Tag Archives: European

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German Authorities Will Issue New Cannabis Cultivation Bid

By Marguerite Arnold
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According to Kermit the Frog, it’s never easy being green. It is also tough to be “first” in the cannabis biz. Anywhere.

One of the most remarkable features of the first years of state-level legalization in the U.S. was the sheer number of mistakes by the authorities in issuing licenses and bids for state-sanctioned cultivation and dispensation once the voters had forced legalization. There were several state-level “redos” and lots of legal mumbo jumbo thrown around as the green-rush kicked off at the state level.The real news? There is going to be a completely new one.

Fast-forward a couple of years and it is clear this is not just an issue of the confused state of legalization in the U.S.

Canada too, on a federal recreational level, has moved forward in fits and starts. And even though a fall start date to the market has now been enshrined into law, the continued moving target of the same has been a topic of fraught conversations and bargaining ever since the country decided to move ahead with full Monty recreational.

Across the pond, things are not going smoothly on the cannabis front. In the first week of July, the much stalled medical cultivation bid in Germany finally came to a limpid end. It remains to see if there will be any legal “bangs” as it whimpers away.

The real news? There is going to be a completely new one.

A Do-Over

According to documents obtained by Cannabis Industry Journal, the Bundesinstitut für Arzneimittel und Medizinprodukte (or BfArM) issued letters to original bid respondents in the first week of July. The letters appear to have been sent to all parties who originally applied to the first bid – far from the final top runners.

The translation, from German reads:

“We hereby inform you that we have withdrawn the above-mentioned award procedure…and intend to initiate a new award in a timely manner.”

The letter cited the legal decision of March 28 this year by the Düsseldorf Higher Regional Court as the reason the agency cannot award the contract. Specifically, because of “necessary changes to the tender documents…inparticular with regard to time, we have decided to cancel the procedure altogether and initiate a new award procedure.”

Per the letter, the new procedure will be published in the Official Journal of the EU. No date was mentioned.

An Expensive Surprise and a Global Response

Conventional wisdom in the industry about the fate of the first bid has been mixed since last September when the first hint of lawsuits against the procedure began to circulate. Highly placed sources within the industry have long had their doubts about the bid’s survivability, although nobody will talk on the record. The bid process is supposed to be secret.However, it is clear that another bid will be issued

Furthermore, for the last 9 months, BfArM has maintained that the agency would go full-steam ahead with the original tender. None of the major firms contacted by CIJ about this notification would confirm that they had received a similar letter, nor would they comment.

However, it is clear that another bid will be issued. Further, this time, it is also obvious to the extent that it was not before, the applicants will indeed hail from all points of the globe. On top of that, those who are qualified to respond and who missed it last time are unlikely to sit the bid out this time around.

German Parliament Building

It remains unclear of course, what the response of the finalists to the first bid will be. Including, theoretically,legal action forpotential damages. BfArM was, technically, held at fault by the court. This means that all the companies who made it to the previous “final round” have now suffered at a minimum, an expensive time delay where other outlays of cash were also required. That includes the leasing and retrofitting of high security real estate, but of course,is not limited to the same. If any of these firms do not obtain the bid in the second go around, will they sue?

At press time, there were no cannabis industry companies willing to comment on the matter as this is still a “secret” process – even if it now apparently has come to an end for this round.

Who Is Likely To Be a Major Contender This Time?

German firms who were sleeping the last time this opportunity arose (or brushed it off as a “stigmatized” opportunity) are not likely to sit the second tender offer out. Especially given advancements in legalization if not the industry both in Europe and globally in the period of time the bid has stalled.

Add to that Canadians, Dutch, Israeli and Uruguayan firms, and the mix of applicants this time is likely to be the who’s who of the global cannabis industry. Americans are still not qualified to participate (with experience at least). Why? No federal reform.Domestic cannabis will not be harvested in Germany until at least 2020. 

It is also likely to be even more expensive. Not to mention require easy and quick access to European-based or at least easily confirmable pools of cash. It is conceivable that successful applications this time around will not only have to prove that they have a track record in a federally legal jurisdiction but will also have to be able to quickly access as much as 100 million euros. And there are not many cannabis companies, yet, who can do that, outside of the presumed top 10 finalists to the bid.

Will Bid Respondents Be Limited To “Just” the Cannabis Industry?

It is, however, absolutely possible that this time around the bid could include a more established pharmaceutical player or two who realizes that the medical market here has absolutely proved itself. Within the space of a year, according to the most recent “market report” on the industry (from the perspective of one of the country’s largest statutory insurance companies – Techniker Krankenkasse), there are now just over 15,000 patients.

Cannabis, in other words, is no longer an “orphan drug.” It is also still, however, considered a narcotic. For that reason, seasoned European and German players may upset the market even more with an entry via this tender bid.

Here is what is certain for now. Domestic cannabis will not be harvested in Germany until at least 2020. And until that time, it will be a growing, but import-based market.

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The UK Steps Up On Medical Cannabis Use

By Marguerite Arnold
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British Home Secretary Sajid Javid appears to have become the most high ranking cannabis advocate in the British government. He has just launched a review into medicinal uses of cannabis in the UK. However, this dramatic change in policy has only come after a series of high profile campaigns and escalating battles for access waged by patients and their families against a government which has remained stubbornly intransigent in the face of growing evidence of medical efficacy and reform elsewhere. In fact, the cannabis “Battle of Britain” has come to resemble the contretemps in Israel over the same issue four years ago that led to a national review of medical use and greater patient access.

GW Pharma said their product Epidiolex (for the treatment of childhood epilepsy) is being considered by the European Medicines Agency

It is expected that this recent turn of events will open better access for more British medical users. The fact that the timing of all of this comes as GW Pharma has received the right to distribute Epidiolex in the U.S. as the first FDA-approved cannabis-based medicine is not only part of the irony but the underlying problematic politics surrounding all of this. Starting with the timing of who has access to what, and under what circumstances. As it stands, Epidiolex is also the only cannabis-based drug now eligible in the United States for healthcare coverage. The rest of the market is so-far excluded from it. Unlike, it should be pointed out the situation in the UK, the rest of the Commonwealth, and of course, the EU. Starting with Germany.

A Major Win for Patients

Celebrate one for Alfie! Alfie Dingley that is – the British 6 year old with epilepsy who has become one of the most well-known faces of medical justice for cannabis users in the UK. Dingley and his parents waged a battle since last fall over his right to consume low THC cannabis oil that allows him to manage his epilepsy. He has just been granted an emergency license to import the oil from the Netherlands.

But this is also a victory for Billy Caldwell, the twelve-year-old who ended up in emergency care in hospital recently after his medical oil (from Canada) was confiscated at the border. Video of border control agents at Heathrow Airport removing the oil from the Caldwells caused a national outcry in the UK. Caldwell’s mother, Charlotte, has also waged a high profile battle for access, including at the doors of the hospital her son was admitted to last week. She has also started her own CBD company named after her son.

Like the rest of Europe, which the UK still technically is part of until Brexit, the focus here has very much been on medical use.And of course, this new indication in change of policy is seen as a major victory if not step forward for literally thousands if not millions of Britains who suffer from chronic conditions that are still drug resistant (like Epilepsy but not limited to the same.)

As he addressed the House of Commons on the issue of medicinal cannabis use, Javid said “It has become clear to me since becoming home secretary that the position that we find ourselves in currently is not satisfactory…I have now come to the conclusion that it is time to review the scheduling of cannabis.” As in the US, cannabis is still considered a Schedule I drug in the UK – with supposedly no medical efficacy. This new development clearly challenges that scheduling – but where and how?

Recreational Is Still Not On The Table

Like the rest of Europe, which the UK still technically is part of until Brexit, the focus here has very much been on medical use. This is for several reasons, including a much better and more inclusive public health system – despite imminent fears about the longevity of the British National Health Service (NHS).

UKflagIn the UK, however, further reform is not likely to move fast. Unlike anywhere else, cannabis production is essentially limited to one company – GW Pharmaceuticals – who themselves have high standing political connections that continue to oppose reform. This is not based on science but rather profit. Despite the fact that the British Isles are the largest exporter of medical cannabinoid pharmaceuticals in the world, British patients are still largely excluded from access. The only reason that these children and their parents were able to pierce the wall of privilege and profit that has driven the debate here since the late 90’s is that GW Pharmaceutical’s cannabinoid concoctions do not work on this kind of epilepsy. Plus the failure of a recent trial of their new drug (shamefully in Europe, not even conducted in the UK).

As a result, GW Pharmaceuticals and the well placed scions of British society who have profited directly and personally from this situation have little choice but to back down – but not by much. As soon as Javid announced his intention to do a review of British policy, former Tory (conservative) leader Lord William Hague called for full legalization. An initiative that as of June 19 was rejected by the government.

Is Medical Finally About To Get Its Due?

In Europe, politically, the frustration is clearly growing. And much like in the United States circa 2012, activists and advocates realize that medical access is the first step towards full reform. However here there is a marked difference to what is going on in both the U.S. and Canada. And in turn, this may bring a long overdue focus on the medical issue that has continually been obscured and overlooked by the industry itself as soon as recreational seems it is in reach.

When real and regulated medical markets are allowed to flourish, the first beneficiaries are both children and women, not middle-aged men. That is clearly the face of the “average” German patient now that the data of the first year has come in. It is also likely to be the case of the British patient as well as Europeans across the continent.In Europe, politically, the frustration is clearly growing

Further, as cannabis has become more of an accepted treatment, this is in turn forcing governments (and even the industry itself) to begin, for the first time, to consider funding widespread trials – and of the raw plant itself along with extracts and other forms the drug can be consumed in.

What does this really herald, in fact then besides relief for chronically ill patients? The first widespread scientific inquiry into the efficacy of cannabinoids outside of Israel.

And that too, is cause for celebration. Congrats Alfie and Billie! And all the people who helped move the issue forward.

German Public Health Insurer Takes First Look at Cannabis Coverage

By Marguerite Arnold
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Techniker Krankenkassen (or TK as it is also frequently referred to) is one of Germany’s largest public or so-called “statutory” health insurance companies. It is companies like TK that provide health insurance to 90% of the German population.

TK is also on the front lines of the medical cannabis discussion. In fact, TK, along with other public health insurers AOK and Barmer, have processed the most cannabis prescriptions of all insurers so far in the first year after the law change. There are now approximately 15,000 patients who have received both a proper prescription and insurance approval coverage. That number is also up 5,000 since the beginning of just this year.

In a fascinating first look at the emerging medical market in Germany, TK, in association with the University of Bremen, has produced essentially the first accessible report on approvals, and patient demographics for this highly stigmatized drug.

Because it is in German, but also contains information critical to English-speaking audiences in countries where the medical issue is being approached more haphazardly (see the U.S. and Canada), Cannabis Industry Journal is providing a brief summary of the most important takeaways from TK’s Cannabis Report.

Patient demographics from the report

Most Patients Are Women

This is not exactly surprising in a system where symptomology rather than ability to pay is the driver of authorizations and care. This is also exactly the opposite trend when it comes to gender at least, that emerged in Colorado on the path to medical legalization circa 2010-2014. While chronic pain is still the most common reason for dispensation, the drug is going mostly to women, not men, in their forties, fifties and sixties.

Even Chronically Ill Patients Are Still not Getting Covered

This data is super interesting on the ground for both advocates and those who are now pushing forward on “doctor education” efforts that are springing up everywhere. The only condition for which cannabis was approved 100% was for patients suffering from terminal cancer pain from tumours. In other words, they were also either in hospice or hospital where this kind of drug can be expedited and approved quickly. Other conditions for which the drug was approved were both at far lower rates than might have been expected (see only a 70% approval rate for Epilepsy and a 33% approval rate for Depression).

Conditions and degrees of coverage chart from the report

Expect approval rates to change, particularly for established conditions where the drug clearly helps patients, even if there are still questions about dosing and which form of cannabis works best, along with improved research, data and even patient on boarding.

Also expect interesting data to come out of this market for patients with ADHD (or ADHS).

Imported Cannabis Is Very Expensive

A table showing the different medicines prescribed in Germany

TK and other public health insurers are also on the front lines of another issue not seen in any other legalizing cannabis country at the moment. An eye-wateringly high cost per patient. The biggest reason? Most of the medical cannabis in the market is being imported. This will change when more cannabis begins to enter the market from other EU countries (see Spain, the Baltics and Greece) and, yes, no matter how many elements of the German government are still fighting this one when it begins to be cultivated auf Deutschland.

Most German Patients Are Still Only Getting Dronabinol

If there was one thing that foreign investors should take a look at, it is this. One year after legalization, just over 1/3 of those who actually qualify for “medical cannabis” are in fact getting whole plant medication or a derivative (like Sativex).

This means only one thing. The market is continuing to grow exponentially over at least the next five to ten years.

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Most German Patients Are Still Only Getting Dronabinol
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Aurora Expands Canadian (And Global) Footprint

By Marguerite Arnold
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With the summer season (and recreational reform) fast approaching and the continued growth of the European medical market, Canadian LP Aurora has continued to power forward with another corporate acquisition. This time, the firm is medical cannabis firm MedReleaf (TSE:LEAF). The price? $3.2 billion in stock.

Aurora shareholders will now own 61% of MedReleaf.

The firm has also, of course, solidified its place as a global leader in the cannabis space with production capacity of over 570,000 kilos of cannabis a year.This purchase will absolutely ensure that the company is in a strong position

According to a statement by chief executive Terry Booth, “Our complementary assets, strategic synergies and strong market positioning will provide us with critical mass and an excellent product portfolio in preparation for the adult consumer use market in Canada.”

It also does a bit more than that.

With the German cultivation bid in what appears to be at least a three to six month delay, exports, including from Canada, are the only real way into Europe’s largest cannabis market. And Aurora, with it’s on the ground partner, Pedianos, isright in the middle of it. This purchase will absolutely ensure that the company is in a strong position as the next level of cannabis reform begins to unfold particularly in Europe.

Cannabis Is SO Expensive!

In fact, per this report just produced by one of the leading German public health insurers, Aurora, via Pedianos, and MedCann (the company that became both Spektrum Cannabis and bought out by Canopy Canada), appear to be the two Canadian LPs supplying the vast majority of all reimbursed medical cannabis to German patients. Further the vast majority of product is still coming from Canada – not the satellite grow or production facilities now being built in Portugal (Tilray), Denmark (Aurora and Canopy), Spain (Canopy) or anywhere else in Europe where legal cultivations are being established.

Techniker Krankenkasse report
“The Cannabis Report” produced by Techniker Krankenkasse (TK) and the University of Bremen, p.20

However, this also makes for an expensive product here in Germany, land of the generic drug (and where most of them can be bought by consumers, with a prescription, at a regular pharmacy for about $12). In fact, this report was produced in part to underscore the still-evolving medical position on the use of medical cannabis and its efficacy. This highlights how much Germany’s import policy is now costing even public insurers.

What is even more intriguing about the TK report is that the Germans are clearly moving into new research territory. Sure AIDS, chronic pain and muscle spasms (in particular MS) are conditions for which the drug is increasingly being prescribed, but so is ADD. And research studies are now mushrooming around the country.

The Germans have engaged on the medical cannabis efficacy question. And while it is still unclear what doses and of what kind of cannabinoid, have yet to be standardized into protocols, such conversations are well on their way.

And Aurora is also, of course, right in the middle of them.

Another Aurora Acquisition

Given the importance and size of the German market, in particular, it is also no surprise to see another strategic Aurora acquisition coming less than a week after the announcement of this report in Berlin. Specifically, Aurora has also just sunk another 1 million in an investment in CTT– an Ontario-based firm leading the development of thin film wafers that can provide dose specific, smoke free delivery of medical cannabinoids.

The Teutonic cannabis market is clearly in the company’s sights. Not to mention absolutely driving investment and positioning strategy both at home and abroad.

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Epidiolex Gives GW Pharmaceuticals Boost In Global Markets

By Marguerite Arnold
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Epidiolex-GW

GW Pharmaceuticals scored a significant victory in the United States with its cannabis-based epilepsy drug Epidiolex in mid-April. The company received approval from a U.S. Food and Drug Administration (FDA) panel for its use in treating two forms of drug-resistant epilepsy.

The drug was granted “orphan drug” status in the EU a year ago.Will this be enough to move the conversation forward about cannabis as medicine in the United States? 

So what does the future hold for this drug and a company, which has visited this space before? Remember Sativex?. The Company now faces real competition from a raft of companies moving into this space from just about everywhere – both from Canada and of course Europe itself.

The FDA Might be on the Verge of Approving its First Cannabis-Based Drug

It is not like this is either the FDA’s or GW Pharma’s first discussion about the medical efficacy of cannabinoids. Sativex, a mouth spray containing THC, was never granted approval in the United States for the treatment of MS – although it received such approvals in Europe.

Epidiolex-GWIf the FDA approves Epidiolex (made from CBD), it will be the first cannabinoid-based drug approved in the United States by the federal agency.

Will this be enough to move the conversation forward about cannabis as medicine in the United States? What will happen in the EU?

A Divergent and Highly Different Drug Market

Will the FDA finally approve at least one form of a CBD-based drug? The chances are that Epidiolex might finally move the agency to approve. However,this is not, despite the hype that the company has made in the press about this, the first cannabinoid-based drug to be approved in the United States. It might be, however, the first drug based on actual natural cannabinoids rather than synthetic ones that it approves for some purpose. Both Cesamet and Dronabinol (or Marinol) are synthetic cannabinoid drugs approved for several conditions from chronic pain caused by chemo to Parkinson’s.

GW logo-2But those who are hoping that this drug approval might open the floodgates at the FDA for startersshould take a pew. While Sativex was not approved in the United States, it was made available after 2011 for MS patients, particularly in Germany, which has the highest rate of MS of any European country. The problem? It was just too expensive for most people to afford – since their insurance would not cover it. And doctors were even more resistant to prescribing than they are now. So even getting a prescription was almost impossible.

That conversation was different in Europe post-2013, and there were people who managed to get a doctor to write a prescription not to mention afford the eye-watering prices sans insurance coverage.

That said, given the choice between whole plant meds, most people still prefer bud cannabis to the spray variety. And in Europe right now, that is what is on the table.

What Will This Mean in the US vs Europe?

In the US, the first thing that FDA approval will mean is drug sales for only one branded drug. That is the cynicism at play here. Furthermore, it also neatly dodges the THC issue.

In Europe? Particularly Germany? This development is not likely to make much of a dent. GW is competing with every single Canadian producer with flower-based oil – and on both the medical and non-medical CBD front. That also now includes local producers. Further, this is a market which prizes genericized drugs over name brands. In France, the distribution of Sativex was held up, primarily because of the row over cost. And who would pay.

It is also unlikely that the FDA approval in the United States will change the discussion either in the US on a federal level – or in Europe.

The most important place this news already made a dent? GW Pharma’s stock price – at least temporarily. It is also a spot of good news the company really needs. In February, the company’s GWP42006 drug designed for focal seizures (drug resistant epilepsy) failed to outperform placebo results and wiped 5% off the company’s stock.

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Green Relief Enters European Market Via Switzerland

By Marguerite Arnold
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GreenRelief Logo

It is old news that Canadian companies are entering the European market. And it is also no stop-the-presses flash that Germany is a big prize in all of this. But there are other Euro markets to watch right now. Switzerland is one of them.

Look for the Canadian influx here too.

One of the more interesting entrants this month? Green Relief – a Canadian LP with a really unique twist. They are the only company in the world to produce cannabis oil from flower grown with aquaponics. This unique method creates unbelievably “clean” cannabis with no pesticides – and no residue of them.

It also sets the company up for a really unique market opportunity on the ground outside Canada. Especially as they have now just announced a partnership with two Swiss companies– Ai Fame GmbH and Ai Lab Swiss AG. Both companies have been leading European pharmaceutical companies since the turn of the century. The idea is to leverage all three company’s intellectual capital with Green Relief’s additional and first international investment with an eye to the entire European cannabis market. Ai Fame specializes in cultivation, manufacturing, sales and distribution to both the food and medical sectors. Ai Lab Swiss AG operates as a laboratory and testing facility.Less than three weeks before Green Relief publicized their European announcement, there were also strategic developments afoot at home.

From this unique perch in the Swiss canton of St Gallen, the three companies are setting up to conquer Europe.

Why Is Switzerland So Strategic?

Switzerland has been on the legalization track since 2011. As of this date, the Swiss government began allowing adults to buy and use CBD-only cannabis. Shops were allowed to obtain licenses. A trickle of sales began. However, rather suddenly, as reform hit Europe, the craze took off. Last year, for the first time, the industry generated a significant amount of revenue (close to $100 million). That is $25 million for the government via taxes- just on CBD sales. Even more intriguing for those looking for market opportunity across borders? Less than a week ago, the German-based budget discount store Lidl just announced they were carrying smokeable CBD  – in Swiss grocery stores. The leap across the border is imminent.

That has opened up other conversations, including the “legalize everything” push that makes an awful lot of sense to the ever tax-aware Swiss. This is a push afoot just about everywhere across the continent, including, of course, just across the border in Germany.

GreenRelief LogoThe cities of Zurich and the cantons of both Winterthur and St Gallen (home of the Swiss companies behind the new venture with Green Relief) have already indicated that they will not pursue possession fines for those busted with 10 grams or less– no matter what kind and even of the THC variety.

Read between the lines, and it is clear that the cannabinoid conversation locally has begun to attract the Canadians. And not just because of the many opportunities of the Swiss CBD market – but the huge medical and THC German and European opportunities now opening beyond that.

No matter which way Green Relief and their new partners slice it, they are now in the game – and across Europe – with a unique new play and product, and further one set to enter both the medical THC and “consumer,” albeit still CBD, market now burgeoning.

A Cross Market Play

Here is the truly interesting part about this new announcement. Less than three weeks before Green Relief publicized their European announcement, there were also strategic developments afoot at home. Cannabis Growth Opportunity Corporation also just announced an investment in Green Relief. The share purchase agreement netted Green Relief $750,000 in both cash and common shares.

With this, Green Relief seems to have set sail on its European expansion. Look for more interesting turns to this developing saga soon!

Ex-Im Europe: The Face of the Current Cannabis Market

By Marguerite Arnold
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In the United States, the idea of transporting cannabidiol (CBD), let alone medical cannabis across state lines is still verboten. As a result, a patchwork of very different state industries has sprung up across the map, with different regulatory mandates everywhere. While it is very clear that California will set the tone for the rest of the United States in the future, that is not a simple conversation. Even in-state and in the present.

In the meantime, of course, federal reform has yet to come. And everywhere else, there is a very different environment developing.

In Canada, “territorial” reform does mean there will be different quality or other regulatory guidelines depending on where you are. The main difference between the territories appears to be at point of retail – at least for now. Notably, recreational dispensaries in the East will be controlled by the government in an ABC package store model. That will not be the case across all provinces however. Look for legal challenges as the rec market gets underway.

EU flagIn Europe, the conversation is already different – and based on the realities of geopolitics. Europe is a conglomeration of federally governed nation-states rather than more locally administered territories, supposedly under federal leadership and control (as in the US). That said, there is common EU law that also governs forward reform everywhere now, just as it hindered national drug reform until a few years ago on the cannabis front.

However, now, because European countries are also moving towards reform but doing so in very different ways in an environment with open borders, the market here is developing into one of the most potentially fertile (and experienced) ex-im markets for the cannabis plant anywhere. On both the consumer and medical fronts, even though these labels mean different things here than they do elsewhere.

The Drivers

Medical reform in Europe basically opens the conversation to a regulated transfer of both non and fully loaded narcotic product across sovereign national borders. This is already happening even between nation-states where medical (read THC infused) cannabis is not federally legal yet, but it is has been accepted (even as a highly restricted drug). This means that Europe has already begun to see transfer of both consumer and medical product between states. In the former case, this is also regulated under food and cosmetic safety laws.

Cannabis in this environment is “just another drug.”While a lot of this so far has been via the strategic rollout of the big Canadian LPs as they attempt to carve up European cannabis territory dominance and distribution like a game of Risk, it is not limited to the same.

Pharmaceutical distributors across Europe are hip to the fact, now, that the continent’s largest drug market (Germany) has changed the law to cover cannabis under insurance and track its issuance by legal prescription. So is everyone in the non-medical CBD game.

As a result, even mainstream distributors are flocking to the game in a big way. Cannabis in this environment is “just another drug.” If not, even more significantly, a consumer product.

Game Time

The race for Europe is on. And further, in a way that is not being seen anywhere else in the world right now. And not just in pharmacies. When Ritter Sport begins to add cannabis to its famous chocolate (even if for now “just” CBD) for this year’s 4/20 auf Deutschland, you know there is something fundamental and mainstream going on. Lidl – a German discount grocery chain that stretches across Europe, has just introduced CBD-based cannabis edibles – in Switzerland.

As a result of this swift maturation, it is also creating from the beginning a highly professional industry that is essentially just adding cannabis to a list of pharmaceutical products already on a list. Or even just other grocery (or cosmetic) items.

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Spektrum, Alcaliber and Canopy are part of some of the larger deals in Europe

In general, and even including CBD, these are also products that are produced somewhere in Europe. As of this year, however, that will include more THC from Portugal, Spain and most certainly Eastern Europe. It will also mean hemp producers from across the continent suddenly have a new market. In many different countries.

This means that the industry itself is far more sophisticated and indeed used to the language and procedures of not only big Euro pharma, but also mainstreamed distribution (straight to pharmacy and even supermarket chains).

It also means, however, understanding the shifting regulations. In general, the focus on ex-im across Europe is also beginning to standardize an industry that has been left out of the global game, on purpose, for the last 100 years. Medical cannabis, grown in Spain under the aegis of Alcaliber (a major existing opioid producer) can enter Germany thanks to the existing partnership with Spektrum and Canopy, who have a medical import license and source cannabis from several parts of Europe at this point. It also means that regular hemp producers, if they can establish the right brand and entry points, have a new opportunity that exists far outside of Switzerland, to create cross-European presence.

And all of this industry regulation is also setting a timeline, if not deadline, on other kinds of reform not seen elsewhere, anywhere, yet.

margueriteICBC

Berlin’s ICBC: Meeting the European Cannabis Industry

By Marguerite Arnold
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margueriteICBC

The International Cannabis Business Conference (ICBC) in Berlin is now officially over. The speeches have been made, the parties have been attended. The hard-working crew behind it all has wrapped up, checked out and is off to Vancouver. And most of all, the marathon of meetings and deal discussions that were the mark of this budding and certainly by now established market are done. Even if there are still details to be ironed out in all the new business in the coming months.

As always, the dilemma for conference attendees was how to spend the limited time in this concentrated cannabis gathering. With all of the networking and excitement, people still wanted to hear the experts who spoke on topics ranging from cannabis financing to actually doing business in Germany to new medical advances. Traffic in the expo section was also heavy, as attendees visited the wide range of vendors. Producers and distributors of both plant and derived product were present, along with vape companies brave enough to compete with Storz and Bickel on their own turf, various tech solutions and of course, international consultants.

As the dust clears and the contracts get signed, what are the takeaways from the second edition of the ICBC in Berlin?

Germany Is Going Green

The simplest takeaway? The ICBC Berlin is not a market to be missed in the future for the global cannabis executive. Even if you are an American firm (and for the most part still largely excluded from a rapidly expanding worldwide trade that is establishing itself now with authority), you need to be here. The contacts you make are global, and you do not want to be left out. For foreign investors interested in this market, it is a must. For everyone else, this is a meet and greet, not to mention education, barnone. The German medical and even prosumer CBD market is attracting the world.

Yes, there have been ups and downs even in the last three weeks that include the crashing of the German bid along with news stateside that the Trump Administration is going to hang Jeff Sessions out to dry for Russia with his latest “Make American States Great For Cannabis Again” contortion.

Guenther Weiglein
Guenther Weiglein, activist patient, being interviewed in front of MedPayRx booth

But here on the other side of the Atlantic, it is clear that the federal cannabinoid horse has left the barn. There are now rumorsfloating that the bid is not yet entirely dead (now apparently in a legal purgatory of appeals and even potentially “bid amendments”) that nobody is willing to go on record to discuss. Beyond that, however, as was clear from the frenzied deal-makingon the floor and off it at the ICBC, the market is open, distributors are finding new channels to move product, and patients demanding access are not leaving the streets.

Far from it. In fact, the budding nascent umbrella national non-profit campaign designed to open access for patients and educate doctors, The German Patients Roundtable, had a huge second meeting during the conference, with both German and international attendees from countries including Israel and South Africa.

The CBD and THC genie cannot be stuffed back into the local bottle. And everyone knows it. This is federal medical reform, and even better, covered under German national public health insurance. Despite the hiccups and challenges that still remain, this is open blue water for a medical market that has never existed anywhere to date.

ICBC logoAnyone with a GMP facility, Euro cleared export rights and crop or product ready to ship will be welcome here in a market that at this point, cannot get enough plant or oil. Edibles are still a to-come discussion.

To the extent that this is also negative, it is very clear that the market is still highly inefficient. Producers who do have productare not being found by those on the ground who want to sell it to patients. That will also begin to change. But for now, many on the ground are playing a digitalized Rolodex game of “who do you know” that still consists of personal emails between conference-met colleagues if not LinkedIn contacts and impromptu (and freebie) favors. Those who hope to gain an income merely by connecting the source of product and outlets the old fashioned way are also about to be left in the dust by a market that will not be held back and activist businesses who are eyeing both the United States and Canada right now (if not Israel and Australia), and translating all of that into both euros and German.

It is also very clear that the savvy Germans who were largely left out of the bid proceedings last time do not mean to sit this party out – and are angling to get into the game however they can. This is taking some interesting forms, but processing and testing are going to be huge issues of the market here for a long time to come. And so is home-grown, high-quality CBD. The German government is even offering tax credits for growing certain kinds of hempright now. Sound familiar Kentucky?

Trends and Takeaways

It is not just the Canadians who are going to get market share. The Canadian LPs are still in a good position to dominate the early market but it is clear that there is still room for others to enter. Whether the government allows an appeal of the court’s decision to hold up, there is a quick bid “redo” for the top 10 finalists, or a second bid, the market has now arrived and is in its second year.

margueriteICBC
Marguerite Arnold presents on the impact of blockchain on the cannabis industry

CBD is going to be an important path to other kinds of provision and cultivation. Despite the widespread misconceptions about Germany being a “CBD only” market (it is not), it is clear that a consumer CBD only strategy will be an interesting path into the market here but not one for the faint of heart. The Canadian companies in particular are beginning to move into the realm of big pharma (their market caps certainly are). But it is also clear that more local competition is hip to the same. And as a result, even this part of the market will be a highly competitive one.

German firms are first at this gate, beyond the big Canadian LPs, but they are not the only ones now in the market. See Dutch, Austrian and Swiss firms, many with pharmaceutical company credits and market entry already under their belt.  Not to mention producers from both Greece and the Baltics. Everyone on the import side is eyeing the opening market and stalled bid as a fantastic opportunity. Look for products from these locales as testing and certification protocols become more effective.

Central to all of these developments? The conference is theplacefor the global cannabis industry to meet and get to know one another, put together by Alex Rogers and a seasoned, international team behind the ICBC.

german flag

German Court Stops Pending Cannabis Cultivation Bid On Technical Fault

By Marguerite Arnold
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german flag

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.

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Dr. Pierre Debs, managing director of Spektrum Cannabis
Photo: ICBC, Berlin

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
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.”

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Q1 European Cannabis Industry Update Report

By Marguerite Arnold
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european union states

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

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

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

Germany

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

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Photo: Ian McWilliams, Flickr

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

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

Spain, Italy, Switzerland, Portugal, Denmark & Holland

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

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

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

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

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

Greece

Parthenon, Athens, Greece
Photo: Kristoffer Trolle

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

Poland

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

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

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

The UK

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