Tag Archives: public

December 12, 2018

Wayland Group Makes European Waves

By Marguerite Arnold

While it is news that Wayland Group has just signed a definitive production agreement in Italy with a local CBD producer (Factory S.S. – a subsidiary of Group San Martino), it is not that Wayland has been establishing itself in Europe for the past two years.

Nor is it surprising that the new Italian plant (named CBD Italian Factory) will feature world-class cleantech production technology (fuelled by biogas). Even more intriguingly the joint venture also includes a relationship with the University of Eastern Piedmont, which is developing a research center to study the development of cannabinoid products for both animals and people.

Why not?Europe is far from the only region on Wayland’s global expansion map.

Wayland has been establishing itself in an interesting way as the company expands globally that distinguishes its corporate strategy from its other cannabis competitors. It was only April of this year, after all, that Wayland received its ex-im license to ship dried cannabis flower from Canada to Germany. At a time when the company also used to be known as Maricann. That corporate name change happened this year too, as the company continues to build its global brand in very interesting if far-flung markets.

A Busy Fall So Far

Europe is far from the only region on Wayland’s global expansion map. In the first week of November, in fact, the company also signed an agreement to buy 100% of Colma Pharmaceutical SAS, a Columbian-licensed producer of THC. This will be an outdoor THC play, and produce two crops a year. They also just announced a land acquisition in Argentina to begin cultivating cannabis there as well.

In October, the company announced not only plans to raise $50 million, but also brought on three new board members with significant European legal and business experience (including M&A and access to equity markets). This includes the company’s first female board member, Birgit Homburger, based in Berlin.

And this is on top of its record-breaking hemp harvest in Germany, which outperformed internal forecasts by a factor of 2. This is an important benchmark domestically, as German cultivation licenses will require successful firms to prove they can bring large quantities of flower to market successfully and repeatedly.

A Marked Interest In Cannatech

Like many firms, Wayland is already showing a marked interest in new cannabis technologies, in particular, innovative cultivation solutions, but not limited to the same. In August, the company unveiled its first product launch in Europe – a soft gel with 25mg of CBD that utilizes multi-patented technology allowing optimum absorption and bioavailability. Its German unveiling is significant because the insurance and medical industries here are unclear about dosing. That lack of clarity is also now holding back policy and underwriting issues, including the approval of medical cannabis in the first place.

These capsules, a non-medical product and marketed under the name “Mariplant” were first shipped to pharmacies in both the Munich and Cologne area in the late summer.It has continued to expand both its Canadian and foreign as well as tech expansions ever since.

The Road So Far

The company, which started with a facility in Langton, Canada in 2013, earned a license from Health Canada to sell cannabis extracts in early 2016. By December of that year (a good four months before the German cultivation bid was announced) Maricann GmbH was formed in Munich. By March, the month before the cultivation bid was first announced, the company began retrofitting the Ebersbach facility, near Dresden.

In April of 2017, Maricann went public. It has continued to expand both its Canadian and foreign as well as tech expansions ever since.

While not a “high flier” on the stock market (like competitors Tilray, Canopy and Aurora), the company is carefully plotting its position in a global market that is still very much a “blue ocean” opportunity.

It is also carefully plotting a path into both production and delivery systems that are optimized by tech in a universe that is rapidly upgrading not only its image, but finding ways to prove if not justify medical efficacy.

December 10, 2018

A Busy 4th Quarter Heralds An Amazing Cannabis Year Globally

By Marguerite Arnold

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In retrospect, when the cannabis history books are written, 2018 may come to represent as much of a watershed year as 2014. Much has happened this year, culminating in a situation, much like at the end of the first year of modernization, where great victories have been achieved. But a long road to true acceptance and even basic and much broader medical use still beckons. Even if the new center left ruling coalition party in Luxembourg has just announced that recreational cannabis reform is on its agenda for the next five years.

This is a quick and by no means a full review of both fourth quarter activity globally, and how that ties into gains for the year.

Canada Legalizes Rec Sales

Beyond all the other banner headlines, October 17 will go down in history as the day that Canada switched the game.

Will 1017 replace 420? Not likely. But it is significant nonetheless.

What does this mean for the rest of the industry (besides international border checks and lifetime bans for Canadian executives and presumably others traveling into the U.S. to cannabis industry conferences at present)? For starters, a well-capitalized, public industry which is building infrastructure domestically and overseas like it is going out of style.

This is important for several reasons, starting with the fact that the big Canadian LPs are clearly not counting on supplying Europe from Canada for much longer. Why? The big European grows that were set up last year are starting to come online.

So Does California…

And other significant U.S. states (see Massachusetts this month and Michigan) are following suit. However the big issue, as clearly seen at least from Canada and Europe, is there is no federal reform in sight. That opens up a raft of big complications that so far, most U.S. firms have not been able to broach. That said, this situation is starting to change this fall, with two U.S. firms entering both Greece and Denmark, but in general, a big issue. Canadian firms are still trying to figure out how to both utilize the public markets in the U.S. without getting caught in detention when crossing the border.the U.S. is continuing to be a popular place to go public for Canadian firms

Regardless, the U.S. is continuing to be a popular place to go public for Canadian firms, who are also looking for access to global capital markets and institutional capital. Right now, Frankfurt is off limits for many of them. See the Deutsche Börse. That said, with the rules already changing in Luxembourg, one firm has already set its sights for going public in Frankfurt next spring.

The German Situation

Like it or not, the situation in Germany is key to the entire EU and increasingly a global enchilada, and no matter where companies are basing their cultivation sites at this point, there are two big gems in the European cannabis crown. Deutschland is the first one because of the size of the economy, the intact nature of public healthcare and the fact that the German government decided to mandate that sick people could get medical cannabis reimbursed by their public health insurer.

Ironies abound, however. In the last quarter, it is clear from the actions of the Deutsche Börse that Frankfurt is not a popular place to go public (Aurora went public on the NYSE instead in late October).

The cultivation bid was supposed to come due, but it is now likely that even the December deadline might get pushed back again, interminably at least until April when the most recent lawsuit against the entire process is due to be argued.

In the meantime, there is a lot of activity in the German market even if it does not make the news. Distribution licenses are being granted all over the country (skip Berlin as there are already too many pending). And established distributors themselves, particularly specialty distributors, are increasingly finding themselves the target of foreign buyout inquiries.

There are also increasing rumours that the German government may change its import rules to allow firms outside of Canada and Holland to import into the country.

The German market, in other words, continues to cook, but most of it is under the surface a year and a half after legalization, to figure things out.

The UK

Next to October 17, the other date of note this fall of course was November 1. The Limeys may not have figured out Brexit (yet). But cannabis for medical use somehow made it through the national political fray this summer. Hospitalized children are compelling.

Now the question is how do other patients obtain the same? The NHS is in dire straits. Patients must still find a way to import the drug (and pay for it). And with newly imposed ex-im complications coming Britain’s way soon, there is a big question as to where and how exactly, patients are supposed to import (and from where). All looming and unanswered questions at the moment.

But hey, British doctors can now write prescriptions for cannabis.

Greece and Malta

Greece and Malta are both making waves across Europe right now. Why?

The licensing process that has continued into the fall is clearly opening up inexpensive cultivation in interesting places. Greece is growing. Malta, an island nation that is strategically placed to rival Greece for Mediterranean exports across Europe is still formalizing the licensing process, but don’t expect that to last for long.

Look for some smart so and so to figure out how to beat Brexit and import from Malta through Ireland. It’s coming. And odds are, it’s going to be Malta, if not the Isle of Mann that is going to clinch this intriguing if not historical cultivation and trade route.

Poland

Just as October came to a close, the Polish government announced the beginning of medical imports. Aurora, which went public the same week in New York, also announced its first shipment to the country – to a hospital complex.

Let the ex-im and distribution games begin!

It is widely expected that the Polish market will follow in German footsteps. Including putting its cannabis cultivation bid online whenever the Polish government decides to cultivate medical supplies domestically. The country just finalized its online tender bid system in general.

Does anyone know the expression for “pending cannabis bid lawsuit in Warsaw” in Polish?

Notable Mentions

While it gets little press outside the country, the Danish four year experiment is reaching the end of its first year. While this market was first pioneered by Canopy/Spectrum, it was rapidly followed by both Canadian LPs and others entering the market. Latest entrant this quarter? A tantalizingly American-British conglomerate called Indiva Ltd. as of November 21.

Italy is also starting to establish a presence in interesting ways as multiple firms begin to establish cultivation there.

There are also increasing rumours and reports that Israel might finally be able to start exporting next year. That will also disrupt the current ecosystem.

And most of all, beyond a country-by-country advance, the World Health Organization meeting in early November and in the early part of December is likely to keep the pressure on at a global level for rescheduling and descheduling the cannabis plant.

This in turn, is likely to set the stage as well as the timeline for rec use in Luxembourg. Look for developments soon.

A busy time indeed. Not to mention a quarter to end a very intriguing year, and certainly destined to sow returns for years to come, globally.

November 21, 2018

The UK Starts Prescribing Cannabis

By Marguerite Arnold

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

A Real Victory Or Another Stall?

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

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

Brexit Is The Bigger Worry, So What About Cannabis?

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

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

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

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

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

Why?

National Healthcare Is Still Functional In Europe

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

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

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

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

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

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

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

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

November 8, 2018

Aurora Cannabis Burnishes Its Medical and Recreational Game

By Marguerite Arnold

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It has been a busy couple of weeks for Aurora executives, no matter what else is going on. And all signs indicate that Aurora is not only keeping its pressure on major competitors Tilray and Canopy in particular, but playing a highly sophisticated political and global game right now.

Where the company in other words is not “winning,” Aurora is clearly establishing an effective global footprint that is ensuring that it is at least keeping pace with the speed of market development and even breaking new ground more than once recently.

The Aurora Tour Of The Global Stage In Late October

Forget what is going on in Canada for a moment, if that is possible. Global investors, certainly, in the aftermath of the post legalization glow, certainly seem to be. So are the big LPs like Aurora. They are looking elsewhere, to medical markets and to Europe, for more clarity on where the market will go.

Aurora certainly has been, even if unwittingly, caught in the middle of that conversation, in part because of where and how the company has been positioning itself lately.

Last time around, the company announced it was in the top ten finalists. This time, it is also expected to do well.That said, what Aurora is doing, like everyone else in this space right now, is playing a global game of hopscotch in terms of both raising equity and then where that capital gets spent. Aurora’s recent victories, certainly this year, indicate that it will continue to be a formidable presence in the room.

For now, however, it is clear that retail investors are suddenly cautious and institutional investors are clearly still very leery. So where does that leave Aurora?

Road Trip To Germany

CEO Cam Battley at a conference in Frankfurt

Consider these interesting series of events. Canadian recreational reform “goes live” on October 17. Instead of sticking around Canada, however, CEO Cam Battley spoke at a recent investor road show for the Canadian public cannabis companies over the weekend of October 21-22 in Frankfurt, Germany. Three well placed, but anonymous industry sources confirmed to Cannabis Industry Journal that a meeting between all the major cannabis companies in Frankfurt over the weekend (including not only Aurora, but Wayland Corporation, Canopy, Aphria, Green Organic Dutchman and Hexo) was either planned or attempted with federal Minister of Health, Jens Spahn sometime during this period of time.

Even more interestingly, this conference had clearly been planned to coincide with the original due date of the new German cultivation bid, in which Aurora is also well positioned. Last time around, the company announced it was in the top ten finalists. This time, it is also expected to do well.

Whenever the bid finally is decided, that is.

As of October 23, the day of the IPO in New York and the day after the conference in Frankfurt concluded, news circulated that the bid had been delayed a second time, with rumours of further lawsuits swirling.

IPO In New York

That day, Tuesday October 23, Aurora announced its IPO on the NYSE, not in Frankfurt after announcing this possibility the month before. This is significant, namely because all of the cannabis companies listed here are essentially in what is known, colloquially, auf Deutsch, as being “in the dog house.” Namely, financial regulators are looking closely at listed companies’ profiles on the exchange. If a listed company is too associated with the recreational industry, trades will be barred from clearing by Clearstream, the daughter company of the Deutsche Börse and located in Luxembourg. Earlier in the summer, all of the major LPs were briefly on the restricted list.

The next day after Canadian recreational reform became reality in fact, on October 18, the Deutsche Börse made the latest in a series of comments regarding its intentions about their future decisions on the clearing of cannabis stocks. Namely, that at their discretion, they can prevent the clearing of stock purchases of a cannabis company at any time. In other words, essentially delisting the stock.

Aurora, with its ties to mainstream, “adult use” in North America, is absolutely affected by the same, certainly in the short term. Including of course, all those rumours about Coke’s interest in the company (still unconfirmed by both Aurora and Coke).

Looking Toward Poland

Yet here is where Aurora stays interesting. Just two days after its debut on the NYSE, the company announced that Aurora would be the first external company to be allowed to import medical cannabis to Poland (to a Warsaw hospital and pain clinic). The same day, incidentally, as the Polish government announced that medical cannabis could indeed begin to be imported.

This came after a stunning move earlier in the year when the company bagged the first medical cultivation license in Italy.

Clearly, Aurora is keeping good, if not powerful, company. And that will position it well in the long run. Even if, for now, its IPO on the NYSE got off to a less than powerful start.

Why Does Aurora Stand Out?

Like all the major cannabis companies on the global stage right now, Aurora understands what it takes to get into the room (wherever and whatever that room might be) in politically and regulatorily astute ways, much like Tilray. Both companies are also very similar in how they are continuing to execute market entry and public market strategy. Tilray, it should be remembered, went public over the summer, in North America too, right around the announcement of the final recreational date in Canada.

And while Aurora is clearly playing a still retail-oriented stock market strategy, it has proved over the last 18 months that it is shaping up to be a savvy, political player on the cusp of legislative change in multiple European states so far. They are courting the much bigger game now of institutional investment globally.

July 17, 2018

Tree of Knowledge Inc. Acquires 5% of NYSK Holdings

By Marguerite Arnold

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The Canadian cannabis community has just gotten a new member. Tree of Knowledge, Inc. just became Canada’s newest public cannabis company. The company is also planning on raising $10 million in private placement capital. According to the company’s most current pitch deck, the planned use of proceeds includes $6.5 million for new capex expenditures in Canada and Macedonia plus new product development. The rest is slated for patient and doctor outreach including via social media, new hires and working capital.

Who Is Tree of Knowledge Inc.?

Founded originally in Washington State in 2015, today TOK has a global market presence with CBD products on three continents and is already positioning itself to run with the big boys on the international scene, just on its CBD footprint. In the online marketplace, they are doing business as EVR CBD. That includes state markets in the United States, Europe, South America, Australia and China.

The company also has a distinguished board that includes doctors to former professional sports stars. As of April, the company engaged in a reverse merger with Courtland Capital, a Nevada subsidiary company.

And as of July 2018, the company purchased 5% of NYSK Holdings – a rapidly establishing Macedonian start-up with an eye to the European market – starting with Germany.

Who Is NYSK Holdings?

NYSK Holdings is absolutely on an upward trajectory. The company, founded by Americans with strong ties to the home country along with local partners, broke ground in Skopje, Macedonia last year.

Company principals have been exploring entry into the European market ever since (Macedonia may be in the Balkans, but it is technically not part of the EU). Significantly, this also means that producers there are used to meeting European specs for import purposes, if not hopeful EU inclusion.

Like other EU partners in the west however, (notably Spain and Portugal) labour rates are also much lower than in Germany. This creates a new avenue into the EU and the German market, which is now going to be an import-dominant one until 2020.

What is even more interesting about NYSK? They produce GMP-certified product – both THC and CBD. They have been looking for partners for most of this year. They also had a booth at the ICBC in Berlin, an experience that they found highly satisfactory.

Their strategic importance to TOK is also large. NYSK brings, for the first time, THC products and high-tech processing capacity adjacent to the European Union to a firm with a global footprint.

They might, in other words, have been Europe’s most under-priced production facility. Don’t expect that to last long.

What Is Interesting About The Move

One glance at TOK’s founders, board, andadvisors is enough to establish that this is a company of mostly older Gen X and younger Boomer heavy hitters from other industries who are pooling resources and knowledge to step into a global medical cannabis space. Smartly.

For example, the focus on dosing control, trials and an operational, GMP-certified production facility in Macedonia, plus their Canadian footprint, makes TOK and their partners well suited for “European invasion.” So does their first product – a CBD-based sleep aid.

The cultivation of cannabis at the NYSK facility in Macedonia

This creates, in other words, a company with Canadian and Macedonian production, American entry and global reach, including into countries other cannabis companies have so far not breached (see China), with an interesting, low-cost, lower risk entry profile. Their expanded market entry is also occurring right at a time when Europe, including the about to be Brexited UK, is now moving forward on medical reform sans very much local production.

Perhaps this comes from the experience of the principals. TOK Cofounder Michael Caridi started his involvement in the cannabis industry in Washington State in 2014 after a successful real estate and promotions career on the East Coast (New York) and experience in ex-im. However, Caridi rapidly grew disillusioned with the state’s focus if not an obsessionon a more recreational space than medical users. He and Brian Main, now president of US operations, founded TOK a year later. Current CEO, John-Paul Gaillard, has a history that includes the creator of the Marlboro Classics brand and a stint as the CEO of Nestle Nespresso who put the idea on the map if not kitchen counters globally.

No newbies here when it comes to global market strategies, penetration and experience.

Both companies to watch, for sure.

April 3, 2018

German Court Stops Pending Cannabis Cultivation Bid On Technical Fault

By Marguerite Arnold

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In a move that seems to shed more doubt than certainty on domestic cannabis cultivation and the date that it will start auf Deutschland, the Higher Regional Court (or OLG) in Dusseldorf formally stopped the pending bid procedure for the first crop on March 28th. BfArM, the federal agency in charge of regulating all narcotic drugs, initiated that procurement bid. The tender bid was launched after the German Parliament and federal legislators changed the law last year to mandate that cannabis be available via prescription, and further that public health insurers were required to cover it.

That bid announcement was supposed to come as early as last September. Criticisms about the process and requirements began immediately thereafter. For starters, the bid’s requirements excluded all German-only respondents to the bid and left both Canadian and Israeli firms in the front positions to obtain these valuable licenses. However, there were other gripes, including the fact that the amount of cannabis requested (about 6.6 tonnes) was far too low to even begin to meet real demand. Namely, there are easily 1 million German patients who could qualify for the drug.

In the space of the last year, in fact, the number of “official” German cannabinoid patients has shot up from 1,000 to about 15,000. That said, the top three covering insurers also report a mere 64% approval rate. This means that there are more doctors writing prescriptions than insurers are covering.

That, at least for patients and their advocates is a bit of good news despite the blow that any delay in domestic production has created. Doctor resistance to prescribing cannabinoids even when there are no other alternatives has been used as an excuse in many media reports for the speed of market development. That clearly is not true. The attitude on the ground in Deutschland is rapidly changing.

That bid announcement was supposed to come as early as last September. At that point, however,the agency was then forced to extend the response date, which it did, but apparently not for long enough.

Throughout the fall, it was impossible to understand, from any direction, what was going on. Four lawsuits against the bid were launched around September, each with differing complaints that ranged from criticizing the agency for the lack of extension and response time to monopolistic business practices.

The OLG dismissed all but the criticism about the extension.what this decision has done most clearly is slowed down the production of domestically grown medical cannabinoids

The one clear thing to come out of Düsseldorf? BfArM has been banned from awarding its contract to anyone to produce medical cannabis in Germany starting in 2019. The first letters to bid finalists announcing the bid had been canceledbegan arriving the day after the court’s decision.

Reading Between the Lines

There have been rumors since last fall that the bid would end up in such waters. However,all the major producers widely suspected to have applied for the bid also began announcing themselves as finalists in press releases. For this reason, the official line from everyone that the bid was still, in fact, on track.

Nobody could understand why anyone would want or even be able to halt the production of direly needed, locally sourced, high-gradecannabis. That includes BfArM, which made an impassioned response, via their attorney to the OLG in Dusseldorf. Attorney Heike Dahs warned the court that any interruption of the bid was “very bad for the care of patients.” He was similarly pessimistic about the ability to begin production domestically by the previously set 2019 deadline.

In fact, what this decision has done most clearly is slowed down the production of domestically grown medical cannabinoids (although potentially not by much) while giving officials at BfArM a rather nasty black eye that might yet lead to further legal action.

It also means that there will be another bid process. In the meantime, the ex-im market is, if anything, taking off.

This is a Shock And Opportunity – but not a Surprise

No matter the opinionated emails and IM’ing going on in several languages all over the world right now about the implications legally in the future, the major producers are all taking this in stride. And appear to be well positioned to respond.

According to Dr. Pierre Debs, the managing director of Spektrum Cannabis (the global medical brand of Canopy and based just south of Frankfurt), who responded to CannabisIndustryJournal a day after the court decision, the company is not affected by this development. “Spektrum has a steady and constant supply and we do not anticipate any problems supplying patients through their pharmacies,” he says. Debs received the first German medical import license to bring Canadian cannabis into the country a mere two years ago and has continued to carve a leading path in the discussion across Europe. “In addition to our supply from Canopy Growth Corp, our partnership supply agreement with Alcaliber in Spain will see Spektrum importing sun-grown medical cannabis products starting towards the end of the summer,” says Debs.

But it is not just the big guys in the mix anymore. And there are many who see opportunityto a situation, which is frustrating.“As the second-largest country by population in Europe and a leader within the EU, the German market represents a new frontier for the cannabis industry in general in the region,” says Zlatko Keskovski, chief executive officer of NYSK Holdings, a Macedonian firm now in its second harvest of GMP-certified cannabis and holding EU export rights.

For such firms, even though NYSK is a surprise entrant to the conversation this year and outside the EU, the current situation represents an unbelievable chance to enter a market literally starving for qualifiedproduct. The firm is currently looking for German distributors who cannot access medical grade cannabinoids via other routes including attending the ICBC in Berlin in April. “This year’s ICBC looks to be a seminal moment for NYSK,” says Keskovski. “We have taken the appropriate steps to ensure our high-quality standards have led to products that our customers, and eventually patients, can rely on. We look forward to the chance to showcase our achievements that we’ve worked so hard for. The ICBC will also present us with the opportunity to meet with potential distributors and future partners.”

German Patients are Going to be on the Front Lines of This Discussion

The difficulties that German patients have already faced in obtaining a drug that is now legal in their own country for medical use (and even for recreational purposes across an open border in Holland) are legion. While to a certain extent, German patients are in the same boat as patients elsewhere and their problems, in fact, there are still huge access issues that remain. For starters, the drug is much more expensive here, so those without health insurance approval face bills of about $3,000 per month. Why the eye-watering price? All medical grade cannabis is still imported, although increasingly this is now just via other EU countries, not just from Canada.

“One of the reasons we organized the national German Patient Roundtable is to give patients a voice in all of this supply and demand discussion and to help BfArM and others formulate workable solutions for all,” responded Philip Cenedella IV when reached for a response by CIJ. Cenedella, an American expat and the organizer of the Roundtable, a nationally focussed, umbrella group that is kicking off its campaign this year, spoke for many who are far from court and boardrooms where the decisions are being made.

Philip Cenedella, pictured left, at the Deutsche Hanfverband (DHV) conference in Berlin last November.
Photo: @MedPayRx, Instagram

“While there are very talented firms who will now take up this discussion with the government and reissue a response for the tender, what we continue to see on the ground is that patients simply do not have the access granted them in the law which was passed over a year ago,” Cenedella says, with more than a note of frustration. “We again are calling on all government officials, industry executives and patient advocates to band together to immediately establish workable protocols that directly help the patients.”

Indeed, despite the frustration and delay, if not new costs and opportunities that this decision creates, one thing is very clear on the ground here. The current status quo is unacceptable. That alone should also put pressure on the powers that be to remedy the situation as quickly as possible. And via several routes, including widening import quotas or even issuing new licenses as a new solution to domestic cultivation is implemented.

“Patients are not being served and do not have access to a medicine that has been proven to improve lives,” says Cenedella. “Our simple request is for BfArM to finally invite patients into their discussions, to work with patients to formulate workable cultivation and distribution solutions, and we humbly request that this happen now before they go down another dead-end road, ending in another court defeat, and resulting in even more delays to the patients that are still lacking the care afforded them by the German Federal Court’s decision of 2017.”

February 12, 2018

Head of German Police Union Calls for Official Decriminalization of Cannabis

By Marguerite Arnold

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Facing the same conundrum as police everywhere after the start of a medical market only this time with federal authorization, the head of the German police union has called for recreational use of cannabis to also be decriminalized.

On the first Monday of February, the head of the BDK – the Association of German Criminal Officers told The Bild (sort of like the New York Post but a national “tabloid” here) that his group, the largest organized union of German police officers, favoured a change in German cannabis laws. Andre Schulz argued that the current laws stigmatized those charged with minor amounts and created opportunities for “criminal careers to start.”

“The prohibition of cannabis has historically been seen as arbitrary and has not yet been implemented in an intelligent and effective manner,” says Schulz. “My prediction is that cannabis will not be banned for long in Germany.”

Why this sudden pronouncement? It is actually not all that sudden and has been long in the offing. One of the largest contingents at both the ICBC and the IACM last year (the biggest cannabis-focussed business and medical conferences in Germany) were police officers from California and Deutschland. And all were singing the same tune.

However beyond a realistic assessment of changing political reality, there are actually several other concrete reasons for not only the statement but the timing of it. In a country where patients can now pick up bud cannabis from the local apotheke (which is that easy for some, although it is still hard for most), the police have the unappetizing prospect of potentially arresting patients. On top of that, the idea of someone being arrested for CBD flower (rather than THC) gives the German polizei plenty of pause. Not to mention that they face this possibility at a time when many of them potentially could be patients themselves (or their families). The idea of arresting an activist in this situation is also one the police do not relish. Legalization rallies here get formal police protection when they march. Ask the average beat cop what they think about cannabis legalization and they tend to roll their eyes.

Then there is this: In stark contrast to the wars over prescribing medical cannabis at a state level in California in the late 90’s, here in Germany, there is a cultural commitment to the concept of sick people having a moral and civil right to obtain the medication they require. The idea of the police arresting them in the process of obtaining the same or because they might be recreational users, is as antithetic to core German sensibilities as the concept of Donald Trump as U.S. President. So is the idea of branding someone a “criminal” if not “drug user” for possession of a drug that is now used as medicine in Germany.

As has been rumoured for some time now, one of the few things that all political parties in Berlin can agree on is a change on the current cannabis laws.As a result, the very idea of both arresting the sick or labelling someone for the rest of their life with a police record for a drug “crime” that nobody considers as such anymore, causes a shock to the system. In many ways, German culture is far more conservative than the U.S. On another, there is a deeply humanistic, liberal strain to German life that also allows nudity, alternative healthcare and lifestyles to flourish (and not just all in Berlin). The current situation over cannabis, in other words, is becoming a political and legal embarrassment even to the beat officers who have to implement such laws.

And then of course there is this: One of the country’s top judges, Andreas Müller, a man well-known to the senior level of BDK, has recently written a book about the horrible situation that faces his own brother because of drug laws in Germany called “Kiffen und Kriminalität.”

Cannabis also falls into this crevice of cultural questioning if not the national zeitgeist of the moment, in multiple ways. It is, beyond the stigma, a natural medicine that is now federally recognized as such and one that the statutory health insurers (public healthcare) is required to cover. No matter that only 64% of submitted rezepts have been formally approved 11 months into Germany’s foray into this world. There are doctors writing them. And there are insurers picking up the tab.

It also means that there are at least 10,000 legal medical cannabis patients that der polizei have no wish to bother. And 10,000 German patients, who look the same as anyone else, are already too many legal users for current laws to stay in place.

Decriminalization, Cultivation & Changing Culture

There are some who say that Europe is “backwards” if not slower than the United States. Certainly those who experience German culture as Auslanders are struck by the procedural requirements of everyday life. Things do move slower here.

However when things do move, they are determinative shifts. Right now, it is impossible to live in the country and not be aware that Kiffen – a slang term for pot auf Deutsch – is legalizing in the U.S., Canada, the rest of Europe and of course other places. Further, Germans with their distrust of bureaucracy and authority and certainly currently rebellious mood, are looking to a way forward for the country in a sea of uncertainty both locally and regionally not to mention globally on any issue, no matter how “symbolic.”

As has been rumoured for some time now, one of the few things that all political parties in Berlin can agree on is a change on the current cannabis laws. The idea of decriminalization, now suggested by one of the country’s top cops, is a natural solution to political deadlock, if not a changing society.

The idea that other countries are also moving on this topic, from the now Brexiting UK to France next door, not to mention all the cultivation focused reform in many European countries, seems to indicate that decriminalization and even recreational reform are coming and now officially on the schedule, and not just to Germany but the entire continent.

February 7, 2018

MGC Pharma Makes Its Slovenian Moves More Final

By Marguerite Arnold

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Right now the map of Europe, from a cannabis cultivation perspective at least, is shaping up to be very much like a game of Risk. Throw the dice, move your armies (or more accurately line up your financing), and apply for federal import and cultivation licenses.

In the process, all sorts of interesting strategic plays are popping up. And as a result, here is a new and actually pretty cool “alternative” reality that is easy to verify in several different ways. Medical cannabis is being cultivated in multiple countries across Europe as of 2018, however unbelievable this was even four years ago. Even though it is still cleary just early days. And those cultivators are already international, operating across federal jurisdictions in Europe and across both the Atlantic and Pacific oceans.

With all the excitement and attention paid to the American hemisphere and the European moves of big Canadian LPs (and they are pretty amazing), there are still other moves afoot that are absolutely of note. Specifically, Australian firms and MGC Pharma in particular, have been moving steadily to establish both distribution and cultivation presence on the ground in Europe.

CannEpil MGC — CannEpil, the company’s first pharmaceutical-grade medical cannabis product for the treatment of refractory epilepsy.

The latest news? MGC’s production facility in Slovenia was officially inspected by authorities and issued an interim license for its production plant in January, before presumably being given a green light of approval permanently. The company is also moving forward with the production of CannEpil, the company’s first pharmaceutical-grade medical cannabis product for the treatment of refractory epilepsy.

Refractory epilepsy affects about 30% of all those who suffer from the condition. Refractory is one of those words however, that hides its real meaning. Translation for those without an MD? This is “drug resistant” epilepsy. Resistant to all drugs before, of course, except cannabinoids.

And that is a welcome relief for patients domestically and throughout Europe. It is also a note to investors looking for savvy Euro plays right now.For all manufacturers now considering entering this market, this is a complicated environment to begin negotiating

This is a major win for MGC. Not to mention a vibrant medical market. No matter where specialty drugs are now going to be sourced from.

A Treatment-Driven “Branded” Pharma Market

What more traditional American pharmaceutical companies have known for a long time (certainly since the 1950’s) is now a fact also facing all cannabis brands coming to the European market and Germany in particular. The regulatory environment is hostile to the extreme for Auslanders in particular. Specifically, the development of “branded” or “name brand” drugs runs economically and philosophically counter to the concept of public health insurance itself even as their market accessibility is required by the same. This is even more the case for foreign firms with such ideas.

Here is the problem. Name brands are expensive. They are also usually outlier drugs for specific, relatively rare conditions. This is also the place where new drugs enter the market, no matter what they are.

In an environment where the government negotiates bulk contracts for common drugs and these can be bought at every apotheke (pharmacy) for 10 euros and a doctors rezept (prescription), the chronically ill and those with drug resistant conditions are left out of the discussion. They face steep and usually inaccessible bills up front for all meds not in bulk purchase categories. And that as of last year in Germany specifically, includes cannabis. That is the case even though technically the government is now buying cannabis in bulk and making purchase commitments to foreign companies for the same. Insurance companies, however, are still forcing patients to pay the entire out of pocket cost up front and wait to reimbursed.

“Generic” Brands For Off label Chronic Conditions

However medical cannabis is clearly not just another drug. Cannabis falls on both sides of every fence in this discussion.

The first problem is that the providers (importers and soon to be domestic cultivators) are private companies. All of them are foreign helmed at this point, with a well-developed bench of branded products. That makes all cannabis drugs, oil and flower, by definition, fall into the “expensive” branded category immediately. The German, Italian, and Danish governments appear to be now negotiating bulk buys during a licensing season that is well on the way to domestic cultivation too. That alone will affect domestic prices and new products. But again, this is now several years behind other countries – notably MGC in Slovenia, Tilray in Portugal, all things now afoot in Denmark and clearly, Greece.

Next, cannabis’s status as a still imported, speciality, semi-trial status in the EU means it is in the most restricted categories of drugs to begin with (no matter the name or strength of the cannabinoid in particular). And because it can be bought as bud, in an “unprocessed” form as well as processed oils or other medicine, this is throwing yet another spanner into the mix.

Look for distribution deals all over Europe as a result, starting with PolandThen there is this wrinkle. Cannabis (even CBD) is currently considered a narcotic within the EU and even more specifically the largest continental drug market – Germany. The German regulatory system in particular, also imposes its own peculiarities. But basically what this means in sum is that the legal cannabis community including distributors and pharmas at this point, have to educate doctors in an environment where cannabis itself is a new “brand.” Who manufactures what, for the purposes of German law, at least, is irrelevant. It is what that drug is specifically for that matters.

For all manufacturers now considering entering this market, this is a complicated environment to begin negotiating. This is sure not how things are back home.

What this also means is that low cost, speciality cannabis products will continue to be imported across Europe for the German and other developing, regulated sovereign markets here as doctors learn about cannabis from condition treatments. And that is what makes the news about MGC even more interesting.

Look for distribution deals all over Europe as a result, starting with Poland. And, despite the many well-connected and qualified hopefuls from Canada, a little competition in the German market too.

MS is the only “on-label” drug at present for cannabis treatment in Germany. As a result, particularly when it comes to paediatric treatment for drug resistant epilepsy, this is the kind of strategic presence that will create a competitive source for highly condition-branded medication for a very specific audience of patients. It is also what the German market, for one, if not the EU is shaping up to be at least in the near term.

As this interesting abstract from 2006 clearly shows, this kind of epilepsy is also high on the German radar from a public policy and healthcare-cost containment perspective. The costs of treatment per patient were between 2,600 and 4,200 euros for three months a decade ago, and not only have those risen, but so have the absolute number of people in similar kinds of situations.

Further, with indirect costs far higher than direct costs including early retirement and permanent semi disability, MGC’s market move into an adjacent (and cheaper) production market might be just what the German doctors if not policymakers now looking at such issues, will order.

January 29, 2018

NACB Releases Packaging and Labeling Standards for Public Review

By Aaron G. Biros

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Last week, the National Association of Cannabis Businesses (NACB) announced the publication of their Packaging and Labeling National Standard, initiating a comment period for public review. The NACB, which launched in June of 2017, is the first-ever self-regulatory organization (SRO) for cannabis businesses in the United States.

According to the press release, the Packaging and Labeling National Standard, the first standard for them to publish, is designed to help protect consumers and show regulators and financial institutions that members of NACB operate ethically and responsibly.

According to Andrew Kline, president of NACB, the standard is based on regulators’ priorities, among other stakeholder inputs. “The NACB believes that self-regulation is the most effective course of action for our members to control their own destiny in the face of regulators’ growing need to intervene,” says Kline. “The creation and adoption of national, voluntary standards that are aligned with regulators’ priorities takes input from government, NACB members, and subject matter experts into careful consideration. Through this process, the SRO identified product packaging and labeling as our first priority because it impacts so many issues related to health and safety.”

Here are some of the major areas the standard addresses, from the press release:

Child-resistant packaging guidelines for all cannabis products
Consistent labeling that identifies the cannabis product’s origin, cultivator and processor
Inclusion of warning statements regarding health risks associated with cannabis consumption, such as advising consumers to not drive or operate heavy machinery while using the product, and that the intoxicating effects of the product may be delayed after consumption
Avoiding packaging and labeling that appeal to minors
Requirements and methods for listing all ingredients present in the product
Inclusion of major food allergen warnings and information on cannabis edibles based upon U.S. Food & Drug Administration guidelines
Guidelines on how to address health and medical claims for cannabis products

The public review and comment period lasts until February 21^st. During that time, every comment submitted will be reviewed and could impact the final language of the standard. Prior to adopting the new standard, they write a final draft after the comment period and bring it to members for a final vote.

Once the final standard is in place, the NACB enforces the standard with their members. If a member doesn’t comply, they can be removed from the organization or penalized.

Towards the end of the press release, they hint at news coming in 2018 for their members. “To help aid members in complying with the requirements of state governments and the NACB’s National Standards, the NACB expects to launch a technology solution exclusively for members in 2018,” reads the press release. “The technology platform is also expected to help members meet the rigorous due diligence required by financial institutions and business partners, by creating an auditable ledger of compliance and financial records.”

January 10, 2018

German Media Reports Dramatic Increase in Cannabis Patients Covered by Insurance

By Marguerite Arnold

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German media is now reporting that in the first 10 months of medical cannabis reform, over 13,000 applications for medical cannabis have been received by the largest three public health insurance companies. Most of the applications were received (and processed) by AOK who received 7,600 applications. Barmer received 3,200 applications. Krankenkassen Techniker (or TK as it is widely referred to here) received approximately 2,200 applications.

The reality is that most patients still rely on the black market.Between 62-64% of those who applied at the big three were also reimbursed. That means that there are already close to 10,000 patients, if not slightly more, covered under some kind of reimbursed cannabis scheme in Germany (where cannabis costs only $10 per month as a co-paid expense). When cannabis is not covered by health insurance, however, patients must pay out of pocket for the drug which can run as much as $3,000 for a single month’s supply.

This information is also being released, fascinatingly, not from the government, insurance companies or even advocacy groups. Instead it comes from a report produced by local media (the Rheinische Post in Dusseldorf). The media outlet surveyed the three top largest health insurance companies on the number of cannabis-as-medicine applications they have received since the cannabis law was reformed last year.

Home cultivation and recreational use, except in a few city trials now underway in places like Bremen, is still outlawed on a federal level. The new law also specifically prohibits patients from growing their own. And since the reform law passed last year, the prevailing story from patients is the difficulties they have had in not only finding a doctor willing to prescribe cannabis, but also getting their health insurers to reimburse them for huge out of pocket expenses that most of the chronically ill can never hope to afford.

The reality is that most patients still rely on the black market. It is still easier to get cannabis this way. And far cheaper – unless of course approved by health insurance.

What Does This Mean For The Bigger Picture?

Despite the fact that many in the mainstream German media are still highly sceptical of the medical efficacy of cannabis, the tide is turning here too, rather dramatically. According to recent polls, about 57% of the country is ready for recreational reform. That means in the last four to five years, the majority of public opinion has also shifted. It is also clear that medical cannabis cannot be as easily dismissed as it once was. Here or anywhere.

What makes this even more interesting is the impact this now moving situation will have on the debate, particularly domestically, but also internationally.

The first is that Germany clearly has a huge number of potential patients. Local advocates put the real number here north of 1 million for conditions the drug is commonly prescribed for in other places. At the present time, the only doctors who are allowed to prescribe the drug must also have a special license to dispense such restricted “narcotics” as cannabis is now classified auf Deutsch. And the only “on-label” condition for cannabis is still Multiple Sclerosis. That means that cancer, AIDS, chronic pain and movement disorder patients, along with those who manage to get approved for PTSD, ADD, depression and other “psychological” disorders only get the drug approved as a measure of “last resort.” In other words, after all other drugs fail. That is a high bar to pass.

The second, as a result, is that these numbers appear artificially low for another reason. The government claimed upon passage of the cannabis reform legislation last year that it expected only 10,000 new patients a year for the first few years (and before domestic cultivation began). As these results already prove, there are clearly far more patients who want the drug than those who can get it. There are also more patients whose doctors are willing to write prescriptions for the drug than are getting reimbursed by public health insurance.Bottom line? No matter how slow it is in getting started, the medical cannabis market has arrived in Germany. The numbers will only grow from here.

Third, this entire debate is now happening at a time when Germany is re-examining its own health insurance policies. While 90% of the country is on much cheaper public healthcare, 10% of the country, mostly the self-employed, foreigners and high earners, have private coverage. This is highly expensive, and ends up trapping even Germans in a system that is unaffordable as they age. In fact, the issue is a big one in Berlin right now as particularly the SPD is pushing Chancellor Merkel and the CDU to finally address a growing problem.

The law last year mandated that public health insurance must cover cannabis if prescribed under the right conditions. That means that private health insurers have to cover it too.

On the cannabis front specifically, what this may indicate, however, is that the public health insurers are being tasked to only approve a certain pre-identified number of patients nationally in the early part of the cannabis program. Especially as all of the medical cannabis in the country is still imported – and most of that is still coming from Canada.

What these numbers clearly show however, beyond all the caveats, is that demand is starting to pick up. Cannabis as medicine has not entirely caught on in the mainstream, although Germans are clearly interested in the idea. Especially given all the noise and news from abroad on this front.

It also means that no matter how “anaemic” these numbers may seem in early 2018, it is a respectable kick-off to what many in the industry view as one of the world’s most lucrative medical cannabis markets. Counting the approximately 1,000 patients who received medical cannabis before the law changed last year, it is safe to say that the market is now up and running.

Bottom line? No matter how slow it is in getting started, the medical cannabis market has arrived in Germany. The numbers will only grow from here.

How Does This Compare To Other Countries?

But how does the German patient ramp up compare to other countries after significant reform has been passed?

In Canada, the cannabis-as-medication discussion is clearly mainstream as the country prepares to launch its recreational program later this summer. The medical program began in 2014. The most recently released figures as of the beginning of January 2018, show that medical cannabis has clearly caught on. Health Canada’s most recent figures show that by September of last year, there were 235,621 registered cannabis patients in the country. Significantly, this is also up dramatically from 174,503 registered patients as of just April 2017. The previous year, the total number of cannabis patients literally tripled in 2016. To put this in “historical perspective,” as of Q1 2015, about a year into the new medical law in Canada, there were “only” 23,930 patients (or about twice the number in Germany as of now). This growth is all the more impressive when one considers that there is no mandate for insurance coverage of the drug in Canada. That said, cannabis is far cheaper in Canada. It is of course covered domestically. Plus the licensed producers can mail order it directly to patients.

Israel’s path to medical cannabis access has been slower off the ground in terms of overall numbers, but it is has still dramatically expanded over the past decade too. In 2012, there were about 10,000 cannabis patients in Israel. That number more than doubled by 2016 to over 23,000 patients. This will continue to increase too. Israel’s medical cannabis is covered under national health insurance and patients must pay about $100 a month for their meds.

What Is The Official German Government Response To This News?

Marlene Mortler, German drug commissioner for the federal government and affiliated with the CSU, has issued comments that seem to be supportive of the continued program in Germany. “The growing number of permits shows how important it was to launch this law last year,” she said, while warning that medical cannabis is not a panacea.