The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.
Here is a data-led, shallow dive on Chalice Farms:
Chalice Farms – Business Development Impact
Based in Oregon, this company is a retail and edibles brand in the Golden Leaf Holdings portfolio. Chalice Farms has a number of locations in the Portland area, capitalizing on an effective regional strategy.
However, 2019 was a tough year for Oregon cannabis companies. Increased competition and heavy market saturation led to plummeting prices, forcing Chalice Farms to implement layoffs last Spring. 2020 appears to show Chalice Farms doing much better than the previous year.
In addition to tightening operations, the company engaged in several new business development initiatives recently. They’ve expanded distribution of their signature fruit chews into California and Nevada. They also implemented a sales initiative called “an extended 420 celebration,” covering the month of April. All six of the company’s branded retail locations have pivoted to curbside pickup and home delivery during the coronavirus pandemic.
All of those initiatives led to a boom in earned media for Chalice Farms. They were mentioned on CNN and in Forbes, among other national news outlets. The company also improved their web activities considerably, adding keywords, backlinks and a notable increase in web traffic.
Chalice Farms ended the month of April on a high note, moving to the 11th hottest web property, according to data from Pioneer Intelligence. This continued into May; Chalice Farms claimed the #26 position on the Pioneer Index, the highest it has been to date.
As we’ve covered previously, the coronavirus pandemic has impacted the cannabis industry in the United States in a number of ways. Many states with legal medical and recreational cannabis markets have deemed those cannabis businesses essential, allowing them to remain open during statewide stay-at-home orders. Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help small businesses through the economic downturn, directing trillions of dollars to the Small Business Administration (SBA) to administer emergency loans, paycheck protection programs and other financial assistance to small businesses affected by the coronavirus pandemic.
Enter the hemp and CBD products market. Thanks to the 2018 Farm Bill, which removed cannabis containing less than 0.3% THC from the list of controlled substances, hemp and CBD companies are not exempt from the SBA’s relief efforts.
According to VICE News, The Trump Administration has handed out millions of dollars to companies that sell CBD products. When VICE News looked into some SEC filings, they found more than $4 million in federal loans that have been granted to CBD products companies.
They found three CBD companies that scored big with federal assistance:
Ever since California legalized medical use of cannabis in 1996, entrepreneurial people and people with money have been looking to turn the cannabis trade into a bonafide industry. The cannabis Green Rush has been a fast and chaotic ride as growing legalization opened myriad opportunities. It seemed for a while that pot was too big to fail.
Yet the second quarter of this year saw the majority of publicly traded cannabis companies recording double-digit losses (with 10 top cannabis stocks with a combined value of $55 billion losing an estimated $21 billion in collective value). Meanwhile, some of the industry’s most recognizable brands are under pressure to cut costs in favor of demonstrable profitability. It is clear that investors have become leery of inflated and unsustainable valuations.
But pot isstill too big to fail.
Polls show an ever-growing majority of Americans believe cannabis should be legal, and the number of states with legal weed continues to grow. The state-sanctioned market will reach nearly $13 billion in sales this year, according to BDS Analytics, with about a quarter in California, the largest, most mature legal market in the world. Total U.S. sales are on track to reach $30 billion by 2024. Legal cannabis remains the biggest investment opportunity of our times, but the Green Rush may be over. And that’s a good thing.
Get over the “green rush” mentality
From the Gold Rush to the Dot Com Boom, great opportunities have tended to create irrational mobs. Have you ever watched a group of Black Friday shoppers? In a frenzy, you often do not stop to evaluate if something is a bargain or if you even need the item. In the investment world, that type of frenzy leads to bubbles. When the Dot Com bubble burst in 2000, almost half the industry’s rising tech companies shuttered their doors, and an estimated $4-6 trillion in shareholder wealth vanished.
A similar thing is happening in cannabis.
The end of the Green Rush means we can now focus on safeguarding cannabis’ future, and not pillaging it for a quick profit.Growing legalization has created an influx of capital, but much of the early institutional money and retail investors went to Canada, where the absence of a federal prohibition allowed for a robust financial market to flourish. Canopy Growth Corp. was the first large-cap cannabis company to go public in 2016, followed by other large licensed producers or LPs. Because they are not violating U.S. laws, Canadian cannabis companies were able to uplist to the NASDAQ and NYSE as well.
American cannabis companies on the other hand – unable to freely tap capital markets at home, flooded Bay Street looking to go public on the Canadian Securities Exchange, and the rush went on hyperdrive. Soon market caps became grossly inflated, and too many cannabis companies that were barely showing profit took big gambles with other people’s money. Now, those investors are paying the price.
But a burst bubble is a good thing. It is a correction that forces companies to focus on priorities and fundamentals, and cannabis is no different. The end of the Green Rush is the start of a real industry with surviving operators becoming even stronger, less reliant on speculation and more focused on performance.
There will always be companies going public to create liquidity, and there will always be venture funding at the ready for any promising new startup. But cannabis will only survive if companies focus less on raising money and more on actually running their businesses.
Cannabis is creating unprecedented cultural and lifestyle shifts. It’s helping shape how people assess, diagnose and treat a broad span of health and wellness issues. Cannabis is helping to break the barriers of opioid addiction, and it’s even beginning to rival the alcohol industry. One out of every five beer drinkers in a Nielsen Market Insights report said they will spend less on store-bought beer due to consuming cannabis. Among the 65 percent of people who purchased over-the-counter drugs for pain relief, 35 percent said they will consider cannabis as a substitute.
The end of the Green Rush means we can now focus on safeguarding cannabis’ future, and not pillaging it for a quick profit.
On November 25th, the U.S. Food and Drug Administration (FDA) sent out warning letters to 15 different companies for “illegally selling products containing cannabidiol (CBD) in ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act).” They also published a “Consumer Update” where they express concern regarding the general safety of CBD products. The press release also states that at this time the FDA cannot say that the CBD is generally recognized as safe (GRAS). To see the list of companies that received warning letters, check out the press release here.
While the FDA is still trying to figure out how to regulate hemp and hemp-derived CBD products, they published these releases to let the public know they are working on it, according to FDA Principal Deputy Commissioner Amy Abernethy, M.D., Ph.D.:
“As we work quickly to further clarify our regulatory approach for products containing cannabis and cannabis-derived compounds like CBD, we’ll continue to monitor the marketplace and take action as needed against companies that violate the law in ways that raise a variety of public health concerns. In line with our mission to protect the public, foster innovation, and promote consumer confidence, this overarching approach regarding CBD is the same as the FDA would take for any other substance that we regulate. We remain concerned that some people wrongly think that the myriad of CBD products on the market, many of which are illegal, have been evaluated by the FDA and determined to be safe, or that trying CBD ‘can’t hurt.’ Aside from one prescription drug approved to treat two pediatric epilepsy disorders, these products have not been approved by the FDA and we want to be clear that a number of questions remain regarding CBD’s safety – including reports of products containing contaminants, such as pesticides and heavy metals – and there are real risks that need to be considered. We recognize the significant public interest in CBD and we must work together with stakeholders and industry to fill in the knowledge gaps about the science, safety and quality of many of these products.”
The Warning Letters
The warning letters sent to those 15 companies all mention a few types of violations to the FD&C Act. Those include marketing unapproved human and animal drugs, selling CBD products as dietary supplements and adding CBD as an ingredient to human and animal foods. All 15 companies are using websites, online retailers and social media in interstate commerce to market CBD products unlawfully, according to the press release.
This is not the first time the FDA has sent out warning letters to CBD companies. Previously, most of the warning letters were sent out regarding companies making unsubstantiated drug and health claims. This new round of 15 warning letters reaches beyond just unsubstantiated claims and identifies a few new areas of regulatory oversight that CBD companies should be wary of.
Of the 15 warning letters sent out, some were sent to companies that are marketing CBD products to children and infants, some were sent to companies using CBD as an ingredient in food products, some were marketed as dietary supplements and one company marketed their products for use in food-producing animals, such as chickens and cows. With this press release, the FDA is saying loud and clear that the above list of marketing strategies are currently unlawful, that is, until they finish their work in devising a regulatory framework for hemp-derived CBD products.
Updated Safety Concerns
Regarding the FDA saying they cannot deem CBD as generally recognized as safe (GRAS), they published a fact sheet titled “What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis-derived Compounds, Including CBD.” The key words there should be noted in the parentheses: And What We’re Working to Find Out. The FDA’s research is by no means over with and, if anything, has only just begun. Refer to the fact sheet to see why the FDA couldn’t say that CBD is GRAS.
In the FDA’s research, they have found a few potential health problems associated with taking CBD. During the marketing application for Epidiolex as a new drug, the only approved CBD drug on the market, the FDA identified a couple of safety risks. The first one is liver injury, which they identified in blood tests, but mentioned that it could be managed easily with medical supervision. Without medical supervision, potential liver injury due to CBD consumption could go undetected, according to the FDA.
The second health concern is drug interaction. During the new drug approval process for Epidiolex, they found that other medicines could impact the dose of CBD and vice versa. The other major health concern they have is male reproductive toxicity. The FDA says that studies in lab animals showed male reproductive toxicity, including things like decrease in testicular size, inhibition of sperm growth and development and decreased circulating testosterone. They do mention, however, that “it is not yet clear what these findings mean for human patients and the impact it could have on men (or the male children of pregnant women) who take CBD.” The fact sheet also some side effects that CBD use could produce including sleepiness, gastrointestinal distress and changes in mood.
The FDA says they are actively researching and working on learning more about the safety of CBD products. They listed a couple risks that they are looking into right now: Those include, cumulative exposure (What if you use CBD products daily for a week or a month?), special populations (effects of CBD on the elderly, pregnant or nursing women, children, etc.) and CBD in animals (safety of CBD use in pets or food-producing animals and the resulting safety of human food products like milk or eggs).
While the CBD products market could still be classified as a bit of a gray market currently, the FDA says they are working on researching it more to develop an appropriate regulatory framework. What that might look like is anyone’s guess. One thing that remains clear, however, is that the FDA will not tolerate CBD companies marketing products in ways described above. Those include making unsubstantiated health claims, marketing to children, using CBD as an ingredient in foods and marketing it as a dietary supplement.
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 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).
Why Is Luxembourg’s Cannabis Experiment So Interesting?
The increasingly strategic position of this tiny country on the cannabis discussion cannot be discounted.
In 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.
In early September, Polish authorities halted medical cannabis product registrations.
It is still unclear what this was caused by. However, in conversations with the Dutch Cannabis Agency, Cannabis Industry Journal learned the Dutch government ran into significant problems with Polish acceptance of documents in the February 2019 timeframe. Further, CIJ has also learned that several other Canadian companies had apparently been trying to target Bedrocan products in Poland with this knowledge.
Even before authorities halted the registration process, it is clear that the often cut-throat game-playing seen in Germany frequently over the last few years, has also clearly entered the room just a bit east.
Is Cannabis Really Coming to Poland?
There is a national election in late October in Poland. There is a great deal on the line.
Including, of course, not just the dreams of Polish entrepreneurial hopefuls, but all of the largest cannabis companies on the planet. Poland has been a strategic and often unheralded market for most of them over the last 18 months. Aurora in fact, even announced its first import into the country last fall when the government announced a loosening of restrictions. And as the last country to enter into the EU-US MRA Agreement, with a conservative approach to cannabis at least in government, the country is ostensibly a big blue ocean for all things canna reform.
However, since most of the big companies use Germany as their product breakpoint, the news of a product registration delay nationally means that companies already in the room with EU-recognized product just got a big break.
Even if it is only short selling as much as they can into the market until product registration finally occurs.
A new kind of German-Canadian canna blitzkrieg of Poland is about to get underway this fall – certainly of the cannabis kind, although anyone with already registered EU product (see Germany for starters) has a big competitive leg up.
Cannapolitics Are In Play Across Europe
If this is the temperature in the room already, look for more machinations over the apparently pending Polish bid – although perhaps by that point, reform will have progressed far enough in Europe to prevent the same kind of local market hijacking by those with a public company and a will to dominate the market.
That said, expect backlash too, now from frustrated advocacy patient groups tired of more government blather about widespread reform that is clearly not mapped to come their way any time soon.
Here is the inconvenient and certainly unsolved reality in the room that so far has remained unsolved.
There is zero way that even the largest companies in the room can provide enough product, local producers are on the rise, and there is clearly a building “green-vest” kind of uprising in the burgeoning industry itself. EU local and national sovereign producers are getting into the game and in a big way.
The reality is that this plant provides relief to pain of several kinds – from patients to locally starved municipal and state budgets.
Recreational Is On The Longer Term Horizon – But Major Hurdles Remain
While the largest companies have clearly been in the room shaping reform policy and in ways that are not necessarily in the best interests of the overall industry itself, let alone patients, there is the real potential for backlash right now. Particularly in Europe which has heard all the wonder stories about the economics if not other impacts of cannabis reform.
Europeans – even in the industry here – who venture to American state markets in particular, but also Canadian outlets – are very much in envy. However, most also realize that the market here will evolve differently.
That is why there are now starting to be all kinds of trials on the map – and of the recreational and medical kind.
The culture is in the middle of a massive, cannabis shift. The early market entry created by the political and economic clout of the early movers was important.
But as the world turns ever more green, local politics, and even more importantly, sovereign cannabis production and even export is increasingly a political issue in the room.
There have been many significant developments this summer in Europe that will shape the debate about reform and the legal cannabis market that trails it, for at least the next year. Here is Cannabis Industry Journal’sroundup of our biggest events and trends over the summer so far.
Medical Sales Across Europe Are Slow
In Germany, it is easy to maintain a fairly ballpark understanding of patient count. Find the number of prescriptions issued in the trade press and divide by four. Everywhere else, however, the true realization of what is going on across Europe is slowly starting to hit everyone outside producers wanting to know what is going on.Establishing territorial footprint has been what the race in Europe has been all about since mid 2016 for the Canadian LPs so far.
This is going to start to hit stock prices soon beyond the wobbles already evident in the market thanks to this summer’s breaking industry scandals (CannTrust, lawsuits in every direction) to lack of financial performance for investors (Bruce Linton’s firing from Canopy). It is becoming increasingly obvious to everyone that just because a public Canadian company issues a press release about a (cultivation, import, export or processing) “event” does not mean anything other than a slew of social media telling everyone about it. The frustration with “forward looking” statements has hit European investors big time, from the retail to the institutional kind.
Despite a lot of press releases in other words, which clearly show market penetration, there is not much else going on from the sales perspective when it comes to growing those first numbers. Establishing territorial footprint has been what the race in Europe has been all about since mid 2016 for the Canadian LPs so far.
However, from an industry, if not investor and of course, patient perspective, patient numbers are what really count. And unlike Canada, where patients remain the biggest existential threat to the industry, the same industry may not sign them up or ship to them directly in Europe. For several reasons.
Germany is still the only country in Europe with a significant patient count, and while growing, slowly, is still a group where 2/3 of patients obtain dronabinol. It should shock nobody that the most accurate patient count right now in the UK is hovering somewhere under 20. For the whole country, 9 months after the law changed. While the peculiarities of Brexit are also in the room, this is so far, compared to U.S. state markets, Canada, Israel and Germany before it, pathetic.
The Industry Says It Supports Patients…But Does It?
There are several levels to this debate which start with the still appallingly high level of price gouging in the room. 2019 and certainly this summer is a time when the Canadian companies are clearly learning that European governments negotiate for drugs in bulk. Even (and especially in the near future) this one. See the difference between the EU and the US.
The level of industry promotion vs patient access recently reached a new nadir this summer when it emerged that despite a great deal of interest, more people showed up (by far) to the week-long cannabis industry conference (European Cannabis Week in London in June) than there are legitimate patients in the UK right now.
That is about to change, but so far, industry support for trials has not materialized. When the various trials now being planned do get going, look for new battles over a couple of issues, starting with patient access to and control of their medical data.
Novel Food: The Regulation That Keeps On Giving
The issues involved in this discussion are complex, certainly by North American standards. This of course starts with the fact that there is no such regulation on the continent. But also rapidly bleeds into puncturing the amount of hot air entrepreneurialism there is in the room.
The CBD market in Europe that everyone got so excited about in investor releases, in other words, is basically dead for the time being. Yes, there are a few smart niche players weaving around the regs, but it is a full-time job.
Here is the reality: Since Christmas last year when Austria put the kabosh on all products containing the cannabinoid CBD, several major countries have weighed in on the issue. It is not going away. And it is here to stay, even after recreational.
Political Advocacy Is Stirring In Europe
Whether it is the vagaries of Brexit, the discussion across the continent about how the EU will work together, right wing populist screeds about “too much regulation” or national elections, cannabis is in the room from now until the end of at least 2021 as one of the hottest global political issues under the sun. That includes of course, a discussion about global climate change, sourcing, pricing and resource use so far unaddressed but rapidly looming.
Further, patients are still having a voice – whether it is making sure that their children obtain imported CBD, or that they can obtain their own THC prescriptions without going bankrupt or having to solicit in the black market.
Cultivation Bids Looming?
One of the surest signs yet that the German authorities at any rate, are in no mood to solve the cultivation issues still on the ground and the bid itself, is that the government just renegotiated, for the second time since last fall, the amount of medical cannabis to come over the Dutch-German border. Who is going to go next? With the Italian hybrid now done and dusted, Poland is likely to be next. And when that happens, expect a raft of similar initiatives across Europe. But probably not until then.
And in the meantime? Distributors are looking for product. The demand is clearly there. But across Europe this summer there is a clear sense that the hype machine that has been the industry’s mouthpiece is at minimum overenthusiastic about the bottom-line details behind it all.
Manufacturers of cannabis products need a program tailored to the cannabis industry that helps assure the safety of cannabis products with respect to known hazards such as pesticides, residual solvents, microbial impurities, heavy metals and mycotoxins. Deibel Cannabis Laboratories has developed a course that that will teach those manufacturing cannabis products how to manage known product safety hazards using a Hazard Analysis and Critical Control Point (HACCP) system.
HACCP has a long history of use in the food industry based on preventing potential hazards from occurring rather than reacting to issues when they arise. This program was started in the US but is globally recognized, used by food companies around the world to help produce safe products for consumers. Deibel Cannabis Laboratories applies the same prevention based system of HACCP to the creation of safe and wholesome cannabis goods whether they be edible, medicinal or topical. They also explore ways cultivators can use HACCP principles in their operation.12
Deibel Labs was founded by Dr. Robert Deibel in the 1970’s. Dr. Deibel is one of the original pioneers of HACCP, expanding the program from its original three HACCP principles to the seven principles we recognize today. Dr. Deibel developed the first “HACCP Short Course,” teaching this prevention-based program to food industry leaders in the 1970s.
According to Charles Deibel, president of Deibel Labs, this is an important step for the cannabis space. “Deibel Labs is proud to continue in our historic role as leaders in HACCP training by providing the cannabis industry with a training course developed by Deibel Labs associates who are International HACCP Alliance accredited lead instructors with years of experience in crafting and implementing HACCP plans for the food industry.”
They are launching a pilot two-day Cannabis HACCP Class to select clients at the end of January in Santa Cruz, CA. The full Cannabis HACCP course schedule for 2019 is currently in development. Accreditation by the HACCP Alliance is expected by early January, assuring that a standardized and internationally recognized training curriculum is provided by accredited instructors.
The course is forward-thinking, anticipating that sometime in the near future cannabis manufacturers will be required to control and document the safe production, handling and preparation of products according to state or even federal regulatory standards. Participants will be able to develop their own model HACCP program in an interactive group learning environment.
Understand how Prerequisite Programs provide the foundation on which HACCP programs are built including GMPs, Sanitation and Pest Control Programs
Be able to identify where and how product safety problems can occur using a Hazard Analysis that considers Biological, Chemical and Physical Hazards
Gain the skills, knowledge, and tools necessary to develop effective Critical Controls, formulate corrective actions, conduct program verification and validation activities
Learn how to document activities and maintain records
Stay tuned for more information on when the 2019 course schedule is announced and how to register.
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
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).
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.
On November 1st, the U.S. Food and Drug Administration (FDA) published a press release addressing warning letters issued to four companies. The warning letters, sent to companies marketing cannabidiol (CBD) products with therapeutic claims, cites unsubstantiated claims about their products’ ability to treat or cure cancer and other diseases.
According to the press release, the four companies that received warning letters are Greenroads Health, Natural Alchemist, That’s Natural! Marketing and Consulting, and Stanley Brothers Social Enterprises LLC. The press release called their marketing campaigns “deceptive” for “unproven treatments.” Here is the letter they sent to Greenroads Health.
“As part of the U.S. Food and Drug Administration’s ongoing efforts to protect consumers from health fraud, the agency today issued warning letters to four companies illegally selling products online that claim to prevent, diagnose, treat, or cure cancer without evidence to support these outcomes,” reads the FDA statement. “Selling these unapproved products with unsubstantiated therapeutic claims is not only a violation of the Federal Food, Drug and Cosmetic Act, but also can put patients at risk as these products have not been proven to be safe or effective.”
“CBD makes cancer cells commit ‘suicide’ without killing other cells;”
“CBD … [has] anti-proliferative properties that inhibit cell division and growth in certain types of cancer, not allowing the tumor to grow;” and
“Non-psychoactive cannabinoids like CBD (cannabidiol) may be effective in treating tumors from cancer – including breast cancer.”
“Substances that contain components of marijuana will be treated like any other products that make unproven claims to shrink cancer tumors,” says FDA Commissioner Scott Gottlieb, M.D. “We don’t let companies market products that deliberately prey on sick people with baseless claims that their substance can shrink or cure cancer and we’re not going to look the other way on enforcing these principles when it comes to marijuana-containing products. There are a growing number of effective therapies for many cancers. When people are allowed to illegally market agents that deliver no established benefit they may steer patients away from products that have proven, anti-tumor effects that could extend lives.”
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
We use tracking pixels that set your arrival time at our website, this is used as part of our anti-spam and security measures. Disabling this tracking pixel would disable some of our security measures, and is therefore considered necessary for the safe operation of the website. This tracking pixel is cleared from your system when you delete files in your history.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.