Tag Archives: Holland

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Italian Government Cancels One of Aurora’s Licenses

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

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

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

What Is Going On?

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

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

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

EU GMP Standards Are In The Room In Europe

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

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

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

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

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

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

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

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

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

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

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

Alcaliber Spinoff Linneo Health Gets Greenhouse GMP Certification In Spain

By Marguerite Arnold
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As the industry faces what is undoubtedly a watershed moment for the international cannabis vertical, a new Spanish firm steps into the market with its own EU GMP certification license. Linneo Health is also helmed by the ever eloquent and highly experienced Jose Antonio de la Puente – a tall drink of water with a conscience, a brain and an admirable mission statement.

As Cannabis Industry Journal broke in our last story, a lack of international standards in Europe have been on trial of late. The same day that the CannTrust scandal began to blow in Canada and as Danish authorities rang global alerts, the only qualified packager in Holland was issued a new EU GMP cert. That is a government decision, not a commercial one.

This also implies, at minimum, government lack of coordination and agreement on EU GMP cert even between European nations, for a nascent industry while also trying to avoid the thorny issue of patient home grow. See also the trials and travails of the erstwhile German cultivation bid and its reconstituted Frankenstein-esque bigger if younger sister. In fact, this contretemps is almost certainly involved if not indirectly to blame.

Not All Is Entirely Rosy On Cannabis Europe’s Eastern Front

Almost simultaneously to Linneo Health’s announcement, however, the news came that in Poland, authorities had suspended the pending product registration process. Will this be on hold until after the October election?

In this environment it is almost impossible to know.

Here is one thing to consider. These almost simultaneous developments in Spain and Poland and the newest announcement about further certification of the Dutch recreational system under a new pending “recreational trial” are almost directly related.

That said, even such political maneuverings are not new – and far from limited to any single company. Both Germany and Poland have been wracked by reform stuttered by short term gain and market entry strategies executed by most of the biggest players in the room. Aurora, for example, announced their first import into Poland the same day the Polish government changed the law last fall. Aurora uses Germany as its breakpoint distribution center for Europe.

A Stamp of Authenticity That Is Sorely Needed

Beyond the pharma and market entry politics, however, this Alcaliber-helmed project creates a ring of authority to the same that creates at least one cannabis brand the European medical community can see the certification for.

For now at least, certainly among the ranks of the upper echelons of the international cannabis industry, there must surely be a sigh of relief.

EU GMP certifications (in other words, the authorization to produce product bound for a medical, pharma market) do not happen overnight. On the European front, this is surely at least a step in the right direction for an industry embattled by scandals, particularly of the securities, production, certification and accounting kind right now.

In this case, however, it is also clear that no matter the egregious oversteps and potentially illegal and certainly dubious behaviour of some members of the industry, there are also clearly those within it, and at high levels, who have tried to do the right thing. And further, from the beginning of the nascent industry here as of 2015.

Who Is Alcaliber?

Alcaliber is one of the world’s largest opioid manufacturers. Unlike American counterparts, the company decided several years ago to invest in and back ideas of the opioid-to-cannabinoid therapy model. Linneo Health is a 60% subsidiary of Alcaliber and 40% owned by a Spanish family office called Torreal, S.A.

This is, as a result, one of the most important GMP licenses in Europe at the moment if not the world. It means that within a pharmaceutical environment, the first widespread research and production of plants and therapies for those suffering from both chronic pain, plus neurological and oncological conditions that cause or are related to the same, will be put on a fast track long in the offing. Certainly in Europe.

And that for one, is a positive development that will have widespread implications elsewhere. Particularly given the news that the opioid epidemic in the United States finally has a name, and culpable parties.

What Else Is Unusual About This Project?

GMP certification is a vastly misunderstood concept at the moment. It is also a highly thorny one because of a still standardizing set of agreements. The regulatory environment is in place, in other words, but there are many, many gaps, as well as shifting rules and underlying treaties.

GMPHowever, on top of this, there is also an amazing lack of innovation in interpretation, in part because of many misadvised consultants who are actually seeking to “save” production costs for their clients, or because they do not know any better. Or because producers are scared of doing the wrong thing.

The new project in Spain is unusual because it is a greenhouse grow that got EU GMP cert – although look for more of this in the future. It means that with careful, standardized, pharma production, not all regulated cannabis grows, even for the medical market, have to use huge amounts of energy in repurposed post-industrial developments. It is also certainly cleaner than growing outside. And, when done right, saves huge amounts of water.

Cleantech, in other words, has finally hit the cannabis industry in Europe. As well as a pharmaceutical company invested in the cannabinoid treatment of (at least) chronic pain.

That is an overdue and hugely positive development. No matter what else can be said for shenanigans engulfing the rest of the industry at the moment.

Marguerite Arnold

Canopy Growth Makes Multi-Billion Dollar Conditional Acquisition Deal

By Marguerite Arnold
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Marguerite Arnold

The first German cannabis bid may have come to an end more or less, and with a whimper rather than a bang (not to mention the inevitable still-to-be-settled legal challenges). However even as the dust settles, one of the biggest “names” in cannabis and the company formerly expected to win at least a few of the tender lots is looking elsewhere.

Namely Canopy Growth, which was a finalist in the first round of the tender, has not shown up as a finalist firm in Germany this time (at least not so far).

However, it is clear the firm has other intentions afoot, namely U.S. expansion.

In an unprecedented move, Canopy announced its intent to buy the largest U.S. based producer of cannabis, a firm called Acreage Holdings, just before Easter. The conditional deal is being consummated in both cash ($300 million) plus stock swaps, and will not finally close until federal reform has come in the U.S. In fact, the deal makes the bet that the entire issue of U.S. federal reform will be solved within the next decade.

Canopy_Growth_Corporation_logoIn the meantime, however, what this also does is place one of the world’s largest cannabis companies in the middle of what is largely seen as the world’s most valuable overall cannabis market. Further it does so in an environment where the company benefits from Acreage’s considerable market and political clout. Former speaker of the U.S. House of Representatives John Boehner (a fierce opponent of legalization until it was personally convenient and profitable) is on the board of Acreage.

But there are those who might still be confused about why this deal happened. Canopy after all is fond of saying that its first focus is the “more valuable” medical rather than recreational market. And the U.S. market has many challenges still, that stem from a lack of federal reform. In fact, Canopy has frequently said in the past that they would not enter the U.S. until federal reform occurs. What gives?

What The Deal Also Does…

It is not “just” entry into the U.S. recreational market, albeit still on a state level that is significant about the deal. That starts with its timing.

When trying to understand the motivations of Canadian cannabis companies, especially ones who have eschewed the U.S. market in the past (at least until federal reform passes), it is also necessary to understand that they operate in a shifting world of global strategy that is never as straightforward as one might think. And often has nothing to do with cannabis per se.

Namely, while this deal places Canopy in the middle of the U.S. state industry it also does something else. It positions Canopy as a U.S. producer just two months after a new international pharmaceutical trade deal went into force (on February 8) called an MRA.

MRA agreements, also known as Mutual Recognition Agreements, are essentially trade deals between countries to accept the equivalency of their pharmaceutical production and supply chain.

On the cannabis front, the existence of MRAs between existing countries as cannabis has become legal, has also largely dictated the new international cannabis trade (see Canada and Germany as a perfect example) although this has been held as a closely held secret by the largest cannabis company executives (some of whom have previously denied that this was driving their expansion across Europe).

However, thanks to the agreement on this MRA in February, as of July of this year, Europe and the U.S. will formally kick off a situation where the European and therefore German health authorities will formally recognize American GMP processes.

That means that on the pharma front, Canopy has also essentially re-entered the European market, albeit by a bit of a backdoor. It also means that Canopy can immediately start to import cannabis drugs at least, made in the U.S. into the European and by extension, German market.

Cannabis drugs have been going in the opposite direction across the Atlantic to the U.S. for at least a year now (see the GW Pharma’s Epidiolex adventure last year). And further over the U.S.-Canadian border if now only bound for academic research (see Tilray).

It also may mean that they can import medical cannabis itself to be used as “medicine” or processed into one in Europe.

Does This Mean That U.S. Federal Reform Is Imminent?

Not necessarily. In fact, keeping the U.S. market in general out of the global cannabis trade, while allowing the top companies to participate both in the cross-state market and the global pharmaceutical one benefits the biggest companies. Conveniently, this also allows U.S. cannabis “pharmaceutical” producers to enter the EU in force just as Israel is expected to (third quarter this year). This also puts the “deal” U.S. President Trump and Israeli President Netanyahu cut on the subject to delay Israeli sales in an entirely new light (and one that should outrage both Americans and Israelis in the industry on this front even more). Not to mention every European hopeful producer unaware of the larger game afoot.

That said, what federal U.S. legalization will do is drop the operating costs of the larger U.S. entities now engaged in multi-state operations.

Cannabis in other words is not likely to be legalized in the U.S. before the next presidential elections for reasons that have everything to do with the profits of a few – and for that reason will certainly be a major theme in the next national political race.

And in the meantime, the biggest companies, Canopy included, are not only laughing all the way to the bank (although their shareholders are another story), but setting themselves up to be at the ground floor DNA of the global cannabis business as it establishes itself in every country of the world.

Marguerite Arnold

Countries Take Lessons From Others On Legalizing Cannabis

By Marguerite Arnold
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As the German bid fiasco proves, and in spades, there is no easy transition out of prohibition. As of this April, it will be two years since the German Cannabis Agency issued its first cultivation bid. Since then, the first attempt went down in legal flames (in court) and the agency in charge, BfArM took an embarrassing hit for committing a “technical fault.” As of April, the second issuance gets its day in court. And then presumably, hopefully, cultivation can start to get going.

However, the German cultivation bid is far from the only time that government officials and regulators have created canna Frankensteins. In every legalizing market so far, in fact, from Colorado’s recreational start in 2014 to Canada, lawsuits, flubs and mistakes have been the order of the day.

There is a growing debate in Europe over how the cannabis industry should be allowed to flourish.States throughout the US continue to model their legalization frameworks off of states that have already done so. No wonder, then that as legalization rolls on, other countries are beginning to study the early movers- for tips on what to do and what to avoid.

New Zealand Takes A Look At Portugal

New Zealand is widely expected to become either the “next” country (or the one after that) to fully legalize recreational cannabis. Further it plans to do so during a national election (presumably ahead of the U.S. but that will be interesting to watch). New Zealand has jumped the gun already and put it on the electoral agenda.

That leaves the Kiwis with at least another 18 months to consider how they might pull it off. Don’t forget, it took the Canadians that long, with one failed initiation date last summer that was pushed to the fall. And that was with a medical market that was already three years old.

As of this month at least, New Zealanders are looking at several options, Portugal being one of them. Portugal gained distinction by decriminalizing all drugs at the turn of the century and has not looked back.

The country has seen a steady decline in all the bad stuff associated with the black market. Overdoses, drug crime, teen use and HIV infections have all dropped dramatically.

That said, for all Portugal’s forward motion, nobody else, yet, has quite followed suit.

Decriminalization, it should be pointed out, is also only one of the many issues facing a national change in policy. As Canada knows well.

Luxembourg Takes A Look At Canada

The Greens in Luxembourg certainly made news last year when they announced that recreational cannabis legalization was on their five-year legislative plan. In a tip to both U.S. and Canadian discussions about how legalization can increase tax revenues, Luxembourgers are also clearly looking at how to follow suit.

Auroraaurora logo cannabis so far has the only distribution agreement inked with the country to provide medical supplies, but it is unknown at this point whether Luxembourg will be content to merely import or grow its own.

One of the biggest problems Europeans will encounter immediately in looking at the Canadian transition to recreational use is that the government literally had to mandate an additional five-year period for medical use after the beginning of the recreational market. So far, at least, Luxembourgians appear to want to do this the other way around. They have already created a multi year test and study program for medical uses of the drug.

A Big Difference In Approaches

There is a growing debate in Europe over how the cannabis industry should be allowed to flourish. On one end of the discussion who see no issues with the North American model of public companies, in particular, having the greatest influence over the shape of the industry. But this is not the only discussion in the room at this point, particularly given the huge head start the Canadian public companies now have in the rest of the world.

In places like Spain and Thailand, for example, politicians are also starting to bring other models to the fore- including protectionist policies around domestic cannabis production.

Regardless, compare and contrast is a trend that is still in its infancy as the market leaders struggle with the implications of half-baked policies and those who follow seek to emulate the successes but avoid the mistakes.

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European Moves Signal Green Spring For Cannabis

By Marguerite Arnold
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It is hard to believe that two years have passed since the German government changed the law to mandate insurance coverage of cannabis by public health insurers. It is not so much the passing of time, but what has and what has not happened here on the ground during this stretch.

This is borne out by a quick overview of regional developments just in the last few weeks on the ground across the European Union.

Germany

The country that is still given credit for kicking off the whole medical cannabis enchilada discussion on a formal, federal level in Europe, still has not issued its first domestic cannabis cultivation tender. It will be two years this April since the initiative was first announced. Since then, several lawsuits have derailed the process, BfArM, the federal agency in charge of the tender, has admitted to a “technical fault,” and, presumably after the next round in court, the agency might be able to get on with business. The next date of note is April 10 (when the lawsuit will be heard in Dusseldorf).

german flag
Photo: Ian McWilliams, Flickr

Hopefully, this also means that the domestic cultivation of cannabis will finally begin (according to the agency) by, at latest, the fourth quarter of 2020. In the meantime, look for the awarding of bid finalists (or in the worst case, one more bid issuance after April) this year.

In the meantime, and even according to BfArM’s press statements, the import industry will fill in the gaps- meaning that by the time cultivation actually gets under way for real here, it will already be swamped, in terms of volume, by imports.

Where those imports will come from is another discussion. Right now, the only two countries with import rights for cannabis into Deutschland are Holland and Canada. Expect that to change this year, with Israel, Portugal, Spain and potentially even Greece all being very likely contenders.

Switzerland

Significantly, this tiny, non-EU but Schengen state is considering a pilot to study recreational cannabis. Namely, 5,000 recreational users could soon be recruited to help the government set the rules for a fully recreational market, presumably sometime in the near future.

Switzerland has led the discussion in the region on several fronts- notably setting the pace on CBD sales and continuing to air debates about how profitable the fully recreational industry will be for the public purse.

Bern, the capital of Switzerland
Photo: martin_vmorris

It is all very intriguing, particularly to neighbouring DACH state, Germany, but don’t expect the Swiss to do anything too outrageous on the legalization front- namely step too far out in front of either the UN or the European Parliament. Or anger their other DACH trade partner, Austria, who has taken the extreme polar opposite approach to all things CBD.

So to the extent that the Swiss have very much led the charge on the CBD front, such policies have not and will certainly not be copied across Europe (and has not been so far) any time soon. See the controversies over “novel foods” popping up not only in Austria, but Spain too.

Regardless, like Luxembourg, the Swiss are eyeing this new industry and proceeding cautiously in line with larger, international regulations that so far have led the pack on tweaking, testing and presumably changing in the next couple of years.

There are at least 200,000 people who currently use the fully leaded THC version of the drug illegally. Those who would qualify for the pilot study (only one of several proposed as the country considers the impact of cannabinoids from all angles) would have to be adults who already use the drug.

Stay tuned. This will certainly be one interesting trial.

Belgium

Belgium has also just announced the formation of its own “Cannabis Agency.” The new agency will, just as in Germany, oversee the development of the industry domestically- namely issuing licenses for production and import and overseeing quality.

Does this mean a Belgian cultivation bid is on the horizon? Could be. Although so far, no country except Greece has engaged in any large-scale cultivation effort commissioned by the government. And no country except Germany has so far issued a public tender. Even Italy proceeded with a unique hybrid last year when the military essentially turned over the domestic production it controlled over to Aurora.

This too is also likely to be an interesting space over the next few years.

A Belgian tender, right along with a Polish one (also expected after BfArM successfully executes at least one) may well be in the offing this year. This may also put additional heat on the German agency to bite the bullet and issue cultivation licenses by the end of 2019 no matter what happens in Dusseldorf in April.

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Where Is The German Cultivation Bid?

By Marguerite Arnold
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For those following the German cultivation bid drama, there appears to be a real light at the end of a now two year tunnel– driven by a domestic demand that essentially requires that there be no more delays.

Then again, given developments so far, who knows really what will happen in April. It could be a whole new “fresh start” for a much-beleaguered process or it could just go down as yet another “train” on the basis of a “technical fault.”

One thing is for sure: BfArM again appears to be cautiously optimistic. Yet they have been there before, too. Yes, there is a rising patient count. But there are also now many other import options and cheaper prices coming into the EU. As a result, there is still the likelihood, however implausible, that the German government will want to kick this can a bit further down the road.

German Parliament Building

What is the newest development? In late January, BfArM, the German equivalent to the FDA and the agency in charge of oversight and regulation of all medicines and medical devices, issued a press release about the status of the cannabis cultivation bid they are tasked with overseeing.

If things are not taken off track by the next still pending lawsuit (due to be heard by the high court in Dusseldorf on 10 April of this year), the agency will award the bid. Not before, as the press release also states categorically.

The Highlights

There is no award date yet of course. However, if the court case is decided in favour of BfArM this time (namely defending their exclusion of a bidder even though the deadline was delayed again for seven weeks last fall), there is reason to believe the public airing of that final list of license holders will be released soon after. That means the bid decision could come as soon as the next day and certainly by the end of April.

There were over 200 questions asked of the agency this time by around 79 bidders who submitted a total of 817 bids for a total of 13 cultivation lots. No more than five lots can go to any one bidder or consortium.

The amount to be cultivated under this first bid is 10,400 kg over four years (up from the first amount). Even this is expected to be too low to meet a clear and increasing domestic demand. That said, there is clear expectation that the remainder between what is cultivated domestically and consumed will be taken up by imports (although from where was not explicitly discussed).

The agency also stressed that they are responsible only for the administration of the tender itself. They will not receive, store or redistribute the cannabis or cannabis products. Further, BfArM also stressed that they are not responsible for the regulation of the final retail price at pharmacies.

Finally, the target date for the delivery of the first crops is a conservative estimate which says two things. One, BfArM are not tipping their hand in favour of Wayland (who at present has the largest licensed GMP facility in the country), and second, they are leaving themselves and bid respondents a little more wiggle room. Just in case. For whatever reason.

As the bid states, successful respondents do not need to have suitable real estate under contract until the finalists are announced, but if they are awarded the bid, they will have to not only move fast to secure a facility, but also set up a grow facility that can be certified in the next interim period.

By way of contrast, Wayland announced its purchase of the Ebersbach facility in the summer of 2017. They have just received, 18 months later, their GMP certification. Anyone starting from scratch, in other words, would have to move at least as fast as Wayland has. If not a bit faster, considering that Wayland is already up and running, and at this point certified.

Between The Lines

The entire cannabis legalization discussion has been caught up in the cultivation bid since the beginning. Patients in fact, lost their temporary right to grow if they could not afford the expensive cannabis being sold in pharmacies before 2017. After the law changed, only licensed and regulated operators were allowed to distribute the imported variety and then only from Holland and Canada.

Since then, the first cultivation bid went down in a legal challenge, the price of cannabis at the retail end has effectively increased at least 1,000 euros a month and there are as many as 80,000 German patients taking some kind of cannabinoid, mostly for chronic pain.

It is insurers, in other words, at least as much and now more than patients who are now on the sharp and expensive end of the stick.

Then again, until the actual announcement from the Dusseldorf high court if not BfArM itself, expect late breaking developments and drama until the very end.However, the interim frustrating period auf Deutschland plus the continuing needle of political reform just about everywhere (certainly in Europe) has changed the scenery dramatically in just two years. There are cultivation operations in Spain and Portugal with crops ready to be exported to the German consumer. Eastern Europe and Italy are also cultivating. Greece is preparing to. And Israel finally allowed its producers to jump into the medical game globally.

Prices will inevitably come down. The German government and insurance industry beyond that are two powerful drivers to insure the same. And a big part in bringing that price down is setting a bid reference price to begin with.

The situation, in other words, is being staged to move into the next “four-year plan” where Germany begins to understand how widely effective cannabinoids can be, for what conditions and what kind of delivery mechanisms work best for different patients.

It also aligns the country’s medical program perfectly with Luxembourg’s own four-year medical trial and now stated timeline of ensuring there is recreational reform by 2022.

All of which, in other words, also spells victory and potentially the end game to the first part of the German medical cannabis cultivation question and a larger first step for the EU beyond that to finally end medical cannabis prohibition.

Then again, until the actual announcement from the Dusseldorf high court if not BfArM itself, expect late breaking developments and drama until the very end.

Stay tuned.

Luxembourg’s New Ruling Coalition To Legalize Recreational Cannabis

By Marguerite Arnold
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Stand aside Canada! Events are moving in a strategically interesting way in Europe. And for once it is not news of the German bid.

In this case, implementation of the decision in Luxembourg would actually have two immediate effects.What, where, when? Luxembourg’s new center-left coalition of the Greens, Socialists and more traditional Democrats have put recreational cannabis on their ruling mandate and five-year agenda as of November 29, 2018.

In the comments of the same at the press conference held last week, the sentiments were pretty much of one tenor: “It’s way overdue.”

What does that mean, however, for the rest of the conversation across the continent?

Luxembourg: The First Recreational “State” Market In Europe?

While local advocates are quick to say that their ambition will make them the first EU country to completely legalize recreational cannabis, this is mostly true, but not entirely.

As much as it is fashionable these days to diss Holland, the fact of the matter is that the Dutch pioneered just about everything about the modern movement except clear cut regulation. Coffeeshop envy being what it is, however, it is true that the historical marker of the Dutch market was grey areas. That, however, has been in shifting territory for the last four to five years however. Hard as it is to believe that in just 2014 the Cannabis Cup held its last expo in Amsterdam. How the world has changed since then!

There is also this fact: Switzerland (true not an EU country but just next door geographically), is also poised to use this excuse to make its next move to fully leaded THC. The country has seen a sharp uptick in the consumer, OTC CBD market over the last two years. So much so that foreign (read American and Canadian in particular) enterprises are now looking to Switzerland as one of the more interesting “semi-EU” entry strategies at present. Taxes on a highly profitable industry are also in the public discussion. Adding a bit of THC to the mix, in other words, is likely to come fast in other places too.

Will This Move The Needle In Other Places?

The answer to that question is also, undeniably, yes. How fast that will happen in individual countries across Europe is another discussion. See France, which is now the largest member of the EU to have so far successfully ducked the cannabis question except for some basic decrim ideas that the now embattled French President Emmanuel Macron might, finally, put some enthusiasm into backing.

This could also certainly galvanize the UK. One way or the other, to stay or leave the EU itself. Full recreational won’t be in the cards, however, for quite some time.

Sound incredible? See Brexit so far.it will create the first deliberately regulated recreational market in Europe.

Many other EU countries have also been chafing at the slow pace of reform. Even after basic medical use has occurred. See German advocates who long to follow both the U.S. and Canada, and at present are for the most part shut out of the medical cultivation process. They are simply being outbid by the large Canadians.

But how fast such reforms will come even in Luxembourg, not to mention have a knock on effect elsewhere, no matter how momentous, is still an undecided question.

What Is The Biggest Immediate Impact Going To Be?

As is usually the case in Europe, things are rarely as straightforward as one country deciding to do (or not do) something. In this case, implementation of the decision in Luxembourg would actually have two immediate effects.

One, it will create the first deliberately regulated recreational market in Europe. How fast that could actually roll out is up for debate, considering that the country only legalized medical use as of this summer. As Colorado, California and certainly Canada have proven in spades so far, recreational reform always need some kind of medical base to start with. And implementation of both kinds of markets always seems, at least so far, to carry litigation. Especially in young, untested markets. See the German bid, most recently, just across the border.

However here is the second, and far more intriguing reality that really may be key to the entire enchilada. The legality of cannabis in Luxembourg also has everything to do with the German public cannabis market. Namely, the German stock exchange will only allow Germans to clear stock purchases of publicly listed cannabis companies on the Deutsche Börse if they are in line with not only German cannabis law but also that in Luxembourg, where they actually clear. That was a big issue this summer, only rectified when Luxembourg first changed its medical law.

It also meant, as of this fall, that Aurora went public in New York, not Frankfurt.

In the future, however, after Luxembourg goes full recreational Monty, this will no longer be the case. This will already be tested next spring as another company hopes to go public here. And when that happens, although certainly not for the next several years, the entire discussion of recreational reform will fully and finally be in the European room.

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Q1 European Cannabis Industry Update Report

By Marguerite Arnold
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While the American cannabis industry deals with both unparalleled opportunity and new risks, Europe is setting itself up for a spring that is going to be verdant.

The ongoing drumbeat for reform in countries across the continent is bringing both money and high-grade medical product into the market. Even if volume is still really at a trickle, it will rapidly widen to a steady stream. It is also very clear that the next two to three quarters are going to deliver news that the cannabiz has arrived, and with authority.

The following is an overview of what is happening, where, and with an eye to informing foreign investors, in particular, about new opportunities in an awakening market.

Germany

Without a doubt, the country is priming itself for a medical market that is going to be large and partially government supported, driving regulation of medical use across the continent. On top of that, the idea of selling 28 grams (1 oz) of product to end consumers who only pay about $12 for their medication has gotten the attention of global producers. Opportunities here for those who did not submit a bid for federal cultivation (see the big Canadian LPs) are still unfolding.

german flag
Photo: Ian McWilliams, Flickr

However here is what is now on the table: an import market that cannot get enough cheap, GMP certified product. Producers from Australia to Uruguay are now actively hunting for a way in, even if cutting a supply deal for the next 18 – 24 months as the German green machine starts to kick into production-ready status. What a bad time for Israel to be so publicly out of the ex-im biz! In fact, Israeli entrepreneurs are scouring the country for opportunities into the market another way (and there are a few efforts afoot in a sleeping giant of a market waking up from a long snooze to find they cannot get enough product). Right now, however, the legal market is absolutely dominated by Canopy, Aurora, Aphria and Tilray along with Dutch Bedrocan.

The German parliament is clearly also going to do something about another piece of reform which will also drive market expansion – starting with announcement of additional cultivation possibilities (potentially this time even open to German firms). On Friday, the day after the British parliament wrangled over the same thing, the German Bundestag debated decriminalization along with a few other hot button topics (like abortion). With only the AfD (right wing) still in the “lock ‘em up camp,” and even the head of the police calling for reform, it is clear that decriminalization is on the legislative agenda this year.

Spain, Italy, Switzerland, Portugal, Denmark & Holland

While it may seem presumptuous to lump all these very different countries under one label, the reality is that the level of reform is generally in a similar state (transition to medical), and that drives potential political and market risk as well as evaluation of investment decisions.

aurora logoIn Spain, federal reform has not come yet, but medical deals involving pharmaceutical companies (both exclusively cannabinoid focussed and otherwise) are afoot. Plus of course there is Barcelona (the Colorado of the country in many ways).

Italy, Portugal and Denmark are all the battlegrounds for the big Canadian (and German) companies now set on having a country-by-country footprint in opening markets across the EU (see Canopy, Aurora, Aphria and their German counterparts of Spektrum Cannabis, Pedianos and Nuuvera). Licensing is political, happening at a high level, and only for those with the bank to back deals that come with high capex attached. That said, there are lucrative opportunities for those with local contacts and liquidity.Nuuvera logo

Holland is another animal altogether, but for the most part everyone is so confused about the state of reform domestically that the only people really in position to take advantage of it are the Dutch, at least for now. That said, Dutch-based plays (in part financed by Canadian backing) for other Euro markets are absolutely underway. Who else has so much experience here, let’s be honest? Regardless, investments in these canna markets, particularly for the Euro-focussed but North American investor, for now, will tend to be through public stock acquisitions of Canadian parents or direct investments in Dutch companies (see Bedrocan, but they are not the only game in town).

Switzerland, for the most part, is setting its own pace, but reform here means the CBD market, including for medical grade imports, is a place for the savvy medical investor to look for cultivation and ex-im opportunities. Including in the home-grown, Swiss pharma space.

Greece

Parthenon, Athens, Greece
Photo: Kristoffer Trolle

The recent pronouncement of government officials that Greece was opening its doors to investment and a medical cannabis business means that there will be a federally legal, EU country that is promoting both investment and tourism opportunities just for domestic consumption, let alone export. Scouts from all the major canna companies are combing both the Greek mainland and its islands.

Poland

If there was ever such a thing as a “virgin” cannabis market, Poland might well qualify. For those distributors with cheap product that has not (yet) found a home, the country is poised to start to announce (at least) distribution deals to pharmacies with producers now establishing themselves in other markets. Medical legislation has just changed, in other words, but nothing else is in place. And with Polish patients now having, literally, to scour the continent for product not to mention foot the bill for the travel costs to get it, the next obvious step is a national pharmacy chain distribution deal or two with producers from all over the world now looking for Euro market entry possibilities. Domestic production is some time off.

The BalticsThe ongoing drumbeat for reform in countries across the continent is bringing both money and high-grade medical product into the market

If there were such a thing as the “Berlin” of the cannabis market in Europe (namely sexy but poor), it is probably going to be here. Cheap production markets and opening opportunities for export across the EU for high quality, low cost cannabis are not going unnoticed. Look for interesting plays and opportunities across the region. Scouts from the big international canna companies already are.

The UK

Britain comes last because of the political uncertainty in general, surrounding the island. However, last week Parliament appeared on the verge of being embarrassed into acting on at least medical reform. There will be a market here and of course, there is already one globally known cannabis company with a 19-year track record and a monopoly license on canna-medical research and production (GW Pharmaceuticals) that calls the British Isles home. This will be a no-brainer, particularly for foreign English-speaking investors still leery of continental Europe. However it will also be highly politically connected. Expect to see a few quick arranged marriages between such landed gentry and foreign capital – potentially even this year.

European Cannabis News Roundup 2017 And Predictions For 2018

By Marguerite Arnold
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Europe saw big developments on the cannabis front all year. This includes country-by-country developments that include legalization of medical use and even plans to begin domestic production, no matter how delayed such plans have turned out to be.

By far the most interesting market developments were in Germany all year. The Teutonic state has entered some interesting territory – even if its potential is still in the development rather than rollout status.

Elsewhere, however, medical acceptance is clearly starting to bloom across the continent in a way that is more reminiscent of American state development than what is about to happen in Canada.

One of the most interesting aspects of European reform however, that is in marked difference to what has happened in the U.S., is that grow facilities are being slowly established with federal authorization, even before further reform comes (see Turkey, Slovenia, Germany and even Denmark).

How reform will continue to roll out and shape the discussion however, is still a matter very much left up to individual European states. Cannabis legalization may become the first uniting issue of the new Deutsch ruling parliamentary coalition, whatever that is. In Spain, the cannabis question might yet be a play in simmering separatist tensions. Across the continent, legislatures are, for the first time in two generations, reconsidering what cannabis is, how it should be used, and what the penalties should be for those who use the drug either medicinally or recreationally.

Change is still all over the map. And it is still very, very slow.

Germany

The country’s federal legislators voted unanimously to mandate medical coverage of cannabis under public health insurance (which covers 90% of the population) on January 19th. Since then, however, forward movement has been stymied by a combination of forces and politics. While the legislation became law in March and the government established a cannabis agency, other developments have not been so clear cut. Yes, import licenses are being issued. And yes, there is a pending tender bid. However announcements of the finalists have been delayed since August due to lawsuits over qualifications of the growers, among other things. The new German government (whatever it will be) plus apparent CETA (EU-Canada Comprehensive Economic and Trade Agreement)-related complications have all added to the drama. That said, when the cannabis opera moves into its next act, as of probably early next year, expect to see domestic medical grow go forward. Importing medical supplies, even from across the continent (which is what is happening now) is ludicrously expensive. Rumours are already flying out of Berlin that further cannabis reform is one of the few things that all parties can agree to as a new government forms.

Holland

Sadly, the biggest cannabis-related “development” this year was the decision by all major health insurers to stop covering the drug, just as the German government changed its mind about the issue. Greater regulation of coffee shop grows coupled with this lack of insurance coverage means that patients are being forced into a coffee shop culture which is also commoditizing and commercializing into a high-volume affair, particularly in Amsterdam. While this might just be the new face of an old business, the laid back “coffee shop” culture of yore is an endangered species.

Barcelona, capital of Catalonia
Photo: Bert Kaufmann

Spain

Catalonian independence made headlines globally this year. So did the associated bid for other freedoms of a cannabis sort – particularly in Barcelona. Club grows were set to become more regulated as of this summer. However the massive Catalonian bid for independence has further muddied the waters. Given the fact that cannabis reform appears to be at the forefront of finding political compromise elsewhere in Germany, perhaps givebacks about taxes for this industry might be one way to temper down the still-raging separatist forces afoot.

Poland

The Polish government surprised everyone this fall, and legalized the drug for medical purposes (at least in theory) in November. What this actually means for patients is another story. There are no plans to cultivate on the radar. Patients under the new law are allowed to travel to other countries to seek their medical cannabis. How they might afford it is another question. Not to mention how they will escape prosecution from personal importation if checked at a border.

Warsaw, Poland
Image: Nikos Roussos, Flickr

Polish pharmacists will however be trained on how to make medicaments from imported cannabis. They will have to be registered with the Office for the Registration of Medical Products. This means that pharmacists must be pre-registered with the government – in a move much like the early days of the Israeli medical program. The medicine is expected to cost about $460 a month. How well this will work in serving the country’s more than 300,000 already eligible patients is another story.

Greece

Cannabis economists have long said that what the Greeks really need to heal their economy is a vibrant cannabis injection. And as of mid-November early investors in the nascent market had already staked close to $2 billion in cultivation opportunities. Senior ministers in the government have also publicly backed plans to move Greece into a strategic position to claim a piece of a global cannabis market estimated to reach 200 billion dollars a year by the end of the next decade. It means jobs. It means capital infusions. Exactly, in other words, what the Greek economy desperately needs. Expect to see further formalization of the grow program here in 2018 for sure.

Lithuania

It appears that quite a few countries in Europe are pushing for real cannabis reform by the end of the year, and this little EU country is joining the list. With a unanimous agreement in Parliament already to change the country’s drug policy, Lithuania’s legislators could vote to legalize the drug on December 12th of this year. All signs look promising.

Slovenia

MCG, an Australian-based company, made news in the fall by announcing a new cannabinoid extraction facility in the country, on track for completion this year. The company also ramped up domestic production operations in August. Real reform here still has a long way to go. However with domestic production underway, greater medical use looks promising.

Denmark

The country signed a production agreement to open a new facility in Odense, the country’s third largest city with Spektrum Cannabis, the medical brand of one of the largest Canadian producers (Canopy Cannabis) now seeking a foothold in Europe late this fall. What this means for ongoing reform in Denmark is also positive. The company will import cannabis via Spektrum Denmark until all the necessary approvals are ironed out for cultivation.

Portugal

While “reform” here is less of an issue than it is elsewhere (since all drugs are decriminalized), Portugal might yet play an interesting role in cross-European legalization. Tilray, another large Canadian-American firm with interests in Europe, announced the construction of a large medical cannabis facility in the country earlier this year. That plant could easily ship medical supplies across Europe as new countries legalize but do not implement grow facilities.

European Cannabis News Roundup- Summer 2017

By Marguerite Arnold
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Obstacles to American cannabis reform are creating a quirky if valuable market. Cannabis is still a “Schedule I” drug. From a practical perspective, this has created a multi-billion dollar industry that as of yet, cannot get reliable banking services. It also means that patients cannot get the drug covered under health insurance. There are no national safety requirements for growing, packaging, labelling or consumption.

This is certainly not the case elsewhere. Other countries are rapidly outpacing the U.S. in such regards even if their commercial markets are not (yet) of the same size. Outside of Canada right now, Europe is the place where most of these things are happening.

Just as in the U.S., however, there is no one single path to reform.

Who Is Interesting In Europe?

This is an evolving question, but here, for the moment are the market leaders and what is going on locally:

Germany. Cannareform auf Deutsch currently underway makes this the most exciting country in Europe right now. The country is basically the “California of the EU” as it were, with about 20 million more people.

German Parliament Building
Photo: NH53

As of January 19, the lower house of the German parliament voted unanimously to legalize cannabis for medical use. Further, they voted to cover it under public health insurance which covers 90% of Germans. Yes, this is a system in process. Yes, there are problems. Health insurance companies appear to have launched a tepid attempt to slow this down, but just as in Canada, they are already facing court challenges. It is a losing battle here. Both legal and legislative mandate are very clear.

This is an industry that will also begin to grow, per government estimates, at between 5-10,000 patients per year for the next couple of years. It could grow faster than that. With over 1 million potential patients already, and a high interest in plant-based and natural medicine, this is a market more than ready for cannabis products. There are now up to ten growing bids up for grabs here and those who have applied are waiting anxiously as the government is set to announce the winners this summer. The big push right now on the ground is doctor and patient education as well as getting patients signed up for trials.

Recreational reform is also far from dead here. The medical question, in fact, has only inspired activists to redouble their efforts to get recreational reform finalized sooner than later. Especially given developments elsewhere, including locally.

Bern, the capital of Switzerland
Photo: martin_vmorris

Switzerland. The Swiss are approaching the question of legalization in another unique way not seen anywhere else. That said, they are clearly inspired by events in other places. Since 2011, low-THC cannabis has been for sale in regular shops. However in the last quarter of 2016 and into the first of this year, the market all of a sudden seems to have woken up. There are now over 160 shops either selling the drug or applying to sell it. This is all product that is taxable.

Thanks to this, reformers are now pushing a bill federally that would legalize and tax the sales of all THC products – no matter their concentration. In effect, in other words, the Swiss are looking at tax revenue first. If they succeed, they will be the first country to enter the market this way. It will also push other countries, starting with their closest neighbours, to examine the question of legalization just on this front. The economic justification alone is compelling. Expect Austria to also look at the problem this way.

Spain. The country is widely billed as the “next Holland.” Why? Cannabis reform has been very similar procedurally. Due to loopholes in the current law, the Spanish have been able to establish a thriving “cannabis club” market. These clubs are member-driven and non-profit. However locals who are over the age of 21 can sign up and smoke in “semi-private.” Legislation now pending in the Spanish legislature would focus on better regulation of both the clubs and the existing grows that support them. The way the Spanish seem to be approaching the issue is to give larger cities and regions direct control over regulation of the industry. However for now, this is a market that is steadfastly resistant to commercial development on the scale seen in other places. Investors – especially from overseas, are avoiding the market because of this uncertainty.

De Wallen (Red Light District) in Amsterdam, where a number of cannabis shops are.
Photo: Bert Kaufmann

Holland. Generation X reformers are used to the idea of the grey market created by the unique nature of Dutch culture and the plant. For the better part of 40 years, the entire industry here has been based on a unique market of seed producers and growers. That, in turn, supports the coffee shop culture. There are many proposals to change the law here, and the industry will probably begin to better regulate – starting with cultivation, as the rest of Europe turns its attention to this issue. It was Holland after all, that started this. What is next for Holland 2.0? It is likely that regional developments will also shape this market too. It is still part of the EU.

Italy. While a bit of an outlier, the Italians are also in the game now. How further reform will proceed here, however is anyone’s guess. The Italian military began growing and distributing cannabis to pharmacies last year. The first medically focused canna café has now opened in Rome.

The Eastern Bloc

Eastern European countries are all over the map on legalization – although most are approaching this as a medical issue. In Czech Republic, legalization has moved forward here steadily in large part because of existing national drug policy. Croatia began importing from Canada last year in the form of cannabis concentrates. Both of those countries have digital prescription systems to integrate with medical cannabis, as part of the legislation legalizing medical use in 2015. This digital dispensation system is also unique so far in Europe, although other countries will be entering this area quickly. Even Turkey has begun to implement reform, allowing producers to begin to grow the plant domestically for local medical use.