Pubdate: Sat, 23 Jul 2016
Source: Globe and Mail (Canada)
Copyright: 2016 The Globe and Mail Company
Contact:  http://www.theglobeandmail.com/
Details: http://www.mapinc.org/media/168
Authors: Laurent Bastien & Mike Hager
Page: A4

MEDICAL POT COMPANIES AIM TO GROW EXPORT BUSINESS

Canada's licensed medical cannabis producers are searching for
opportunities to expand overseas while Ottawa works on its plan to
legalize recreational marijuana next spring, with two producers
recently securing licences to sell their products in Europe.

The latest company to announce plans to export marijuana is Canopy
Growth Corp., the largest of the country's two dozen licensed
producers. Canopy Growth said it would soon begin selling dried
cannabis in pharmacies across Germany after securing an export licence
from Health Canada on Wednesday. The company also said it had signed
partnerships to share its technical expertise with medical marijuana
companies in Brazil and Australia.

Last month, B.C.-based Tilray announced it had shipped cannabis oil
capsules to patients in Croatia for the first time.

Canopy Growth chief executive officer Bruce Linton said his company is
preparing to enter Germany, which will legalize medical marijuana next
year. Plans for opening a factory inside the country have also been
drawn up.

"This is a very substantial market, and it's probably the best place
to enter the European Union from," said Mr. Linton, whose publicly
traded company sells cannabis in Canada under the Tweed and Bedrocan
brands.

John Fowler, president of Supreme Pharmaceuticals, said licensed
Canadian producers are already operating under a "world-leading
regulatory scheme" for medical marijuana, so they offer an attractive
option for other governments looking to create their own federal
system for growing and delivering the drug.

"Other countries are looking both at our regulator and at our
regulated companies," he said.

While many of his competitors are looking for opportunities abroad,
Mr. Fowler said his company is focused on the robust domestic market
because it does not want to face new regulatory hurdles or spread its
management or capital thin by looking for opportunities elsewhere.

He said the Health Canada-run medical marijuana industry is growing
its overall patient base by about 10 per cent each month, with more
than 60,000 people being prescribed dried buds or oils since the
system was overhauled three years ago.

"These are fantastic numbers for any industry, and well ahead of
Health Canada's projections of 400,000 [patients] by 2020," Mr. Fowler
said.

Still, there are roughly 500,000 medical cannabis users in Canada over
the age of 25, according to a survey commissioned by Health Canada -
the majority of whom are not purchasing the drug from licensed
commercial producers, with many turning to the black market or
dispensaries.

Khurram Malik, a cannabis analyst at Jacob Securities, said licensed
cannabis growers are seeking to expand their businesses abroad,
because of a dwindling demand for medical pot at home.

"There's all this product being produced sitting up in people's
inventory shelf and not being sold. That's the problem. So it's
forcing producers to look elsewhere sooner than they would have," he
said.

For marijuana importers, the cannabis grown by licensed producers in
Canada is especially attractive, Mr. Malik said.

"We're the only federal jurisdiction that can produce large-scale
cannabis at pharmaceutical-grade quality. When you look at other
jurisdictions, it's typically food grade. And there's a huge
difference between food grade and pharmaceutical grade," he said.
"That consistency on that scale doesn't exist anywhere else in the
world."

It's still unknown whether small-scale producers will be able to
supply the recreational market, but MP Bill Blair, head of the
government's push to legalize, has praised the ability of existing
medical growers to provide a secure, high-quality product.
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MAP posted-by: Matt