Tag Archives: Poland

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Aurora Medical Cannabis Flower Unavailable In Germany Pending Review By Authorities

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

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

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

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

Substandard product is clearly coming from somewhere.

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

High Quality Supply Chain Issues Are In The Room

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

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

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

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

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

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

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

Will This Impact The German Cultivation Bid?

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

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Photo: Ian McWilliams, Flickr

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

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

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

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

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

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

What’s Going Down In The Danish Cannabis Market?

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

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

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

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

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

A Few Numbers

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

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

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

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

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

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

The Winds of Change

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

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The Economics of Ex-Im In Europe

By Marguerite Arnold
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You have read the press releases. You may have heard about such ideas at a recent cannabis conference in and around the EU of late. Or you may have encountered new distributors coming into the game with a German presence and a decidedly interesting ex-im plan that sounds a bit, well, off the map.

No matter how geographically creative some of these plans are, the problem is that many of these ideas literally do not make economic sense. Either for the companies themselves (if not their investors), and certainly not for patients. Not to mention, truth be told, the looming price sensitivity issues in the European market that North Americans, for starters, seem to still just be waking up to.

Some Recent Examples….

Yes, exports from Denmark have been much in the news lately (including into both Germany and Poland). Truth be told, however, this makes about as much sense, economically, as importing ice to eskimos. Why? Denmark, for all its looser regulations and less-uptight approach to the cannabis discussion generally, is one of the most expensive labour markets in Europe. Fully automated production plants are one thing, but you can build those in other places too. Especially warmer climates, with lots of sunshine. German production, as it comes online, will also make this idea increasingly ludicrous.

Who on earth got on this bandwagon? It seems that the enthusiasm in the room began when Denmark began to import to Germany (where the disparities in wages in production are not so noticeable). However, lately, several Canadian companies with a Danish footprint have been eying Poland of late.

And on that particular topic – there are many who are doing the math and trying to figure out, as the alternatives get going, if even Canada makes much sense, or will in a few years.

Low Wage Markets With Sunshine Are Hotspots For European Cannabis Production

Like it or not, the European market is extraordinarily price sensitive – namely because it is not “just” consumers called patients picking up the tab but health insurance companies demanding proof of medical efficacy.

That starts, a bit unfortunately, with understanding wage economics across Europe. The warmer the climate, in other words and the further east on the map, wages drop precipitously. That is “good” for an industry looking to produce ever cheaper (but more compliant) product.

It is also good, at least politically, for countries whose elected leaders are being forced to admit that cannabis works, but are less than copacetic about encouraging local production. See Germany for starters, but places like Austria, Poland and most recently France (which has just embarked on a first of its kind medical cannabis trial).

Here, no matter the temporary buzz about Denmark, are the places that cannabis production makes sense:european union states

Portugal: The country is a newcomer in the cannabis discussion this fall, although in truth, the seeds of this reality were sown several seasons ago when Tilray began to build its production plant in the country in 2017. They are far from the only company who has seen the light, and these days, farmers are getting hip to the possibilities. Especially if they are already exporting crops throughout Europe.

Spain: The industry that can afford GMP certification is getting going, but everyone else is stuck in a limbo between pharmaceutical producers and the strange gray market (see the patient clubs in Barcelona). That said, political groups are beginning to discuss cultivation as an economic development tool, if not sustainable food and medication strategies.

Greece: The weather is warm, and the investment climate welcoming. Of all the countries in the EU, Greece has embraced the economic possibilities that cannabis could bring. How that will play out in the next years to come is an intriguing story.

Italy: The southern part of the country in particular is ripe for cannabis investment and it’s full of sunshine. However, as many have noted, organized crime in this part of the world is a bit fierce and starts with the letter M.

Malta: The island is a comer, but does importing cannabis from here really make economic sense? There are trade routes and economic treaties tying the island both to the apparently Brexiting British and Europe. Why not, right? Just remember that along with labour, transportation costs are in the room here too.

And Just Outside The EU…

The country now (sort of) known as North Macedonia and struggling to get into the EU if France would just get out of the way is also going to be a heavyweight in this discussion for years to come. Wages, of course, will increase as part of EU membership, but in general, this country just north of Greece is going to play a highly strategic role in exports throughout Europe.

Poland Gets Cracking (Sort Of)

By Marguerite Arnold
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One of the surest ways to understand that you are entering not just another country, but what is called an “emerging market” is when you travel from Germany to Poland by train.

There is only one “intercity” option from Berlin Hauptbahnhoff – a far cry from the modern, internet-connected, fast ICE trains that go West. This line is run by the Poles. By the time you reach Warsaw five hours later, however, it is clear at least some parts of this country are booming. The skyscraper construction in the center of town rivals London and Berlin.

Like every emerging market, there are vast disparities in wealth and income, if not opportunity here. And into this discussion, now is coming the entire cannabis discussion. Visiting, as an American, in particular, one is reminded of a city that could be East Berlin 15 years ago.

As a cannabis journalist, it feels, from this perspective, like every American state in the 1990’s. Reform is on the tip of everyone’s tongue. But not quite realized yet, except for a few elites. Beyond such realities which are common in the world of cannabis, how very, well, Iron Curtain.

The difference of course, these days, is that the conversation next door in Germany, as well as other places, is finally forcing the Polish government to face reality. But it is clear, from interviews with activists and patients in particular, as well as the nascent newcomers from abroad testing the cannabis waters, that this fight is not going to be easy on the ground.

Then again, when and where has it ever been?

The Patients….

As always, real reform and market opening is driven by the sheer numbers of sick people who brave arrest to gain access to the plant. Some do it for themselves. Many do it for their children (of all ages). An elderly, boomer couple who talked to Cannabis Industry Journal about their ordeal also see it as a form of justified struggle. And Poles are no strangers to that, far from the cannabis kind.

That ethic is much in the room among the nascent industry that is also struggling to find respect. The Polish side of the discussion is looking at hemp. And growing THC illicitly, just like elsewhere.

But the budding movement here is highly organized, including on the business end, with hundreds of thousands of members. How this translates into a legal industry (besides media and hemp products) is of course, still up for grabs.

That is very much in the minds of those who brave the struggle daily. The patient collective in Warsaw is also highly organized – providing free and non-profit product to those most in need. It is an impressive operation. And further one that is increasingly distrustful of foreigners seeking “market share.” If not the already floating “suits.” Just knowing how to speak Polish, as the activists are, at least realizing, is not a guarantee that they will not be dealing with cannasharks only interested in their contacts and mailing lists. Patients over profits is a phrase you hear a lot here. This has nothing to do with not wanting to support a legit, safe industry. But when you are poor, you find ways to improvise. Including getting your medication.

The Foreign Companies…

Aurora and Canopy Growth are already in the room and there are other Canadians lining up to follow. However, these two are the only ones so far who have been able to get their products registered locally and even then, availability is still in the offing.

european union statesThese are also highly expensive products. And do not begin to compete with producers now eying the Polish market from North Macedonia and the rest of Eastern Europe.

The foreign companies, in other words, are already broadly falling into two camps. North American curiosity seekers (at this point), and companies, mostly from the East and South, who are looking to Poland to be the “next Germany.” Especially because their product is so price and geographically convenient.

A Battle For Poland’s Emerging Market

It is clear that at least the Canadian companies are already lining up against more home grown and patient interests. Just as what happened in Germany and the rest of Europe so far. And not even on purpose, but more on matters of price.

Like other pre-commoditized markets, the Polish industry is still trying to be (relatively) equal and fair, as much as there is a huge amount of positioning already just below the surface. Everyone is tired of struggling. Dreams of cannabis riches are enticing just about everywhere.

Of course, add to that, patients are dying here, and that always sets the tone – especially when only the richest and lucky few can afford to access the drug through legitimate channels. Face pain, unpleasantness or death or buy in the black market? For the Polish industry on the forefront of the debate, in other words, the stakes are high, the government is moving glacially, and those on the ground are organizing to meet the winds of change.

Foment for another kind of Green Perostroika? Perhaps.

There will, almost certainly as a result of these forces, be a call for a Polish bid – and further one that allows for local producers to enter the medical market.

But the bottom line is that this strange, and exciting and certainly new market is going to be as volatile, and wild west as any in Europe for the immediate future. Expect interesting things, if not more of the same.

Polish Authorities Halt Medical Cannabis Product Registration

By Marguerite Arnold
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In early September, Polish authorities halted medical cannabis product registrations.

It is still unclear what this was caused by. However, in conversations with the Dutch Cannabis Agency, Cannabis Industry Journal learned the Dutch government ran into significant problems with Polish acceptance of documents in the February 2019 timeframe. Further, CIJ has also learned that several other Canadian companies had apparently been trying to target Bedrocan products in Poland with this knowledge.

Even before authorities halted the registration process, it is clear that the often cut-throat game-playing seen in Germany frequently over the last few years, has also clearly entered the room just a bit east.

Is Cannabis Really Coming to Poland?

There is a national election in late October in Poland. There is a great deal on the line.

Including, of course, not just the dreams of Polish entrepreneurial hopefuls, but all of the largest cannabis companies on the planet. Poland has been a strategic and often unheralded market for most of them over the last 18 months. Aurora in fact, even announced its first import into the country last fall when the government announced a loosening of restrictions. And as the last country to enter into the EU-US MRA Agreement, with a conservative approach to cannabis at least in government, the country is ostensibly a big blue ocean for all things canna reform.

However, since most of the big companies use Germany as their product breakpoint, the news of a product registration delay nationally means that companies already in the room with EU-recognized product just got a big break.

Even if it is only short selling as much as they can into the market until product registration finally occurs.

A new kind of German-Canadian canna blitzkrieg of Poland is about to get underway this fall – certainly of the cannabis kind, although anyone with already registered EU product (see Germany for starters) has a big competitive leg up.

Cannapolitics Are In Play Across Europe

If this is the temperature in the room already, look for more machinations over the apparently pending Polish bid – although perhaps by that point, reform will have progressed far enough in Europe to prevent the same kind of local market hijacking by those with a public company and a will to dominate the market.

That said, expect backlash too, now from frustrated advocacy patient groups tired of more government blather about widespread reform that is clearly not mapped to come their way any time soon.

Here is the inconvenient and certainly unsolved reality in the room that so far has remained unsolved.

european union statesThere is zero way that even the largest companies in the room can provide enough product, local producers are on the rise, and there is clearly a building “green-vest” kind of uprising in the burgeoning industry itself. EU local and national sovereign producers are getting into the game and in a big way.

The reality is that this plant provides relief to pain of several kinds – from patients to locally starved municipal and state budgets.

Recreational Is On The Longer Term Horizon – But Major Hurdles Remain

While the largest companies have clearly been in the room shaping reform policy and in ways that are not necessarily in the best interests of the overall industry itself, let alone patients, there is the real potential for backlash right now. Particularly in Europe which has heard all the wonder stories about the economics if not other impacts of cannabis reform.

Europeans – even in the industry here – who venture to American state markets in particular, but also Canadian outlets – are very much in envy. However, most also realize that the market here will evolve differently.

That is why there are now starting to be all kinds of trials on the map – and of the recreational and medical kind.

The culture is in the middle of a massive, cannabis shift. The early market entry created by the political and economic clout of the early movers was important.

But as the world turns ever more green, local politics, and even more importantly, sovereign cannabis production and even export is increasingly a political issue in the room.

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.

The Fall of Farmako?

By Marguerite Arnold
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Chances are if you follow the European cannabis scene, particularly out of Germany, that you might have heard of a firm called Farmako. They have certainly, in the three quarters or so they have been in business, been given a lot of “good press.” They certainly worked hard to get into the headlines.

The problem is that no matter how scintillating initial claims were to many members of the media if not industry beyond, the bloom was quickly off the rose in the same circles. Since at least March, these grumbles have earned the company increasingly bad press. Industry insider complaints and background knowledge also began appearing in places like Manager (a top German business magazine), Vice and Business Insider Germany. Behind the headlines and insider quotes, however, quite a few people are admitting, even if off the record, that while initially impressive enough to be believed – at least on the surface – most of Farmako’s claims have panned out so far to be just hot air. And there have been a lot of them, not only from the sourcing perspective but also from the research, scientific development and certainly tech fronts.

The rebutting, editing and confronting of which has also set off a round of really bad press.

Live by the sword, die by the sword.

Further, apparently even the embarrassing fallout (and of course resulting reorganization) is not what it seems to be. Which of course has also been described so far publicly by the Frankfurt-based company itself, and Berlin-based tech funder, Heartbeat Labs. The former of which are so far unsuccessfully walking back just about every claim made over recent months. The latter of which has a great deal of embarrassing egg on its face on the compliance front.

When reached for comment by Cannabis Industry Journal, Heartbeat Labs responded via email that they had none.

While Farmako is struggling to regain the confidence of the industry if not regulators and appears to be trying to hang on to its distribution license, the story itself is also illustrative of many of the failings of the so-far establishing cannabis industry. In Germany and elsewhere. Coming as it does within the summer of scandal involving both larger companies and start-ups, bigger questions about industry practices, in general are in the room. If not the backgrounds of those boasting about “industry experience” (or even worse when caught, “oops I have none, really”). Highly stereotypical fixes so far have also not helped.

Everyone makes mistakes in a world where everything is new and one where the regulations are constantly changing. The problem with Farmako in particular, is that there were so many.All the bragging in the English and German language press had consequences.

The Story So Far

Farmako made headlines earlier this year when they issued a press release claiming that they had inked a deal to “import 50 tonnes of cannabis from Poland.” They further claimed, when contacted by CIJ that they stood by the story. At this point, their claims were clearly about a future delivery. However, Farmako CEO Niklas Kouparanis then embellished further on Bloomburg. Kouparanis claimed that they were already distributing product from Macedonia.

The reality of course was nothing of the sort. While Farmako was distributing product it had sourced from other places, no Macedonian product had ever crossed the border. But as May rolled into June, it was clear that there was something else afoot. All the bragging in the English and German language press had consequences. The German press had a field day with the storied and very colourful past of both Farmako founders. The regulatory agency, BfArM conducted an investigation. Kouparanis was out by the beginning of July.

Producers Do Not Trust Them

Cannabis industry insiders (both producers and distributors) who contacted CIJ about this story, but wished to remain off the record, confirmed that many producers who had initially heard of the firm in both Poland and Macedonia, in particular, were distancing themselves from Farmako. But the stories were not limited to Eastern Europe. In the UK, where Farmako had used a chunk of its investment from Heartbeat Labs to also open a London office, cannabis professionals expressed scepticism of almost all of the company’s claims including not just sourcing, but on the tech and R&D side. One senior executive in the Canadian industry said on deep background that he was tired of the lies from Diemer in particular, and never wanted to speak to anyone associated with the company ever again.

And clearly all was not well within Farmako itself, no matter the constant cheery optimism, if not “shucks we didn’t know” attitude of all involved when actually confronted or questioned about their behaviour – and or statements – particularly to the press.

What Has Been The Upshot To Date?

Kouparanis may be history but Diemer remains with the company. Although Heartbeat Labs claims this has nothing to do with the subsequent company re-org and Kouparanis’ departure, insiders in the industry claim otherwise. Further, several also suggested that any attempt on the part of Farmako to enter into contracts until July was fundamentally compromised by the actions of Farmako execs themselves.

Diemer certainly, has been remarkably candid at least in review about one aspect that most in the cannabis industry who have encountered him so far agree with. He has come clean in interviews that he knows very little about the legitimate cannabis industry. Perhaps that is also why he has continued to claim that there is no crisis at the company.

Both statements of course also raise questions about why he is still there.

The company is still in business although apparently finding it very difficult to source product.The appointment of a new CEO, Geschäftsfüherinen– a female and first head of any kind of cannaspecialist distribution company auf Deutsch, Katrin Eckmans is also interesting. Eckmans makes her apparent cannabis industry debute with a professional background that includes ex-im at Frankfurt airport, after the quick departure of Kouparanis. Particularly given that he co-founded the company with Diemer after leaving a year long stint at Cannamedical (the second indie cannabis specialty distributor in Germany, established in 2017 by David Henn). And she is apparently being hired for both complementary experience and her gender (which while refreshing in a still male dominated industry is widely also regarded as at this point fairly easy-to-spot window dressing conveniently proffered to regain confidence of investors if not customers in a gender-friendly twist when a company or organization hits an existential crisis).

Calling in even a highly competent if inexperienced in the cannabis niche woman, in other words, even in this industry, does not necessarily “fix” things. This goes from company culture to critical relationships within the industry (upon which distributors like Farmako depend on at this point).

For now, at least, Farmako, and its financier in Berlin appear to have deflected criticism of their efforts although those who have had interactions with the staff are placing bets on when the doors in both Germany and the UK will shutter.

Farmako’s detractors may yet also lose such wagers. The company is still in business although apparently finding it very difficult to source product. Not, in this case because they cannot find it – but rather because producers are flat out refusing to work with them.

In the meantime, particularly other German canna specialty distributors are taking a lesson from this story. If Farmako survives, in other words, it will do so by overtaking the competition that has sprung up all around them – which is not only unburdened by the baggage, but is also determined not to make the same mistakes.

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European Cannabis Summer Roundup

By Marguerite Arnold
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There have been many significant developments this summer in Europe that will shape the debate about reform and the legal cannabis market that trails it, for at least the next year. Here is Cannabis Industry Journal’sroundup of our biggest events and trends over the summer so far.

Medical Sales Across Europe Are Slow

In Germany, it is easy to maintain a fairly ballpark understanding of patient count. Find the number of prescriptions issued in the trade press and divide by four. Everywhere else, however, the true realization of what is going on across Europe is slowly starting to hit everyone outside producers wanting to know what is going on.Establishing territorial footprint has been what the race in Europe has been all about since mid 2016 for the Canadian LPs so far.

This is going to start to hit stock prices soon beyond the wobbles already evident in the market thanks to this summer’s breaking industry scandals (CannTrust, lawsuits in every direction) to lack of financial performance for investors (Bruce Linton’s firing from Canopy). It is becoming increasingly obvious to everyone that just because a public Canadian company issues a press release about a (cultivation, import, export or processing) “event” does not mean anything other than a slew of social media telling everyone about it. The frustration with “forward looking” statements has hit European investors big time, from the retail to the institutional kind.

Despite a lot of press releases in other words, which clearly show market penetration, there is not much else going on from the sales perspective when it comes to growing those first numbers. Establishing territorial footprint has been what the race in Europe has been all about since mid 2016 for the Canadian LPs so far.

However, from an industry, if not investor and of course, patient perspective, patient numbers are what really count. And unlike Canada, where patients remain the biggest existential threat to the industry, the same industry may not sign them up or ship to them directly in Europe. For several reasons.

Germany is still the only country in Europe with a significant patient count, and while growing, slowly, is still a group where 2/3 of patients obtain dronabinol. It should shock nobody that the most accurate patient count right now in the UK is hovering somewhere under 20. For the whole country, 9 months after the law changed. While the peculiarities of Brexit are also in the room, this is so far, compared to U.S. state markets, Canada, Israel and Germany before it, pathetic.

The Industry Says It Supports Patients…But Does It?

There are several levels to this debate which start with the still appallingly high level of price gouging in the room. 2019 and certainly this summer is a time when the Canadian companies are clearly learning that European governments negotiate for drugs in bulk. Even (and especially in the near future) this one. See the difference between the EU and the US.

UKflagThe level of industry promotion vs patient access recently reached a new nadir this summer when it emerged that despite a great deal of interest, more people showed up (by far) to the week-long cannabis industry conference (European Cannabis Week in London in June) than there are legitimate patients in the UK right now.

That is about to change, but so far, industry support for trials has not materialized. When the various trials now being planned do get going, look for new battles over a couple of issues, starting with patient access to and control of their medical data.

Novel Food: The Regulation That Keeps On Giving

The issues involved in this discussion are complex, certainly by North American standards. This of course starts with the fact that there is no such regulation on the continent. But also rapidly bleeds into puncturing the amount of hot air entrepreneurialism there is in the room.

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

The CBD market in Europe that everyone got so excited about in investor releases, in other words, is basically dead for the time being. Yes, there are a few smart niche players weaving around the regs, but it is a full-time job.

Here is the reality: Since Christmas last year when Austria put the kabosh on all products containing the cannabinoid CBD, several major countries have weighed in on the issue. It is not going away. And it is here to stay, even after recreational.

Political Advocacy Is Stirring In Europe

Whether it is the vagaries of Brexit, the discussion across the continent about how the EU will work together, right wing populist screeds about “too much regulation” or national elections, cannabis is in the room from now until the end of at least 2021 as one of the hottest global political issues under the sun. That includes of course, a discussion about global climate change, sourcing, pricing and resource use so far unaddressed but rapidly looming.

german flag
Photo: Ian McWilliams, Flickr

Further, patients are still having a voice – whether it is making sure that their children obtain imported CBD, or that they can obtain their own THC prescriptions without going bankrupt or having to solicit in the black market.

Cultivation Bids Looming?

One of the surest signs yet that the German authorities at any rate, are in no mood to solve the cultivation issues still on the ground and the bid itself, is that the government just renegotiated, for the second time since last fall, the amount of medical cannabis to come over the Dutch-German border. Who is going to go next? With the Italian hybrid now done and dusted, Poland is likely to be next. And when that happens, expect a raft of similar initiatives across Europe. But probably not until then.

And in the meantime? Distributors are looking for product. The demand is clearly there. But across Europe this summer there is a clear sense that the hype machine that has been the industry’s mouthpiece is at minimum overenthusiastic about the bottom-line details behind it all.

Poland Pushes Forward On Reform

By Marguerite Arnold
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Given all the fuss about newly opened markets in Europe of late (see all the hullabaloo recently in the UK), it would be remiss for anyone in the industry to forget about Poland.

The Eastern European country that shares a large part of its border (if not recent history and long cultural influence) with Deutschland has been proceeding slowly into the cannabis space for the last couple of years.

There are a couple of similarities (and differences too) about the market development in the country to its Teutonic sister to the West as well as the emerging fight over access that is sparking patient revolutions all over the continent now.

A Brief History Of Polish Cannabis Reform

Like other culturally conservative places (see state reform in the United States in places like Georgia), Poland has moved towards reform in a way that may make political sense, but has left patients in much the same boat as British ones. Reform began happening without access as of late 2017.

Polish Flags Image: włodi, Flickr

Poland, or so the joke goes in Germany, is Deutschland’s “trailing sister,” on most things, and cannabis reform in some ways, is absolutely following that pattern. But it is not exactly analogous, starting with patient access. In fact, the first opening of the market did not touch import much less cultivation. It only authorized patients to cross borders in search of their medication. No matter the high cost involved. And of course, the still dodgy proposition of returning across a border with a highly stigmatized narcotic product.

Fast forward a year? Many of the major Canadian cannabis companies had achieved some sort of import (mostly of small amounts of the drug and mostly to single hospitals). See the announcement of Aurora last October on the same day that the Polish government announced a change in the law that they had imported in bulk to a hospital.

But what is going on now, particularly with a growth in acceptance of the medicinal impact of the drug across Europe? And will the Poles, like the Germans, launch a domestic cultivation bid anytime in the near future? Not to mention learn the lessons that so far have continued to stymie German domestic cultivation as well as frustrate a smooth supply chain if not operations on the ground?

The Market Is Coalescing

According to Andrew Makatrewicz de Roy, managing director of Bearstone Global, a market research and investigative firm moving into the cannabis space, Poland has one of the more progressive laws in Europe, but still is lagging behind other countries in terms of organisation and a political lobbying movement.

“There is a lot of vibrancy in the market, but we want to make sure that there is an initial forum where the market can meet and discuss the industry here”.There are also a few (low volume) transactions taking place.

However, as in other places (see the UK in particular), there is a lot of heat if no fire yet behind the scenes. Both individuals and companies are starting to appear who will help build a wider ecosystem in the cannabis space.

As in other countries in Europe, despite the market potential, there is still a general political lag in further development of the industry. Perhaps because of complications in the German market. And almost certainly because of complications with German reform and its own cultivation bid. There have been rumours of a Polish bid circulating for at least a year. Licensed cultivation is beginning to take place.

In response, Makatrewicz de Roy is moving to establish one of the first industry conferences in the country in October. In late July, he also held the first precursor to the same – an online streamed event that attracted 70 major thought leaders from the industry including many members of the political class, producers and distributors (including some of the biggest Canadian ones), doctors and patients.

“We want to build an ecosystem,” de Roy said. “There is a lot of vibrancy in the market, but we want to make sure that there is an initial forum where the market can meet and discuss the industry here”.

european union states

Why International Trade Agreements Are Shaping The Cannabis Industry

By Marguerite Arnold
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european union states

If you have wondered over the past several years, why the big Canadian companies (in particular) are following the global strategy they are, there is actually a fairly simple answer: Newly implementing trade agreements, particularly between Europe and North America.

More specifically, they are highly technical trade agreements that are also called Mutual Recognition Agreements, (or MRAs).

In fact, look at the schedule of the MRA agreements signed between the U.S. and individual EU countries over the last several years, and it also looks like a map of the countries that have not only legalized at least medical cannabis, but where the big Canadian companies (in particular) have begun to establish operations outside of their home country.

But what is going on is actually more than just CETA-related and also will affect cannabis firms south of the Canadian-U.S. border.

All of these swirling currents are also why the most recent MRA to come into full force in July this year, between the U.S. and Europe, is so interesting from the cannabis perspective. Even before federal reform in the U.S. If this sounds like a confusing disconnect, read on.

What Are MRAs?

MRAs are actually a form of highly specialized trade agreement that allow trading countries to be certain that the pharmaceuticals they purchase from abroad are equivalent to what is produced at home. This includes not only ingredients but processing procedures, production plant hygiene, testing, labeling and more.

When it comes to the  EU-US MRA agreement, this means that individual states of the EU can now recognize the American Food and Drug Administration (or FDA) as an effective federal regulator of American pharmaceutical production that is equal to the procedures in Europe. US GMP standards, in other words, will be recognized as equal to those of EU states.

This will now also, by definition, include GMP-certified medical cannabis formulations.

What is so intriguing, however, is how this development will actually place certain American (and Canadian) manufacturers in a first place position to import cannabis into Europe ahead of the rest of the American cannabis industry.

What Are Mutual Recognition Agreements All About?

One of the most important quality and consumer safety aspects of establishing a clean supply chain is tied up in the concept of GMPs (Good Manufacturing Practices). These are procedures, established by compliant producers of pharmaceuticals, to ensure seed (or source) to sale reliability of the medication they make. In the cannabis industry, particularly in the advent of Canadian-European transatlantic trade in cannabis, this has been the first high hurdle to accept and integrate on the Canadian side.

GMPIf European countries recognize a country’s GMP certifications are equivalent to its own, in other words, and cannabis is legal for export, a country can enter the international cannabis market without facing bans, in-country inspections and the like. In the interim, imported products still have to be batch tested until the agreements are fully accepted and operational.

Israel, for example, already had an MRA with the EU, and medical cannabis is legal in the country. However, Israel was prevented from selling cannabis abroad until a legislative change domestically, passed on Christmas Day.

That is why the MRA agreement between the US and EU with Canadian companies in the middle also put both Israeli and U.S. firms at an extreme disadvantage in comparison. Both in entering the market in the first place, and of course associated discussions, like the German tender bid. That is now changing- and as of this year.

A Specialized Map Of Global Medical Cannabis Exporters

Ironically, what the new US-EU MRA could also well do is create a channel for pharmaceutical cannabis from the United States to Europe (certainly on the hemp and CBD front) just as Israel is expected to enter the international cannabis export industry (later this summer or fall). It could well be also, particularly given the Trump Administration’s tendency to want to not only “put America first” if not pull off “a better deal” in general and about everything, that this is why President Trump offered the delay to Israel’s president Benjamin Netanyahu in the first place.

Regardless of the international individual developments and subtleties however, what is very clear that from the time the first bid stalled in Germany in the summer of 2017 until now, the U.S.-EU MRA has been in the room even if not named specifically as a driver.

For example, the FDA confirmed the capability of Poland and Slovenia to carry out GMP inspections in February of 2019.  It was only last fall that Aurora pulled off its licensing news in the former (on the same day licensing reform was announced by the government). Denmark was recognized in November of last year during the first year of its “medical cannabis pilot progam.” Greece was recognized in March 2018. Italy, Malta, Spain and the UK came online in November of 2017.

Overlay this timetable with a map of cannabis reform (and beyond that, cannabis production) and the logic starts to look very clear.

The upshot, in other words, is that while cannabis still may be “stigmatized” if not still “illegal” in many parts of the world, more generalized, newly negotiated and implementing, specialized global trade agreements between the US, Europe and Canada in particular have been driving the development of certain segments of the cannabis industry globally and since about 2013.

The Biggest News?

As of this year, as a result, expect at least from the GMP-certified front at least, that such international trade will also include medical cannabis from the U.S.

Want an example of the same? First on that list if not early in the game will now undoubtedly be Canadian-based Canopy Growth, with Acreage on board, headquartered in New York.