Tag Archives: European

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 20, 2019

Italian Canapar Moves On European Hemp Extraction

By Marguerite Arnold

1 Comment

Canapar SL, an Italian organic hemp producer has just announced it is breaking ground on what it is being billed as “Europe’s largest hemp processing facility.”

Located on Sicily, Canapar is already established as a manufacturer and processor of CBD oil and concentrates. On its roadmap already is to become a leader in the CBD-infused cosmetics, skincare and beauty industry with the additional benefit of bearing the “Made in Italy” imprimatur. In addition to the upscale export market of course, Italy is Europe’s fourth largest consumer of such products.

Canopy Rivers now owns 49% of the company.

Why Is This Significant?

There has been much noise made about the CBD market in Europe, which even surprised experts by the end of year when it reached a magical 1-billion-euro sales cap.

However, things are not all smooth sailing on this front, no matter how much the market exploded. With the success of CBD, in Switzerland, Spain and beyond, regulators in Europe began looking at how the entire enchilada was regulated.

CBD isolates are falling into a very strange gray territory at the present across the continent. Why? As a plant extract, extracted CBD from cannabis absolutely falls into territory ruled “novel food” in the EU. In effect, what this means is that anything with CBD distillates that do not come from hemp, now requires an expensive licensing process to prove they are not harmful. In places like the UK, Spain and Austria, this became so contentious that police raided Spanish stores over health food products. The UK is now requiring tighter licensing and labelling for these products. Last December, the Austrians banned the entire industry. Take that, Switzerland!

CBD distillate made from hemp, however, seems, for now, to have survived this battle, which is why the strategic investment of Canopy last December was also so intriguingly timed. Why? It appears to be the loophole in the EU in which CBD producers will have to hang their hats until the broader CBD question is answered satisfactorily at both the UN and EU level.

Producing hemp distillate on the Italian island of Sicily also represents an interesting step for the entire cannabis industry as it develops in the country. There have been many efforts to legalize cannabis because this will then end the direct involvement of the Mafia. Perhaps the multi million investment from Canopy will be enough foreign capital to start to do the trick if not turn the tide.

But Won’t CBD Just Be “Rescheduled” By the UN?

There are many reasons why this is a strategic move for Canopy (if not producers moving in similar waters). Yes, CBD is likely to be descheduled by the UN at some point in the near future, but this still will not solve the larger question of “novel food” issues until the EU formally issues regulations on the same. Until then, EU will be a state by state hop for CBD, much as the United States has been so far. And will be, until that debate is settled across the EU at least, sourced from hemp.

With Italian food products export just behind things like cosmetics, Canapar is clearly moving into strategic and potentially highly lucrative territory.

February 13, 2019

Wayland Group’s GMP Certification Begins To Clarify German Cultivation Scenarios

By Marguerite Arnold

No Comments

Wayland Group just announced that they received GMP (good manufacturing practices) and GDP (good distribution practices) certification for their Ebersbach facility near Dresden, Germany. The plant already produced 2,400 kg of CBD isolate last year.

The certifications give Wayland the right to sell directly into German and other EU markets, and more significantly, the ability to store bulk product domestically.They have, by far, the largest cultivation site now legal in the country, with distribution to not only German pharmacies, but Europe beyond that.

Wayland is also widely believed to have applied for the much-stalled German cultivation bid. With per-gram production prices at Ebersbach cited at 1.34 euros, this certainly also sends an interesting message about who might win what in the bid, and where the price of cannabis might be headed.

Currently, cannabis is being sold to pharmacies in Germany at prices almost twice the retail price per gram in Canada. In turn, this means that the “retail” price of floss (flower) is running much higher than it is in more established markets (read Canada and of course the U.S.). Point of sale prices in Germany, for example, run between $2-3,000 per month per user. That is an era that is clearly also now coming to an end.

The Cultivation Bid

With the news of Wayland’s certifications, comes an almost certainty that they will become finalists in the pending cultivation bid in Germany. Why? They have, by far, the largest cultivation site now legal in the country, with distribution to not only German pharmacies, but Europe beyond that.

If Bedrocan was the incumbent favorite to win the majority of the licenses handed out to any one firm (especially given the recent increase in cannabis allowed to be sold into Germany across the Dutch border), this places Wayland in a strong second. If Bedrocan is not involved in the bid, this news might indicate that Wayland might be the largest winner in German cultivation licenses this time around.

The plot indeed thickens.

Prices: In General, Across Europe

The firm will be providing product, no matter what the outcome of the bid, at a production price, which is in line with the widely estimated requirements of the bid itself. Winning firms must also be able to provide pricing that is competitive to each other. It is unclear where the government will set that floor, but all medical cannabis sold in Germany after that, will then be competing with that price.

Could it be that the reference price of cannabis, in other words, has just been indirectly announced with the Wayland certifications?

Then there is this wrinkle. Given that production in Germany is more expensive than other countries in Europe (see Portugal, Spain and Greece in particular), the difference in labor costs may still outweigh the costs of shipping across the continent. Or, as the market gets going, it may not. Regardless, in a country like Germany where drug prices are routinely pre-negotiated in bulk by the government, cannabis prices will start to be regulated in a way they have not in other places, notably Canada. This means that heady visions of “mark-ups” to meet a so far unmet demand are also probably not in the cards, although government supported cannabis exports might be.

Insurance “Brands” And Bulk Buys Ahead?

Then there is this intriguing wrinkle. German “public” insurance patients (in other words 90% of the population) are not always free to choose the products they use. Why not? Beyond bulk purchases by the government, insurance companies are also allowed to enter into bulk contracts with some providers, namely medical equipment manufacturers. This is sort of the same situation as visiting an “in network” provider in the United States. In other words, the equipment is free (or vastly cheaper) to the patient if the selected brand is chosen.

Could cannabis go the same route?

german flag — Photo: Ian McWilliams, Flickr

At this juncture, that is unclear. Dronabinol, the only widely available source of cannabinoids in the country until 2016, is considered more of a generic than “name brand.” So far, neither it nor Sativex were pre-negotiated drugs. This was also for a very simple reason. There were only 800 registered patients in Germany until that year. That is far under the “orphan drug” category, which in Germany is 10,000 people. At this point, there are already much higher patient numbers (some cite as many as 79,000), with the majority of treatment going to patients with chronic pain.

By definition, this means that cannabis prices here will continue to be negotiated with little room for high mark-ups as the market consolidates. The more patients there are, the more attention will be paid to ensuring that the drug becomes affordable- not just to patients, but also insurers.

There is zero chance that the government will allow German public healthcare to be bankrupted over this still stigmatized plant, no matter how medically efficacious it is.

Germany and Israel at this point, have the longest established insurance mandate for cannabis- and in the German situation, this is now just two years old. The British NHS just announced that cannabis would be covered, with Luxembourg and Poland now also in the mix. However, the place of the insurance community in this debate is also a factor to be considered into the entire conversation as it unfolds here, beyond efficacy.

Dutch insurers in fact, stopped covering the drug almost as soon as Germany announced its own experiment.

It is unlikely that Wayland is unaware of such realities. The company has former executives from AOK on its German board. AOK is one of the largest statutory health insurers in Germany and one on the front line of cannabis reimbursements for the last two years.

February 7, 2019

WHO Makes Noise About Cannabis “Rescheduling”

By Marguerite Arnold

No Comments

At this point in the end of prohibition, not even the United Nations (UN) or the World Health Organization (WHO) are immune to the great green wave sweeping the planet. Yet, lest anyone get too optimistic about developments at the nose bleed level of international drug reform, the newest round of headlines regarding “WHO cannabis reform” is hardly cause for celebration.

The Story At The International Level So Far

In documents obtained by Cannabis Industry Journal last fall, it appeared that cannabis reform of the serious kind had caught the eye of senior leaders at the WHO. Further, it also appeared that some kind of decisive action or declaration would be forthcoming by the end of the year.

Yet as reported at the end of January, such decisions appear to be headed for a tortoise speed approvals track. Yes, it appears that CBD will probably be descheduled, and from both the hemp and cannabis perspective. That should be good news to many who are caught in a raft of international standards that are confusing and all over the place on a country-by-country level. However, this will not be much of a boon to the industry in Europe, in particular, where the discussion is less over CBD but the source of it, and how distillates are used. From this perspective, the draft WHO documents will make no difference, except perhaps to speed the acceptance of CBD, and create clearer regulations around it.

On the THC front, the WHO appears to do nothing more than move cannabis squarely into international Schedule I territory. More interesting of course, is the intent of international regulators to keep cannabis very much in uncertain status while moving “pharmacized” versions of the same into Schedule III designation.

What Does The Opinion of The WHO Really Mean?

What this means is also still unclear except that those who want to sell to regulated medical and nonmedical markets have to get their products (whatever those are) registered as medicine or a legitimate consumer product in every jurisdiction and eventually at a regional level (see Europe). That is clearly underway right now by both the big Canadian and emerging Israeli entities in the market as well as savvy European players in both verticals. That said, it is also a game that is about to create a very interesting market for those who are able to produce cheap, but high-grade oils in particular.

What Does This Mean For The Future Of Flower?

On the medical front, Germany became the third country in the world to consider reimbursing flower via national healthcare. Of the three who have tried it to date so far (and it is unclear what Poland will do at this point longer term), Israel is inching away and Holland nixed the entire cannabis covered by insurance conversation at the same time Germany took it on. Where that plays out across Europe will be interesting, especially as the cost of production and end retail cost continues to drop. And doctor education includes information about “whole plant” vs. pre-prescribed “dosing” where the patient has no control. The reality in the room in Europe right now is that this drug is being used to treat people with drug resistant conditions. Dosing dramas in other words, will be in the room here for some time to come as they have in no other jurisdiction.

Beyond dosing and control issues that have as much to do with doctors as overall reform, flower is still controversial for other reasons. One, it is currently still being imported into Europe from highly remote and expensive import destinations. That will probably change this year because of both the cultivation bid and Israel’s aggressive move into the middle of the fray as well as widely expected ex-im changes that will allow imports from countries throughout Europe. However, in the meantime, this is one of the reasons that flower is so unpopular right now at the policy and insurance level. The other is that pharmacists in Germany are allowed to treat the flower as a drug that must be processed. In this case, that means that they are adding a significant surcharge, per gram, to flower because they grind it before they give it to patients.

How long this loophole will exist is unclear. However, what is also very clear is that oils in particular, will play a larger and larger role in most medical markets. Read, in other words, “pharmaceutical products.”

For this reason, the WHO recommendations, for one, are actually responding to unfolding realities on the ground, not leading or setting them.

Setting A Longer-Term Date For Widespread Recreational Reform

This conservative stance from the WHO also means, however, that in the longer run, individual country “recreational reform” particularly in places like Europe, will be on a slower than so far expected track. There are no countries in the EU who are willing to step too far ahead of the UN in general. That includes Luxembourg, which so far has made the boldest predictions about its intentions on the recreational front of any EU member. However, what this also may signal is that the UN will follow the lead set by Luxembourg. Even so, this legitimately puts a marker in the ground that at least Europe’s recreational picture is at least five years off.

In the meantime, the WHO recommendations begin to set international precedent and potentially the beginnings of guidelines around a global trade that has already challenged the UN to change its own regulations. In turn, expect these regulations to guide and help set national policy outside a few outliers (see Canada, Uruguay and potentially New Zealand) globally.

Bottom line, in other words? The latest news from the UN is not “bad” but clearly seems to say that cannabis reform is a battle that is still years in the making. That said, from the glass is half full perspective, it appears, finally, there might be the beginning of a light at the end of the international tunnel of prohibition.

February 6, 2019

Canadian Companies Continue European Cannabis Moves

By Marguerite Arnold

No Comments

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 30, 2019

Here Comes The Start-Up Nation Of Cannabis: Israel

By Marguerite Arnold

No Comments

For those who have been watching (if not in the thick of) the drama over Israeli medical cannabis export rights, this latest development was not only inevitable but overdue. Israel’s parliament unanimously approved the legislation on Christmas Day (along with Thailand). Less than a month later, the cabinet concurred.

That means that export rights are now actionable law.

Beyond this final passage into reality, export rights have been at the forefront of a global drama on cannabis- most recently in this part of the world, as a specific chip in political dealmaking between U.S. President and Israel’s Prime Minister, Benjamin Netanyahu since the former entered office. This go around at least.

The political bargaining that even allowed Israel’s medical program to flourish and get funding from its earliest days (including of the U.S. federal government kind) of course, is nothing new.

Pioneers Of The Cannabis Industry

Hard as it is to believe, most of what is widely known and easily digitally shared (including on social media) about cannabis (as a plant, let alone distinctions between cannabinoids) is information created during this last four to eight-year period (certainly since 2010). This has been driven by reform, and a birth of wider education about medical and recreational cannabis plus the cannabis industry and broader lifestyle press. And most of what is credible out there, no matter who claims credit today, has an Israeli origin, and of the medical kind.

Add this history of scientific research and insight to the philosophy of a nation driven by entrepreneurial zest, and say no more.

Now that Israel can begin to export its cannabis, the interesting thing to see is whether cannatech will in the end, be more valuable than individual strains themselves. The pick axe in this particular “green gold rush?”

For now, of course, all bets are off, even on the cultivation front. Because, no matter what else it is, it is well timed, globally, to give even the Israeli medical production market a big green shot in the arm.

Germany and Europe Beckons

The change in the law in Israel also comes as those who made first qualifying round in the German cultivation bid are getting prequalification letters, although this time, no firms, anywhere, have issued press releases about their finalist round status.

And here is the other issue to consider: While the bid itself does not have anything to do with import capability, new Israeli game in town is, in itself, a big game changer for anyone whose hat was thrown into the coalitions who applied for the pending cultivation license. Why? Until they deliver their first crops grown auf Deutschland, firms have to deliver from somewhere. And this being Germany, the import destination has to be from a place where the plant is federally legal. Israel becomes another option in a market so far dominated by Dutch and Canadian firms.

cannabis close up — The Tikun Olam strain Avidekel being grown in Israel.

Can you smell new bid lawsuits also, if this scenario has not already been addressed by BfArM? The history of cannabinoids in Germany in general (historically as well as recently) is fraught already. This pending challenge, should it come, will be laden with symbology modern Germany will do everything to avoid provoking.

Beyond the soap opera that the bid has turned into in Germany (the ultimate test case for cultivation and insurance-backed medical and industry acceptance across the rest of the EU essentially), there are of course, other markets beckoning. This includes all of Eastern Europe and much of the EU. This includes France and the UK immediately.

In other words, no matter what the longer-term impacts will be, this well timed, politically astute Israeli decision is coming at the beginning of what is going to be, as everyone is clearly seeing at the end of January, a momentous and earth-shaking year not only for Europe, but globally.

And that is big business for a little country with an eye on the export game.

January 30, 2019

Swiss Cloud 9 Begins Importing Cannabis From United States

By Marguerite Arnold

2 Comments

For all the success of the cannabis market in the United States, there are two big issues that still confound the industry because of a lack of federal reform. The first, of course, is national recognition of an industry that still struggles with banking, insurance and selling products across state lines. The other is international trade.

However, it appears that one Colorado-based company, United Cannabis, has now successfully begun to navigate the complex regulatory and standards puzzle, and further, has set up trade and import agreements in both France and Switzerland. Even more interesting? It managed to do the same before the passage of the Farm Bill.

At present they are exporting to Europe from Florida – but the fact that they are exporting in the European direction at all is a feat still unmatched by many other American firms all looking to do the same thing.

Francis Scanlan, founder of Cloud 9 Switzerland

In Switzerland, they are also partnering with an equally intriguing firm called Cloud 9 Switzerland. We sat down with Francis Scanlan, founder of Cloud 9 Switzerland, to talk about what they are doing and how they are doing it- and from the European perspective.

The First Compliant Swiss Chocolate Maker

Cloud 9 is a start-up that is going head to head with the larger Canadian firms in innovative ways and in several directions. That includes the creation of food and beverage products. It also includes pharmaceuticals.

As of January 22, 2019, Cloud 9 also received approval from Swiss authorities to proceed with production of what will be, as Scanlan describes it, “the first EU-compliant hemp chocolate bar.” The hemp they are using contains a full spectrum hemp extract, which does not fall under the rubric of a so-called “novel food” because hemp has been a product in the consumer market here for a long time.

The product will be on Italian shelves as of the end of Q1 this year. Beyond the regulatory approvals necessary to get to market, it also took him about a year to find and convince a chocolate manufacturer in Switzerland to work with him.

Scanlan describes his year and a half old firm as the “value added” between suppliers, manufacturers and distributors. With a background in the corporate food and beverage industry including a stint at Nestlé, he and his team create the formulations and commercialize new products. And they keep a sharp eye on the regulatory bottom line in Europe.

Cloud 9’s corporate mission, Scanlan says, is to improve the quality of life and wellness of their customers. “We are not in the opportunistic marketing business” he says. “We want to create products that really benefit people. Our motto has always been Win-Win for both our partners and consumers.”

Bringing A Glaucoma Drug To The EU Market

However do not mistake Cloud 9 or even Scanlan himself as a kind of cannabis Willy Wonka one hit wonder. Or a firm that is solely operating in the wellness space. They are also now working to bring a Glaucoma drug into the EU where they will begin with medical trials to start the approval process. That said, Scanlan is confident about the success of this product as well. “It has a great dossier in its home country,” he says. “And that has also already caught the interest of doctors in Italy and Switzerland.”

Beyond that, there are other plans in the works, including the introduction of a transdermal patch that delivers cannabinoids through the skin. “The great thing about this kind of approach,” Scanlan says, “is that it allows people to get over their fear of orally ingested drugs. They don’t like the effect, they can just take it off.” He also noted that the patch uses a patented technology that allows a far more efficient delivery mechanism, which creates a time-delayed medication approach and allows for a 90% transfer of cannabinoids.

In other words, this small, privately funded start-up, using innovative approaches to a market Scanlan knows well, is absolutely in the ring and going to market. And further doing so with a European mindset and operating philosophy that incorporates not only hemp exported from the American hemisphere, but is mixed with a large dollop of good old “American” entrepreneurial gusto and inclinations.

Disclaimer: Cloud9 is a sponsor of the MedPayRx pilot to market program in the EU.

January 16, 2019

French Cannabis Reform Is Finally In The Offing

By Marguerite Arnold

No Comments

It is not exactly the storming of the Bastille, but cannabis reform appears to finally be not just in the offing, but crystallizing in the land of the Marseillaise. Why? Apart from the inevitable, particularly now that the European Parliament has put medical reform on a continental agenda?

The first reason is that this is an easy way for the increasingly politically beleaguered French Prime Minister Emmanual Macron to show he is a “man of the people.” In the age of the gilets jaunes or “yellow vests” – protesters on the streets pushing for economic and political justice – a reform of the green kind is just the ticket.

Secondly, French drug laws are still ridiculously harsh. Use or possession of “narcotics” that are not specifically prescribed by a doctor carries up to a $4,000 fine and a year in prison.

The third reason is that politicians and policy reformers are finally getting the message because of another reason also familiar to American reformers. Locking people up for even minor drug offenses (and French law makes no distinction between cannabis and harder drugs) is a societal menace. It costs the government a lot of money to put people in prison. And the police, just as they are in other places, notably Germany, are tired of engaging in this kind of activity. Particularly when a large number of those they end up arresting are actually patients.

Here is the next issue: The drug laws on the books in France date from December 31, 1970. Similar to the U.S., cannabis of course was treated just like heroin and cocaine. Since that period, French drug arrests have steadily increased (making 67.5% of all arrests as of 2016). Convictions for drug offenses have also increased over ten-fold in the last generation (since the turn of the century).Last year, the CBD market was allowed a little room to flourish in the new grey laws around reform

In a country where approximately 700,000 people use cannabis daily, and 1.4 million use it regularly, this is clearly not sustainable on any front. Particularly where cannabis reform is such a potent weapon in a country where the “yellow vests” have made such a global impression. Cannabis reform, in other words, is an easy fix for a country now thinking about the impact of popular revolutions of other kinds. Not to mention with a history of them. And even more particularly where reform last year allowed “le weed light” (low THC, high CBD strains) to go on sale (with a popular response).

Implications

How fast reform will move here is still obviously uncertain. The current government has been making noise about it for the last two years. Last year, the CBD market was allowed a little room to flourish in the new grey laws around reform (although even here, the first CBD “coffee shops” were shut down last summer almost as soon as they opened).

Given the conservative pace so far, look for France to follow rather than lead. From a CBD perspective, if not a THC one, the country looks very much more like Italy and Germany than Spain or Holland from the cannabis perspective – at least at present.

For such reasons, expect France to follow toute le monde, rather than lead the pack. Decriminalization plus some kind of insurance coverage (similar to Germany) is much more likely to be on the short-term agenda than say a massive rush to embrace the industry (as in Greece). The green revolution may now be in the wings here, but pushed by other unavoidable forces in Europe if not domestically.

That said, to paraphrase the words of the country’s last King, Louis VIX, when France does move on something resembling real reform, it will mean that after that, the “green deluge” will most certainly be on the hoof across the rest of the continent.

December 19, 2018

First Cannabis Clinical Trials All Set In UK

By Marguerite Arnold

1 Comment

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.

December 17, 2018

Aphria Fights Shortseller Allegations Of Insider Double Dealing

By Marguerite Arnold

2 Comments

Two reports published by short selling stock firm Quintessential Capital Management and forensic investor research firm Hindenburg Research on December 3, charges that Canadian LP Aphria, has bought overinflated assets in Latin America and in Florida from shell companies owned by company insiders. Added to the lingering controversy is the purchase of the German Nuuvera this spring (a company also partly owned by Aphria brass), and the reports went over like a bombshell. Globally.

However, the story has already spread far beyond one company. And the response in the market has rocked the industry for most of December.

Aphria’s shares tanked, and dragged everyone down with them. Several class action law firms in the United States began promptly looking for aggrieved shareholders.

The response by the firm? A promise of an immediate line-by-line rebuttal, due out in the second week of December. So far, however, despite news of an additional Aphria purchase in Paraguay, the rebuttal report has not been issued.

Why Is This So Damaging? Or Is It?

Aphria’s stocks promptly took a dive that halved their value although they began to recover after Aphria management appointed an independent third party firm to review the claims.

Worse, however, the entire industry saw a hit too. This report affected investor confidence across the industry. And although the hit appears to be temporary, the unfolding scenario is a perfect example of why volatility in the market is scaring away not only more conservative female retail investors but larger institutional ones that the industry is now courting assiduously as medical cannabis begins to be integrated into health systems particularly in Europe.

Why?

Bottom line? As the big cannabis companies are listing on the larger, foreign exchanges, including the NYSE and Deutsche Börse, the scrutiny is getting more direct and granular.Despite the stratospheric market caps of all the major Canadian LPs in particular, not to mention enormous expenditures for the last several years (on property and other acquisitions), the revenue picture, as other stock analysts and publications such as the normally neutral Motley Fool recently pointed out, at least so far does not justify the same. Bulk sales to a hospital, establishing a cultivation or processing facility or even getting import licenses may set one up to do business however, but it is not an automatic route to ongoing and expanding sales. And that is the key to high valuations that are rock solid and beyond the scope of such allegations.

For the moment, that pressure, particularly in global medical markets, is falling first on patients if not doctors. Not the industry.

That said, this has been a major building year. Recreational cannabis has just become legal in Canada. And in Europe, reform is still in the process of happening.

It is also a charge if not frustration that has been growing, however, against all the public cannabis companies as valuations shoot into the stratosphere. Forensic and investigative firms, particularly in Europe and the United States have been focusing on the industry for close to a year now. As a result even when firms successfully rebut charges of fraud, they are looking at different valuations from analysts at least in the short term.

Bottom line? As the big cannabis companies are listing on the larger, foreign exchanges, including the NYSE and Deutsche Börse, the scrutiny is getting more direct and granular.

Are “Short Seller” Reports Unbiased?

For all of the focus on short seller reports in this industry, however, no matter the accuracy of some of their claims, here is the next issue:

Short sellers make money by betting against not only individual firms but the industry itself. They benefit financially in other words, from volatility in the market and arbitraging even small changes in price. Even if their reports cause the same.

Such reports as a result are also not “unbiased” as industry coverage in the press is supposed to be, no matter how much more time sometimes goes into the reporting and preparation of the same.

And no matter that this industry is now going into its fifth year, there is still lingering scepticism that, in the case of Aphria, has so far not only fallen on the individual firm in question, but then rebounds across the industry, unfairly hurting all firms in this space.