into effect in October. Conveniently, right as Epidiolex goes on sale in the U.S. (where cannabis remains a Schedule I drug).

The company is estimating it has a potential patient pool of between 25,000- 30,000 patients in the U.S.

Price Tags and Politics

What is the price of Epidiolex? $32,500 per patient, per year. If that sounds high, the company insists it is pricing the drug to be “in line” with other drugs for this segment of the market.

The majority of this cost will not be picked up by private health insurers but rather the federal governmentActually, according to industry analysis, this is about 70% more than the price of one comparable drug (Onfi), and slightly more expensive than Banzel, the two competing (non-cannabinoid based) medications now available in the U.S. for this market.

Here is the other (widely unreported) kicker. The majority of this cost will not be picked up by private health insurers but rather the federal government, which is also not negotiating with GW Pharma about that high price (unlike for example what is going on in Europe and the German bid).

Why the difference?

Two reasons. The first is that Epidiolex has obtained “orphan drug” status (a medication for a disease that affects fewer than 200,000 patients in the U.S.) The second is that the majority of the insurance that will be picking up this tab is Medicaid. The patient pool will be unable to afford this. As a result, the bulk of the money will remit not from private insurance companies but rather federal taxpayers. And, unlike in say, Germany, none of this is pre-negotiated in bulk.

Co-payments are expected to range from $5 to $200 per month per patient after insurance (read: the government) picks up the tab. This essentially means that the company plans to base participation at first at least on a sliding scale, highly subsidized by a government that has yet to reschedule cannabis from a Schedule I in the U.S.

Creating, in other words, a new monopoly position for GW Pharmaceuticals in North America.

A Hypocrisy Both Patients And The Industry Should Fight

The sordid, underhanded politicking that has created this canna monster is hardly surprising given the current political environment in both the U.S. and the U.K. right now. The people who benefit the most from this development are not patients, or even everyday shareholders, not to mention the burgeoning legitimate North American cannabis industry, but in fact highly placed politicians (like British Prime Minister Theresa May). Philip May, the PM’s husband’s firm is the majority shareholder in GW Pharma. Her former drugs minister (with a strong stand against medical cannabis) is married to the managing director of British Sugar, the company that grows GW Pharma’s cannabis stock domestically.

So far, despite a domestic outcry over this in the UK (including rescheduling), there has been no political backlash in the United States over this announcement. Why not?

Look To Europe For A More Competitive Medical Market

This kind of pricing strategy is also a complete no go in just about every other market – including medical-only markets where GW Pharma already has a footprint.

For example, German health insurers are already complaining about this kind of pricing strategy for cannabis (see the Cannabis Report from one of the country’s largest insurers TK – out earlier this year). And this in an environment where the government, in fact, does negotiate a bulk rate for most of the drugs in the market. Currently most German cannabis patients are being given dronabinol, a synthetic form of THC which costs far less.

On top of this, there are also moves afoot by the German government to begin to bring the costs of medical cannabis and medicines down, dramatically. And this too will impact the market – not only in Europe, but hopefully spark a debate in every country where prices are also too high.

The currently pending German cultivation bid for medical cannabis has already set an informal “reference” price of at most 7 euros a gram (and probably will see bid competitors come in at under half that). In other words, the government wholesale price of raw, unprocessed cannabis flower if not lightly processed cannabis oil is expected to be somewhere in the neighbourhood of 3-4 euros per gram come early next year. If not, as some expect, potentially even lower than that.

Processed Cannabis Medicine vs. Whole Plant Treatment

The debate that is really raging, beyond pricing, is whether unprocessed cannabis and cannabis oil is actually “medicine.” At the moment, the status quo in the U.S. is that it is not.

GW Pharmaceuticals, in other words, a British company importing a CBD-based derivative, is the only real “medical cannabis” company in the country, per the FDA. Everyone else, at least according to this logic, is placed in the “recreational camp.” And further, hampered still, with a lack of rescheduling, that affects everyone.

If that is not an organizing issue for the American cannabis industry, still struggling with the many issues inherent in the status quo (from insurance coverage and banking to national distribution across state lines) leading up to the midterms, nothing will be.

August 27, 2018

Are Global Cannabis Markets Moving In Synch?

By Marguerite Arnold

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In American political lingo, an “October Surprise” is an event or incident that is deliberately planned to impact a political election – usually during a presidential year.

The cannabis industry, of course, is still highly political – starting with reform itself.

So what to make of the fact that over the course of the summer, three major markets have started to align in terms of timing?

Canada, Germany and The UK Moving In Synch?

None of these things were original, publicly planned or announced, of course. During July, the Canadian government finally announced the recreational market start date, the German government issued its new cannabis cultivation bid (due in October), and of course, the British government announced that they would reschedule cannabis and create more access for British patients.Canadian companies, for example, are perfectly poised to enter both markets and dominate the industry

What is in the air? And could this, in any way, be a deliberate cannabis industry power play by political forces in motion right now?

The Canadian-German Connection

Planned or not, it is certainly convenient that the much stalled German cultivation bid will now be due right at the time that the Canadian rec market goes into hyper drive. Why? The largest Canadian LPs are currently dominating the European market. These companies are also widely expected to take home the majority of the tender opportunities and are already producing and distributing across Europe.

For this reason, it is unlikely that there will be any “shortages” in the market in terms of deliverable product. However, larger Canadian cannabis companies have already announced that a certain percentage of their stock will be reserved for medical use (either at home or presumably to meet contract commitments that now stretch globally). Inefficiencies in the distribution network will be more responsible, at least in the short term, for consumer “shortages” rather than a lack of availability of qualified product.

Regardless, the connection between these two markets will generate its own interesting dynamics, particularly given the influence of both the Canadian producers and the size of the German medical space on cannabis reform as well as market entry.

The German-British Connection

Germany and the UK are connected historically, culturally, and now on the topic of cannabis reform. While it is unlikely in the short term that German-produced cannabis would end up in the UK, British grown cannabis products are available across Europe, including Germany, in the form of drugs developed by GW Pharmaceuticals.

In the future, given the interest in all things “export” in both economies, this could be a fascinating, highly competitive market space. Whether or not Brexit happens.

The British-Canadian Connection

While not much has emerged (yet) from these two commonwealth countries now embarking on the cannabis journey, it could certainly be an interesting one. This starts with the major competition GW Pharmaceuticals now faces at home from external (Canadian in particular) companies looking to expand their reach across Europe.

Whether Britain Brexits or not could also impact the pace of market development here. Particularly as cannabis supplies can be flown in (via Heathrow), or shipped via the Atlantic, thus missing the Channel crossing point and literally parking lot delays on major motorways.

Canadian cannabis companies could also decide to build production sites as the market matures in the UK.

As it emerged earlier in the year, the UK is also the world’s top cannabis exporter – ahead still of the entire Canadian export market. Do not expect this to last for long after October.

However, in one more intriguing connection between the markets, Queen Elizabeth II in the UK must sign the final authorization for the Canadian recreational market to commence. With a new focus on commonwealth economies,if Brexit occurs, cannabis could certainly shape up to be a major “commonwealth crop.”

Much like tea, for that matter.

The common language between the two countries also makes international business dealings that much easier.

But What Does This All Mean For The Industry?

The first indication of this synching phenomenon may well be simply market growth on an international level unseen so far.

Canadian companies, for example, are perfectly poised to enter both markets and dominate the industry simply because this odd calendrical synching is also very convenient for business,

British companies coming online in the aftermath of rescheduling will also be uniquely positioned, no matter the outcome of the now looming divorce agreement between the parties. Whether the first market beyond domestic consumption is either commonwealth countries or the EU (or both in a best case scenario), the British cannabis market is likely to be even more globally influential than it already is.

The German market may also, depending on the pace of patient growth and cultivation space, become the third big rival, particularly with the near religious fervour all exports are worshipped here.

In the more immediate future, Germany is actually shaping up to be the most international market. Established companies from Canada to Israel and Australia are clearly lining up to enter the market one way or the other. And all that competition is starting to predict a seriously frothy, if not expanding, market starting now with connections that stretch globally.

August 21, 2018

International Summer Cannabis Roundup

By Marguerite Arnold

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As August comes to a close, it is clear that it has been one busy quarter for market development – all over the place. Developments in the UK and Germany in particular, however, have been dramatic. In turn, this is also starting to bring other countries online – even as potential producers move in on the market and before real domestic medical reform has occurred (in countries ranging from Turkey to Spain).

And, say no more, Canada finally announced its “due date” in October.

How all three markets will move forward is also very interesting. They are all interrelated at this point, and even more intriguing, increasingly in synch.

This trend is also one advocates should take note of to push forward on further legislative and access issues going forward.

The EU looks poised to hop on the legalization train

In the future, no matter what happens with Brexit, developments in both the UK and Germany will continue to push the conversation forward in the EU, a region that is now the world’s most strategic (and globally accessible) cannabis market. Advocates, particularly in Canada and the U.S. right now, can also do much to support them.

Germany

Events here, while they may seem “slow” to outsiders, are in fact progressing – and as Cannabis Industry Journal has been reporting – quite fast even if the developments haven’t been (initially at least) quite as public. As this ‘zine wrote, breaking the news in July, the Federal German Drugs and Medical Devices Agency (BfArM) quietly posted the revised bid in July on a European tender site after refusing to confirm that it had sent out (undated) cancellation letters to previous hopefuls. Applicants for the new tender have until October 22 to respond. It is expected, given the new focus on “coalitions” that there will be many more applicants from global teams.

Even more interesting is the informal “reference price” that BfArM is appearing to set for bid respondents (7 euros per gram) and the impact of that on all pricing going forward across the continent.

german flag — Photo: Ian McWilliams, Flickr

Within a week, it also emerged that the Deutsche Borse, the organization that regulates the German stock exchanges, and working via its third party clearing arm, refused to clear any trades of any publically listed North American cannabis company that are also listed in Germany. This is an interesting development for sure – particularly now. How it will impact the biggest companies (read publicly listed Canadian LPs) is unclear, particularly because they can now raise capital via global capital markets – including the U.S.

Earlier in the summer, one of the largest public or “statutory” health insurance companies in Germany issued the “Cannabis Report.” It showed that cannabis has now moved out of “orphan drug territory” in Germany, and over 15,000 patients are now prescribed the drug. That said, over 35% of all claims are still being rejected. Most patients at this point, are also women older than 40.

The UK

It seems to be less than coincidence that the other big mover this quarter (and in fact most of the year) has been the UK. These two countries are linked by history and trade more than any other in Europe.

As of October, the country will not only reschedule cannabinoid-derived medicine to a Schedule II drug, but also allow more patients to access it. It is unclear how fast reform will come to a country in the throes of Brexit drama, but it is clear that this discussion is now finally on the table. What is also intriguing about this development is how far and fast this will open the door for other firms to compete, finally, with the monopoly enjoyed by GW Pharmaceuticals in the British Islands since 1998.

In one of the quarter’s biggest coups that stockholders loved but left the domestic industry with few illusions about the fight ahead, GW Pharmaceuticals also announced that it had managed (ahead of all U.S.-based producers and firms and even rescheduling in the U.S.) to gain U.S. federal government approval to import a CBD-based epilepsy drug (Epidiolex) into the United States from the UK and thus gain national distribution.

Canada

While it was more inevitable (and planned for) than developments in Euro markets, Canada also moved forward this quarter. There is now a set date for a recreational market start.

What is even more interesting is that the next formal “steps” in all three markets are now timed to coincide within weeks of each other in October this year.

Canadian producers of course are in the leading position to enter both German and British markets. Further their production centers now springing up all over Europe are supplying both their source markets and will be available for international distribution.