Tag Archives: europe

French flags blowing in the wind in Le Havre

France Considers Fining Cannabis Possession

By Marguerite Arnold
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French flags blowing in the wind in Le Havre

The French have always been known for possessing a certain national savoire faire. In English, that translates to a phrase meaning innate understanding of how to do things with a certain amount of panache, if not bonhomie. International diplomacy was long conducted in French as a result.

However, when it comes to the famed French silver tongue or sophistication on the cannabis issue, and well, not so much. As is widely acknowledged, even by the French, the country is stuck in the Dark Ages when it comes to cannabis. Almost literally. Including having the strictest and harshest penalties for possession anywhere in Europe. Such penalties do not include a stint in the Bastille. But they can involve prison time, and they are ridiculously harsh. Quelle Horreure! Not mention, Vive la Revolution!

Nobody has said (yet) “Let them eat spice cake.” But France is now clearly an outlier in a continent moving towards cannabis reform of (at least) the medical and decriminalized kind.The most recent statistics suggest that 17 million French people have tried cannabis.

And herein lies the French paradox. Despite the highest per capita usage of any European country, French cannabis consumers have not turned into effective advocates on the political front.

Why not?

How High Are The French?

The most recent statistics suggest that 17 million French people have tried cannabis. 1.4 million use it regularly, about half of those on a daily basis. And here is the exciting (read: terrifying part). Users (not dealers) face up to a year in prison on the first offense, plus a fine of 3,750 euros (about $4,000).

Mon Dieu! Who on earth do the French think they are? A southern American state? One that probably actually banned “French” fries during a dull day at the state ‘lege when politically inspired to do so a few years back?

But even that epithet doesn’t cut it anymore in an environment where Florida is getting in on the action, and the first medical dispensary just opened in Texas.

French flags blowing in the wind in Le Havre
Image: Richard Akerman, Flickr

It is also not like the French big wigs also do not know they are out of step. France’s boyish president, now in office for about a year, Emmanuel Macron, promised decriminalization by the end of 2017 (it didn’t happen). Now a new parliamentary report, released, fittingly on Valentine’s Day, recommends swapping out the current draconian punishments for a fixed fine of between 150-200 euros ($250) per offense. The report also specifically concludes that current legislation is not working.

In 2015, there were 64,000 drug related convictions in France. 40,000 were for use, not dealing. While just over 3,000 of those convicted actually served a prison sentence, even the more conservative aspects of French society have had enough.

Like Germany recently, where the head of the country’s largest police union came out last week for decriminalization, the French police do not want to continue a charade that results in more paperwork for them, rather than a real shift in policy with concrete results. And now, neither do its politicians.

don’t expect this current diplomatic impass to hold for long, even if it gains enough traction to get passed into federal law.In an environment where political gridlock is the name of the game, however, it is very clear that cannabis is just one more issue dropped into a toxic mix that also includes topics like “what’s up in the EU.” Not to mention the nascent separatist and populist sentiments of neighbours like Spain and Germany. Countries, ironically, also far ahead of France on the cannabis front.

The hope of French activists on the ground is that cannabis is actually caught on the right side of history now. Even if, finally, it is changing the law to decriminalize the drug and only penalize patients (and others) with a ticket.

That too, is unlikely to succeed, as many such experiments elsewhere have failed before. That said, it is clearly a step in the right direction and an inevitable one at that.

Caught in the Middle

The great irony of this of course, is what is happening as France becomes an unwilling partner in the cross-border cannabis ménage-a-trois now afoot thanks to changing medical cannabis laws elsewhere in the EU. Namely, cannabis may remain off the reform agenda to parliamentarians and out of reach to the average French patient. That said, cross-continental transport of the drug will inevitably create a situation where a significant amount of cannabis products consumed by medical users elsewhere in the EU is trucked and or trained across France while out of reach to the locals.

Portugal and Spain are shaping up to be low-cost producers to the West. On the East, Germany, Switzerland and increasing numbers of Eastern European countries are looking for cheap product. That means there is going to be a great deal of medical grade cannabis crossing the continent by way of French territory. There is already a trickle. It is about to become a flood. What happens to reform in a country clearly caught in the middle?

As a result, don’t expect this current diplomatic impass to hold for long, even if it gains enough traction to get passed into federal law.

French cannabis policy is far from a la mode. Even to its own citizens. And on this issue, for sure, absolutely old fashioned in the most un-French way possible.

mgc-pharma

MGC Pharma Makes Its Slovenian Moves More Final

By Marguerite Arnold
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mgc-pharma

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.mgc-pharma

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.

aurora logo

Aurora Leads Cannabis Import Race in Italy by Winning (Mostly) Exclusive Rights

By Marguerite Arnold
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aurora logo

Just as the dust had settled on the news that Canadian LP Aurora had signed agreements to finance a major growing facility in Denmark, the company also added another European feather to its cannabis cap.

On January 18, the company announced that it is the sole and exclusive winner of an EU-wide tender bid to begin to supply medical cannabis to the Italian government through the Ministry of Defense. Why is this federal agency in charge instead of the federal ministry of health? So far, the Italian cannabis program has been overseen exclusively by the Italian military.

pedanios cannabis
Pedanios cannabis, produced in Canada and imported through Germany

But the military just isn’t cut out to cultivate cannabis for the entire medical needs of a country, which should seem obvious. And that is where the Canadian LPs apparently are coming into play.

There were two stages to the bid, with Pedanios, Aurora’s German-based arm prequalifying in the first. In the final round, Pedianos won exclusive rights to begin supplying the government with medical cannabis.

What is interesting, however, is what this says not only about the potential growth of the cannabis market in Italy, but beyond that, Germany.

A German-Canadian Sourced Italian Product?

Pedanios, who won the bid, is the German-based arm of Aurora, one of Canada’s largest LPs. And Italian medical cannabis is now about to be routed by them from Canada, via Berlin, to market locally via pharmacies. It is certainly one of the stranger paths to market globally.

This announcement is even more interesting given that Aurora is widely suspected to be one of the top contenders in the still-pending German bid.aurora logo

Could this herald a German-sourced cannabis crop for an Italian neighbour?

And what does this say about the sheer amount of volume potentially needed for cultivation next door (or even in Italy) as Germany begins its own cultivation program, presumably this year, to source an already undersupplied domestic market where growing numbers of patients are getting their medical cannabis covered under public health insurance?

Will Germany further antagonize its neighbours over a cannabis trade imbalance? Or does this mean that a spurt of domestic Italian cannabis production is also about to start?

There are 80 million Germans and about 60 million Italians. Who will be the cannabis company to supply them?

Nuuvera Also Makes Italian Moves

Less widely reported, however, was the news that Aurora/Pedanios would not be the only private supplier to the Italian market. Nuuvera, which just announced that they had become finalists in the competitive Germany cultivation bid, also just acquired an import license to Italy for medical cannabis by buying Genoa based FL Group.Nuuvera logo

One thing is clear. The pattern of establishing presence here by the foreign (mostly Canadian) firms has been one of acquisition and financing partnerships for the past 2 years.

Import until you cultivate is also clearly the guiding policy of legalizing EU countries on the canna front.

The question really is at this point, how long can the import over cultivation preference continue? Especially given the expense of imported cannabis. Not to mention the cannabis farms now popping up all over the EU at a time when the Canadian market will have enough volume from recreational sales to keep all the large (and small) LPs at production capacity for years to come.

In the next year, in fact, look for this reality to start changing. No matter who has import licenses now with flower and oil crossing oceans at this point, within the next 18-24 months, look for this pattern to switch.

The distributors will be the same of course. But the brand (and source) of their product will be from European soil.

Foreign Invasions, Domestic Cultivation Rights & More

ICBC logoOne of the more interesting professional conferences this year globally will clearly be the ICBC in Berlin, where all of these swirling competitions and companies come together for what is shaping up to be the most influential cannabis business conference in Europe outside of Spannabis (and with a slightly different approach). Nowhere else in the world now are international companies (from bases in Canada, Australia and Israel primarily) competing in such close proximity for so many foreign cannabis markets and cultivation rights to go with them.

With the average cultivation facility in Europe going for about USD $30-40 million a pop in terms of sheer capital requirements plus the additional capital to finance the inevitable delays, such market presence does not come cheap.

It is increasingly clear that the only business here will also be of the highly regulated, controlled medical variety for some time to come.

That said, when the move towards recreational does come, and within the next four years or so, the global players who have opened these markets on the medical side, will be well positioned to provide product for a consumer base that is already being primed at the pump. Even if for now, the only access is via a doctor’s prescription.

Greece Moves Forward on Legalizing Medical Use

By Marguerite Arnold
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The Greek Parliament is finally expected to approve the medical use of cannabis – probably in the first weeks of February. The move is far from a surprise. Greek politicians announced last summer that this development was in the cards.

What is even more promising for the sector domestically, not to mention in terms of European reform, is the unflinching acceptance of this industry by the establishment and national politicians, and further as one with great economic development potential for a still-ailing economy.

A $2 Billion Injection of Capital

Deputy Agricultural Development Minister Yannis Tsironis (for one) has already publicly expressed his hope that the Greek medical program will attract beaucoups bucks from overseas.

However given the context in which this announcement has taken place, is this seriously a commitment to medical cannabis? Or is it an easy (if not slightly buzzy) way to attract foreign capital to a Mediterranean paradise still in dire need of a capital injection from any source it can get one?

Deputy Agricultural Development Minister Yannis Tsironis

Maybe it is a combination of both.

Many in Europe are forecasting that 2018 might finally be the light at the end of the tunnel for the Greek economy, which has been mired in austerity for the last decade. The Greek government is now in the process of moving forward with the final requirements of both labour reforms and receiving what is hoped to be the last bailout of its economy by foreign investors before it finally goes it alone by August 2018.

The Greek economy finally grew 1.5% last year. In 2018, in part thanks to the final package of reforms, the economy is expected to grow by 2.4%.

A foreign-financed medical cannabis business might be just what the economists have ordered. Especially if it is also open to visitors.

Medical Marijuana on Mykonos?

The development of a domestic medical cannabis industry in Greece is good news for not only medical reformers but also those who are looking for ways to expand the influence of the flower into the broader economy.

And Greece is one place where such ideas could easily and quickly take root in Europe.

Mykonos, the Greek island
Image: Maggie Meng, Flickr

Greece has long been the haven for a highly niche, international tourist audience. Tourism in general has also been on the uptick over the last two years again as particularly Europeans look for relatively cheaper beaches and sunshine. Over 30 million foreign tourists flocked to the country last summer – a number of people roughly three times the population of the country.

Again, mainstreamed medical cannabis would only add to the economic results in a way that is just as heady if not (economically) stimulating as a good sativa.

The idea of a medical tourism industry here, could also potentially create not only a Greek medical paradise, but potentially also have a growth impact on European cannabis programs too. Especially if reciprocal medical rights we

re also offered to EU citizens looking for an extended canna-friendly vacation.

Greek Cannabis Club Med?

Of all the countries in Europe, the Greek cannabis experiment offers the first real chance for a Canadian/American style cannabis industry to begin to flourish in Europe. In colder, more northern European countries, medical cannabis is still being treated as an expensive adjunct to traditional healthcare. And no matter how much citizens are moving towards acceptance of a recreational industry down the road, things are moving much slower in the rest of Europe. Germany, to put things in perspective, passed medical reform several months before the Greek decision to legalize medical use last summer. Yet now it appears that Greece might actually move into a full-fledged, domestically grown industry before its Teutonic neighbour to the north.

Parthenon, Athens, Greece
Photo: Kristoffer Trolle

And further, unlike Germany, Greece may well decide to develop its “medical cannabis industry” as an adjunct to its tourist industry.

Sure, Holland and Spain led the way in this part of the world if not internationally. Neither country, however, needs new industries now in the same dire way, nor is emerging from a national, decade-long recession.

All the elements are here, in other words, for the Greeks to turn a new page in their very long and documented history, and do something a little different.

Mainstream Media Picks Up On Cannabis

By Marguerite Arnold
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The British online newspaper, The Guardian, has just begun to cover cannabis. The regular feature, part of their “society” section, is clearly attempting to cover cannabis a bit more consistently and regularly as the California rec market begins to gain (legal) steam.

The writer now helmed to lead this effort is Alex Halperin, a business journalist in the U.S., who landed the gig apparently on the success of Weedweek – a highly cryptic weekly summary blog of mostly U.S.-based industry events and updates.How the Guardian will cover the industry and related issues will be interesting to follow.

This is also not The Guardian’s first foray into the topic. The media outlet, which got its start in the 1800’s in Northern England and expanded dramatically to reach a global digital audience over the past decade, has covered cannabis legalization on a fairly regular basis for the last four years. This new focus also comes at an interesting time. Apart from events in the U.S., Canada is moving forward with recreational this summer. And in Europe, the medical discussion continues apace. That said, it appears the Guardian is going to focus on the U.S. market, at least initially.

It will be interesting to see if that focus shifts (and if they allow other journalists outside of the U.S. to participate in the expanded coverage). While California might well be the largest state economy in general, the Canadian market is already larger and more developed, being regulated nationally across multiple provinces.

Another Mainstream Media Cannabis Column?

This is hardly news. The Guardian is actually treading on ground established already by most of the big news and business publications – including niche publications, blogs and of course, the trade press.

How the Guardian will cover the industry and related issues will be interesting to follow.

The purpose of the column apparently is to spark an “adult conversation” about cannabis – and how it is “changing modern life.” The initial focus on the U.S. market (and California in particular) may have seemed to make sense to a media outlet looking for outrageous stories. But as everyone knows, the U.S. is only one market – and further one still without federal protection.

However, the Guardian is also now competing with other business and mainstream publications that are already in this space. Main Street, the online business ‘zine helmed by Jim Cramer, created one of the first mainstream specialty cannabis sections almost four years ago with the coincidence of the Colorado rec market. Other notable publications and media outlets have significantly increased their coverage of cannabis as well. CNN has been reporting consistently on cannabis topics like legalization and U.S. federal reform efforts for some time now. Business Insider and Forbes have covered ongoing and growing investments and the financial side of things for several years. The Denver Post has its own entirely cannabis-focused subsidiary, The Cannabist.

And as public companies, in both the U.S. and elsewhere have begun to move through the legal thickets of legalization, business-focussed journals and blogs are even beginning to cover cannabis stocks. Starting with Motley Fool and Seeking Alpha (although again, most of this coverage is of companies outside the United States). Specialty publications are also of course, flourishing online, particularly with the beginning of an advertising market that is also beginning to establish itself, albeit around some still thorny regulatory issues.

In general, although the Guardian has a reputation as critical of the British monarchy, with strong left-leaning tendencies, its coverage of the industry has been fairly mainstream – so far at least.

Will that begin to change? And what will really be tackled and covered? And while the ostensible focus is what is going on in the world of cannabis in California (and presumably other foreign markets) could the Guardian’s ostensible new feature also be geared to drive reform at home? The U.K. has yet to even approach the topic of criminalization.

European Cannabis News Roundup 2017 And Predictions For 2018

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

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

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

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

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

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

Germany

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

Holland

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

Barcelona, capital of Catalonia
Photo: Bert Kaufmann

Spain

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

Poland

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

Warsaw, Poland
Image: Nikos Roussos, Flickr

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

Greece

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

Lithuania

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

Slovenia

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

Denmark

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

Portugal

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

Soapbox

Digitalization Begins To Innovate Insurance Industry: What Does That Mean For Cannabis?

By Marguerite Arnold
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Munich, Germany- In a darkened movie studio on the east end of town, the Digital Insurance Agenda or DIA, the largest insurtech conference in the world, kicked off its annual event in mid-November. The sold-out event attracted about 1,000 top insurance executives from 40 countries and all six continents.

CannabisIndustryJournal attended from the perspective of investigating the overall status of digitalization in the industry. However, there were a couple of things we were on the hunt for. The first was to see how and where blockchain has begun to penetrate the industry. This revolutionary processing and identification layer of digital communications is coming – and fast – to the insurance industry everywhere.

All image credits: MedPayRx (Instagram)

We were also there of course to see if cannabis was anywhere on the agenda. Digitized or not.

By way of disclosure, I am also a high tech entrepreneur with my own insurtech, blockchain-based start-up that we are in the process of launching. MedPayRx is intended to be the first insurance product that will help patients access their meds facing nothing but their co-pay and help insurers automate the approvals process for all prescription drugs and medical devices.

By definition, in Germany, this includes medical cannabis.

Ultimately, our mission is to take the paper and the pain of all reimbursement out of the prescription process. At present, as anyone with a chronic condition knows, many medications and medical devices must be paid for out of pocket first and then reimbursed via a claims process that is paper-based, laborious and expensive. This is not a model that works for anyone. Certainly not poor and chronically ill patients who face this process at least monthly. And certainly not insurers who are now facing higher drug costs if not more claims reimbursements for the same from an aging population.

In a country like Germany where 90% of the population is covered by public health insurance, the situation also poses quandaries of a kind that are rocking the fundamental concept of inclusive public healthcare.

The Impact of Digitalization On The Insurance Industry

As one insurance executive and speaker mentioned from the stage during DIA, there are few industries that are more universally despised than insurance in general. And few verticals where the existing mantra is “you cannot do it worse.” The insurance industry is well aware of that. Further, for all insurances that are not “mandatory” the competition is fierce for consumers’ bucks. Particularly in places like Europe where insurance is also seen as a kind of savings scheme.

If you are a private insurer, of any kind, or offering services to both end consumers and B2B services, you are out of the game if you are not now thinking how to streamline and upgrade all aspects of your business in the digital era. There are many start-ups now tackling what is euphemistically called “cloud2cloud” integrations.

What does that mean?

According to DIA co-founders Reggy de Feniks and Roger Peverelli, the influence of tech in general is here to stay and is now driving widespread innovation across the industry. “The DIA line-up and the massive response among the audience show that insurtech is now mainstream,” says de Feniks. “This edition clearly showed the…ever growing attention for artificial intelligence, machine learning and other shapes of advanced analytics.”

“Platform thinking, thinking beyond insurance and creating new insurtech enabled services will be the next challenge for insurers,” added Peverelli.

Subtext? Insurers want your data. They want to use tech to analyse and understand it. The technology is here. But is the regulation? Specifically, in an industry that wants to know everything about you, how is privacy understood and implemented with revolutionary tech?

A Cloud-Based Future

Paper is rapidly becoming an old-fashioned concept in insurance, much like it has in banking. And like banking, insurance has a strong “financial” side to it. Germans, for example, tend to use insurance policies as retirement accounts, (the idea of a 401K is almost unheard of here). And by far, the most dynamic and digitalized part of the industry tends to be in areas unrelated to healthcare.

Some of the most interesting start-ups at DIA were actually weather-based.

The challenges of these types of insurtechs of convincing both regulators and the industry that such services are not only feasible but needed, pale in comparison however, to the challenge now facing all public health insurers.

And while they were certainly present at DIA, this industry segment was underrepresented at the November gathering. There is a reason for this. The real threat to consumer medical privacy is only growing, not receding in an era where data can be seamlessly transferred globally and digitally.

For that reason, blockchain has many uses and applications in this part of the vertical.

MedPayRx – even as a pre-seed start-up, was not, even this year, the only blockchain-based service we found in attendance at DIA. Next year look for even more.

Blockchain might be the next new “buzzy” tech, but in the insurance industry, there is a real reason for it.

What Was The Response To A Cannabis-Themed “Insurtech?”

As readers in the United States know, health insurance and cannabis is a loaded subject. And while insurance services are beginning to be available as high-risk commercial services for the industry, inclusive health insurance is still off the table because of the lack of federal reform.

Other places, however, the issue is taking a fascinating turn. And in Germany, right now, the situation so far has shaped up to be cannabis vs. public health insurance. It is a mainstreaming trial drug in other words. For that reason, beyond any lingering but rapidly fading stigma, it is a fertile time to be in the middle of it, with a tech solution.

It is also perfect timing from the digitalization and privacy perspective. Unlike the U.S., Germany in particular has tended to keep its insurance services, certainly on the health front, undigitalized because of privacy concerns. That is no longer feasible from a cost perspective. It is also increasingly one that has to be dealt with from a tech and regulatory one.

Why Is CannabisIndustryJournal At DIA?

My nametag identifying me as both “media” and of a certain green source, was the source of endless discussion with everyone I talked to. Many attendees were extremely curious about why a cannabis industry publication was at an insurance conference. And most people, certainly the non-Germans in attendance, were unaware that per federal law, cannabis is now, at least in theory, covered by public health insurance here.

Medical insurance that treats cannabis just like “any other drug” is a discussion at the forefront of the medical community in Europe. Even if not at health insurance industry events like DIA. Yet. In the last year, in fact, Dutch insurers have started refusing to cover the drug as the German government moved forward on mandating coverage.

In other places, like Australia, Israel and Canada, the conversation is also proceeding, albeit slowly within the context of public health coverage.

However compliance and tracking of the drug itself, not to mention the need for research on how cannabis interacts with other drugs mandates a consideration of how digital health records, privacy and tracking can exist in the same conversation. And further, can be accessed by the insurance industry, the government and policy makers as reform moves into its 2.0 iteration – namely federal recognition of the drug as a legitimate medicine.

We at MedPayRx think we have one answer. And next year, we hope to present from the stage as we continue to move forward with engaging the insurance industry here on all such fronts. Not to mention helping move the conversation forward in other places. And of course, launching services.

Soapbox

Poland Legalizes Medical Cannabis

By Marguerite Arnold
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Poland has now legalized cannabis for medical purposes.

That said, it will be some time before patients have access to the drug. While Poles can now technically access medical pot, the scheme approved by the Polish Parliament that went into effect on November 1st is regressive, to say the least. Certainly compared with even other countries in Europe that are now finally admitting that cannabis is a drug with medical efficacy, the Polish experiment looks “old-fashioned.”

What Does Medical Cannabis Reform Look Like in Poland?

Like most conservative countries, Poland is sticking with a highly restrictive approach that still puts patients in the hot seat. In addition to getting a doctor’s prescription, the chronically ill must be approved by a state authority – a regional pharmaceutical inspector. They must get a license first, in other words. They must then find about $500 a month to pay for cannabis. To put this in perspective, that is roughly the total amount such patients get from the state to live on each month.

Warsaw, Poland
Image: Nikos Roussos, Flickr

The multiple steps mean that only patients with financial resources– and an illness which is chronic but still allows them to negotiate the many government hurdles, including cost –will now be able to access medical cannabis. Unlike Germany which makes no such distinctions, Polish law now recognizes the drug as an effective form of treatment only for chronic pain, chemo-induced nausea, MS and drug-resistant epilepsy.

The heavily amended legislation also outlaws home growing. And while 90% of pharmacies will be able to dispense the drug, this is again, a technicality. Where will the pharmacies get the cannabis in the first place?

So the question remains: will this step really mean reform? There is no medical cultivation planned. And no companies (yet) have been licensed to import the drug.

This is what is clear. Much like the conversation in Georgia and other southern American states several years ago, legislators are bowing to popular demand if not scientific evidence, to legalize medical use. But patients still cannot get it – even if they jump through all the hoops.

In Poland, patients who cannot find legal cannabis in the country (which is all of them at this point) now do have the right to travel to other EU countries in search of medicine. But the unanswered question in all of this is still present. How, exactly is this supposed to work? Patients must come up with the money to pay for their medical cannabis (at local prices) plus regular transportation costs. Then they must pay sky high fees to access local doctors (if they can find them) at “retail cost” uncovered by any insurance.

The issue of countries legalizing cannabis on paper, but not in action, is a problem now facing legalization advocates in the EUThe most obvious route for Polish patients with resources and the ability to travel is Germany. The catch? Medical cannabis costs Just on this front, the idea of regular country hopping for script refills – even if “just” across the border – is ludicrous. And who protect such patients legally if caught at the border, with a three month supply?

Poland, in other words, has adopted something very similar to Georgia’s regulations circa 2015. Medical cannabis is now technically legal but still inaccessible because of cost and logistics. Reform, Polish-style, appears to actually just be more window-dressing.

And while it is an obvious step for the country to start issuing import licenses to Canadian, Israeli and Australian exporters, how long will that take?

The Next Step Of Reform – Unfettered Patient Access

While things are still bad in Poland, right across the border in Germany where presumably Polish patients could theoretically buy their medical cannabis, all is still not copacetic. Even for the “locals.” Germany’s situation remains dire. But even before legalization in March, Germany was importing bud cannabis from Holland and began a trickle of imports last summer from Canada. That trickle has now expanded considerably with new import licences this year. And presumably, although nobody is sure, there will be some kind of domestic cultivation by 2019.

At Deutsche Hanfverband’s Cannabis Normal activist’s conference in Berlin held on the same weekend as Poland decided to legalize medical cannabis, a Gen X patient expressed his frustration with the situation of legalization in general. Oliver Waack-Jurgensen is now suing his German public insurer. He expects to wait another year and a half before he wins. In the meantime, he is organizing other patients. “They [political representatives] are bowing to political expediency but completely ignoring patient needs,” says Waack-Jurgensen. “How long is this conversation going to take? I am tired of it. Really, really tired of this.”

The issue of countries legalizing cannabis on paper, but not in action, is a problem now facing legalization advocates in the EU and elsewhere who have achieved legislative victories, but still realize this is an unfinished battle. Germany is the only country in Europe with a federal mandate to cover the drug under insurance (for Germans only). And that process is taking time to implement.But even in Germany, patients are having to sue their insurance companies

Germany, Italy and Turkey are also the only countries in Europe as of now with any plans to grow the drug domestically under a federally mandated regulation scheme. Import from Holland, Canada and even Australia appears to be the next step in delaying full and unfettered reform in Europe. See Croatia, Slovenia and Bosnia. How Spanish or Portuguese-grown cannabis will play into this discussion is also an open question mark. Asking Polish patients suffering from cancer to “commute” to Portugal is also clearly unfeasible.

Unlike the United States, however, European countries do have public healthcare systems, which are supposed to cover the majority of the population. What gives? And what is likely to happen?

A Brewing Battle At The EU Human Rights Court?

While the Polish decision to “legalize” medical use is a step in the right direction, there is still a long way to go. If the idea is to halt the black market trade, giving patients real access is a good idea. But even in Germany, patients are having to sue their insurance companies. And are now doing so in large numbers. In a region where lawsuits are much less common than the U.S., this is shocking enough.

But the situation is so widespread and likely to continue for some time, that class action lawsuits – and on the basis of human rights violations over lack of access to a life-saving drug – may finally come to the continent and at an EU (international) level court.

Patients are literally dying in the meantime. And those who aren’t are joining the calls for hunger strikes and other direct civil action. Sound far-fetched? There is legal precedent. See Mexico.

And while Poland may or may not be the trigger for this kind of concerted legal action, this idea is clearly gathering steam in advocacy circles across Europe.

Did ABCann Lose The German Cannabis Bid?

By Marguerite Arnold
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In rather shocking news out of Germany on the cannabis front, it appears that Canadian LP ABcann has not been selected as one of the finalists in the country’s first tender bid to cultivate cannabis domestically.

As reported in the German press, the company has not been invited to submit an offer in the final award procedures. The reason per a company spokesman as quoted in the German media? The company proved it met the required qualification thresholds – namely it could deliver the required amount of product as required by the German government. However the amount it could produce was less than other firms being considered.

That is a strange statement, especially because the ten licenses on offer only called for a total of 2,000 kgs of production total by 2019 and 6600 kgs by 2022.

Who Is ABCann?

ABcann has been in business since 2014 in Canada, when it received one of the first cultivation licenses issued by the Canadian government. It has also been aggressively positioning itself in the German and European market this year – and in multiple ways. It got itself listed on both American and German stock exchanges by summer. The company established a subsidiary headquarters in Schönefeld as of August 2017. As late as October, the company also was appearing at industry conferences, like the IACM medical conference in Cologne, as an expected finalist in the first bid.

An ABCann facility in Canada

However, the company’s plans to build a $40 million, 10,000 square meter plant somewhere in Lusatia are now also reportedly on hold. The exact location of the plant is unknown, per German government requirements that grow facilities remain secret. That said, with a year and a half to complete construction, if given the green light even by early next year, it may be that this was the reason the company has apparently not made the cut. Or perhaps the German government did not believe the company was adequately funded. A September exercise of warrants netted the company an additional $45 million in operating cash. But with expansion plans in not only Canada and Europe, but Australia too, did the company pass the German test for liquidity?

Management changes are also afoot. As of October 1, Barry Fishman, a former Eli Lilly executive took over as CEO of ABCann Global. Ken Clement, founder of the company, announced in mid-October that he was stepping down from his position as Executive Chair of the Board to be replaced by Paul Lucas a former President and CEO of GlaxoSmithKline Canada. John Hoff, the Geschäftsführer (or CEO) of ABcann’s German subsidiary, has also recently left the company. When asked by CannabisIndustryJournal about his reasons for doing so at the Cannabis Normal conference in Berlin at the beginning of November, Hoff cited “management and creative differences” with ABcann Canada as the impetus for his recent departure.

However with the news of ABcann’s apparent loss of a front-runner position in the pending bid, such news appears to herald a bit more of a shakeup at the company, if not a refocussing of overall global strategy.

A source within the company who wished to remain anonymous also said this when contacted directly by CannabisIndustryJournal. “Our top priority currently is to acquire an import license. We also fully intend to pursue all of our plans in the German market, but we have no firm dates on the construction front.”

The State of Medical Cannabis Reform Auf Deutsch

The German medical cannabis question has certainly jerked forward over the past several years through several rough patches. This year it has gotten even stranger. And nobody is quite sure where it will end up.

The news about ABcann is also the latest episode in a very strange story that has continued to develop mostly out of sight of the public.

That bid process, which was expected to announce the winners by late summer, has now dragged on through the fall.Germany began moving forward quietly on the cannabis issue in the first decade of the century. Patients could only access the drug in basically trial mode. Most patients who qualified with a doctor’s prescription and a special permit to take the drug, could also access only Sativex (which is very expensive) or the synthetic form of the drug, dronabinol, manufactured domestically in a facility near Frankfurt. All bud cannabis was imported from Holland by Bedrocan. Strictly controlled not by German, but rather Dutch law on cannabis imports.

In 2014, the first German patients successfully sued the government to grow their own plants if their insurance companies refused coverage of the drug and they proved they could not afford alternatives.

This year, in January, the German government voted unanimously to change the law to mandate public health insurance. The law went into effect in March. Mainly driven by a desire to halt home-grow, the rules changed again. Post March 2017, patient grow rights have now been revoked. Now patients are theoretically allowed to get cannabis covered under public health insurance. In reality, the process has been difficult.

In April, the German government created a new “Cannabis Agency” under the auspices of BfArM. And BfArM in turn issued a tender bid for the country’s first domestic licences in April.

That bid process, which was expected to announce the winners by late summer, has now dragged on through the fall.

When Will The Winners Be Announced?

That too is unclear. It is very likely that the final announcement will not be made by the government until the beginning of the year – after the new government is formed. The so-called “Jamaica Coalition” – of the mainstream CDU, the Greens and the liberals (FDP) is under major pressure to address the issue of access. So far Chancellor Angela Merkel has signalled her resistance for additional changes to the new cannabis law. That said, the current situation in Germany, which is untenable for patients and doctors, as well as companies trying to enter the market and investing heavily, is unlikely to hold for even the next several years.

Problems with finding doctors and medical reimbursement under insurance have kept this patient population from growing the way it would otherwise.In late October, the news broke that two legal complaints had been unsuccessfully filed against the bid itself. Both parties’ complaints were dismissed. Yet there also appears to have been a third complaint that has actually devolved in to a real Klage – or lawsuit. Lexamed GmbH’s claim directly addresses issues expressed by many German-only firms this year. Namely that they were unfairly left out of the bid process because of a supposed lack of experience. As such it is likely to be closely watched by other existing German hopefuls.

This lawsuit has now formally delayed the announcements on the bid decision until at least after December 20th of this year, when the oral arguments will be heard in the case. A decision about the bid will go forward when this has been decided, by the beginning of 2018.

In the meantime? Cannabis imports are starting to enter the country. In late summer last year, Spektrum Cannabis, formerly MedCann GmbH, located just south of Frankfurt, received the first import licenses from the German government to bring medical cannabis into Germany from Canada. Both Aurora and Tilray were granted import licenses this fall.

There are 16 different kinds of cannabis on the market right now. And about 170 kilos of cannabis were imported into the country in the last year. There are also currently about 1,000 patients although this number is artificially low. Problems with finding doctors and medical reimbursement under insurance have kept this patient population from growing the way it would otherwise. There are easily a million patients in Germany right now who would qualify for cannabis if the system worked as it was originally intended in the legislation passed in January.

That said, despite the recent news that ABcann is “out” – at least for this round– apparently the pan-European bid process is still very much alive, despite many recent rumours that it was dead in the water. And plans also seem to be afoot for a separate and additional cultivation licensing round potentially as soon as next year. Details however are unclear and nobody either in the industry or the government is willing to be quoted or give any further information.

The Catalonian Crisis & Cannabis: The Quick Death Of A Newly Regulated Club Scene?

By Marguerite Arnold
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The politics of pot have always been strange. Everywhere. In the modern age of legalization, the battle lines around reform always seem to find expression in the faults if not flames of other highly divisive issues.

It has certainly been true in the United States. And now that has come to Europe.

Where Are The Spanish Fault Lines?

The recent independence bid of Catalonia, up until now, an “autonomous” region of Spain, has all the hallmarks of the same. Catalonia is, in essence a Spanish state, in the northeast corner of the country along the Mediterranean coast. The region also has, outside of its separatist ambitions, pioneered the cannabis club movement. Barcelona of course is the capital of it all. And since the summer of 2017, the continued legalization of the industry here has caused ripples throughout Europe on the recreational and medical cannabis fronts.

View of Barcelona from the Sagrada Família
Image: Michele Ursino, Flickr

Spanish politics are a bit complicated, but basically since the end of fascist rule in 1977, there are a few states with a little more independence from Madrid than others. Catalonia and Barcelona in particular have since flourished as both the economic powerhouse of the country and, incidentally, canna-club reform. Entrepreneurialism in general is high here.

But the idea of the Basques or Catalonia “succeeding” is about as unlikely as Scottish independence.

Why? Economics.

As a result then, where goes the newly legit cannabis club vertical? Will Madrid put a kibosh on that along with “home rule?”

Holland 2.0?

In many ways, Catalonia’s cannabis industry is the next iteration of Amsterdam’s coffee shops. The only difference has been a membership fee rather than an instant cash transaction at retail point of sale. That said, there are many obvious similarities. The supply chain feeding the clubs with product has up until now, flourished in between the grey lines of the law.

The same arguments for legalization also exist here as they do everywhere else – if not perhaps so colourfully. The Catalonian paella of legalization advocates include those who rely on the drug for medical purposes plus those who believe they should have the right to recreational use. And of course, this also includes the police. The latter of whom, who at one point, were seizing so that plants quickly overtook evidence rooms. Spanish creativity in reconverting existing real estate to undercover crop cultivation has created more crop than cops can track down if left unregulated.

Spanish national police trying to stop the independence vote resulted in violence Image: Gustavo Valiente, Flickr

However, much like the purple passions of Colorado, this discussion about legalization has also always been drawn, if not flamed, by passions that also occur along other fault lines. In the U.S., over the first decade of this century, legalization of marijuana and gay marriage literally split the country in two. Colorado in fact first voted to ban gay marriage before voting for recreational legalization. California was also an early mover in both gay marriage and legalizing medical cannabis.

The Spanish version of this, of course, is the current Catalan bid for greater independence. And this has plunged the country into its worst political crisis since it returned to democratic government after the forty-year-plus rule of the fascist dictator Franco, if not the failed coup in the early 1980’s to re-establish military rule.

It is also not a trivial question to ask what will happen to the cannabis industry that has begun to flourish here if Madrid reimposes direct rule? While the industry that has been legalizing over the past three to four years, this summer, Catalonia moved finally to legalize cannabis cultivation and consumption across the board.

While that may seem to be a stupid if not irrelevant question– at least outside the cannabis industry itself – it may be highly relevant to what comes next.

Flying High On Reform

Catalonia has been the economic engine of the Spanish economy since Franco. In fact, that is one of the reasons that Madrid could never allow the region to split away. Another undeniable reality? The only thing that Catalonia does not have complete control over is its taxation and the redistribution of said funds to the rest of the country (including the equally separatist-inclined Basques just to the north). Not that Catalans really seem to be all that sure about this desire of full independence. In fact, the succession vote itself, much like Brexit, seemed to be more a criticism of politics in Madrid rather than a desire to become fully independent of it.

Demonstrators in Barcelona march for a vote on independence
Image: Joan Campderrós-i-Canas, Flickr

It is also unlikely that the recent cannabis business will go away – no matter what happens with direct rule. Catalonia’s decision to proceed with full legalization was intended to become, much like Colorado turned out to be. A guideline for better clarification on the federal level. If not a blueprint for other regions to follow when it comes to cannabis clubs.

There are very dramatic statements still flying between parties in Madrid and those who seek to stimulate if not agitate for greater independence. But that is unlikely to happen for several reasons beyond internal Spanish politics. European leaders are not encouraging another Brexit. This, to both Emmanuel Macron and Angela Merkel, is an internal, domestic issue. And the locals are still very unsure about the next steps.

Is There A Connection Other Than Timing?

Things are starting to change – and dramatically on many fronts. There are political fault lines everywhere, where marijuana is showing up in strange forms and incarnations. The delay on the German bid is apparently another one.

There is also a clear connection just about everywhere between cannabis reform and the desire for something different . Whatever that might be. Including broader political change.

Demonstrations before the vote for independence
Image: SBA73, Flickr

What does that mean? For the industry specifically? For the market that is developing in Canada, Europe and elsewhere, political and operational risks are some of the equations contributing to the bottom line.

There is also this reality. To date, the real money in the Spanish market is also being made in medical. Or about to be. See the Alcaliber alliance with Spektrum. No matter how attention grabbing the Spanish headlines may be, the larger game moves forward inevitably. As does medical reform, plus greater access even without the cannabis club economy.

Could there be a pot-themed compromise to what troubles the land where the rain falls mainly on the plain? Sure. Givebacks of a financial kind, including for example, the right to keep all pot taxes local, might be solutions that could be tried if there is an attempt to defuse a situation that is tense. And still on an uncertain course.