Canadian cannabis producers set their sights on global domination

Canadian cannabis producers set their sights on global domination
Tilray is exporting its product, but also building a new medical marijuana operation in Portugal. (Tilray)

As medical marijuana is legalized around the world, Canadian producers are ready to export it

Medical marijuana consumers in Prague rang in 2018 with a new Canadian import, Tilray Milled Cannabis, a high THC marijuana product grown on Vancouver Island.

The Czech Republic is just the latest nation to sell Canadian weed, joining Germany, Australia, New Zealand and a growing list of other nations which are turning to Canada as a safe and legal source for medical grade cannabis.

In recent months, more than a dozen countries have legalized medical marijuana. New laws are pending in at least a dozen more as national regulators and even the World Health Organization recognize legitimate medical uses for a drug which had long been banned under international treaties.

The moves have sparked an unprecedented demand for legally grown, high quality marijuana, as well as the oil which is extracted from it. Seven Canadian producers have been granted licences to export the crop. By the end of March they will have sent 528 kilograms of dried cannabis flower and 911 litres of oil overseas. That may well be just an initial trickle, as the floodgates open on an international medical cannabis market.

“I’ve never experienced anything like this,” says Ranjeev Dhillon, a corporate lawyer and partner at the law firm Bennett Jones. Most of his practice now centres on the cannabis export business.

Brendan Kennedy of Tilray says Canada is the source of the safest product when regulators in other countries go looking for medical marijuana. (Evan Mitsui/CBC)

“I think it means that we’ll be a global player,” he says, stressing this is a positive development for the Canadian economy. “This could be our opportunity to be viewed the same as we are in mining or hockey. We’ll be world class and be world leaders and I think that will stay to be the case for a very, very long time.”

Medical research forcing an end to prohibition

For decades an international ban on the production and use of cannabis kept to a minimum any legitimate research into potential medical uses. Prohibition ensured that marijuana cultivation stayed in the hands of illegal growers, and distribution was limited to the criminal underground.

But many users saw value in cannabis as treatment for a variety of conditions, ranging from controlling epileptic seizures to pain relief to stress control.

Israeli scientist Raphael Mechoulam began limited research on the drug in the early 1960s, which led to the discovery of the human endocannabinoid system. By the mid-1990s, scientists determined that cannabinoid receptors play a vital role in the function of the human body. For the first time synthetic cannabinoid derivatives were approved for medical use, primarily for the treatment of nausea and wasting syndrome.

At the same time anecdotal evidence was building to suggest cannabis could have other, more widespread medical uses. Patients who claimed benefits from cannabis went to court seeking the right to use marijuana as medicine without facing the risk of criminal prosecution.

In 2000 the Ontario Court of Appeal ruled that Terry Parker, a man with severe epilepsy, should have the right to use marijuana to moderate his severe seizures.

One year later, Canada’s Medical Marijuana Access Program was introduced, allowing patients who had obtained a doctor’s consent to grow their own marijuana under a special permit. By 2013 more than 28,000 Canadians had been granted personal use production licences, leading to a flood of unregulated home-grow operations, and along with it a risk of fires, mould contamination in homes, and legally grown weed being diverted to the black market.

In an effort to crack down on the home grow-ops, the Harper Conservative government introduced new legislation that established legal grow operations which could provide medical marijuana through a mail order service. The Marijuana for Medical Purposes regulations, enacted in 2014, set Canada apart as the first nation to establish a regulated commercial cannabis cultivation industry.

Canadian pot finds a role in the world market

As Canada moves towards legal recreational weed in July, the number of licensed growers has swelled to 84, production is skyrocketing, and research into new growing techniques and improved strains is increasing exponentially. This has placed Canada in a unique role as other nations scramble to find safe and legal supplies of medical cannabis.

Cam Battley, executive vice president of Aurora, shows off Aurora Vie’s Pointe-Claire, Que., facility. Canadian producers have expertise in greenhouse technology, extraction methods, strains and genetics. (CBC)

“When regulators in other countries are looking for a product, Canada is really the source of the safest product. It’s the safest bet,” explains Brendan Kennedy, the CEO of Nanaimo-based Tilray, a pioneer in cannabis exports.

Tilray is among several Canadian producers already exporting to Germany, which established a widespread marijuana access program last spring. Not only is cannabis stocked in German pharmacies, the government pays for the drug under its government health insurance program.

Until it can establish a domestic industry, Germany is importing from Canada. Along with Tilray, Canadian producers Aurora, Cronos and Canopy Growth are tapping the German market. Aurora has even gone a step further, purchasing pharmaceutical supplier Pedanios, with an eye to expanding its distribution in the European market.

Following Germany, several other European countries, including Greece, Italy, Poland and the Czech Republic, passed new medical cannabis laws. Several others are following. A report published in November places the value of the European cannabis market at $84 billion Cdn a year.

That’s led Tilray to begin construction of a $30-million production facility in Portugal to help supply the growing market.

Beyond exports, Canada has expertise

“Part of the reason we decided to invest in a cultivation facility in Portugal was that we also saw a massive increase in demand for medical cannabis product in the EU,” explains Kennedy, who sees a bright future well beyond Canadian exports.

Canadian expertise in growing and greenhouse technology, extraction methods, strains and genetics, along with plain old business know-how, are also in demand. In addition to exports, Canada’s cannabis companies are also teaming up with local partners to build facilities in Germany, Denmark and Israel.

Australia is seen as another prize for Canadian producers. When it announced last February that it would allow importation, Canadian producers Aurora, CannTrust, Canopy, MedReleaf and Tilray swooped in, not only with bags of weed and vials of oil, but with partnerships to build facilities there.

Peru and Mexico have also passed legislation to legalize medical cannabis, and Canadian companies are promising further announcements soon. Overall, they say, the world market could be worth around $200 billion.

What it all means

The rapid legalization of medical cannabis has spurred new research into potential treatments using the drug. In Israel, where the medical research began, there are about 120 trials underway using components of the marijuana plant.

Neil Closner, CEO of Ontario-based MedReleaf, believes Canadian medical marijuana producers have the potential to become global giants. (Canadian Press)

As cures and treatments are discovered and proven, the role of cannabis is sure to expand, creating even greater potential beyond flowers and oil. CEO of Markham-based MedReleaf Neil Closner believes at least two or three of Canada’s producers will become global giants.

“I think overall who wins is Canada. I think we’ve got a leg up on the rest of the world, which is very exciting at a national level for us. I’d like to think that MedReleaf is strongly positioned to be one of the few handfuls of global winners.”

And while California is the latest U.S. state to legalize marijuana, American producers are shut out of the global market because of the federal prohibition on the drug.

That leaves Canada room to pursue the international market and all the potential riches that go with it.

By Terry Reith Courtesy CBC News

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Pennsylvania Approves First Medical Cannabis Dispensary

Pennsylvania Approves First Medical Cannabis Dispensary

HARRISBURG, Pa. (AP) — Pennsylvania officials on Thursday announced the first all-clear for a medical marijuana dispensary in the state to begin providing cannabis once it becomes available from a licensed grower.

The Keystone Canna Remedies dispensary in Bethlehem received the state authorization, a major milestone in Pennsylvania’s new medical marijuana program.

“It means there’s going to be safe and effective access to a new medicine that can help (patients) in a wide variety of ways,” said Victor Guadagnino, the company’s co-founder and chief of business development. He said the company sees cannabis as a way patients can take a more active role in their own health care.

“We are one step closer to providing medical marijuana to patients with serious medical conditions who desperately need this medication.”

Gov. Tom Wolf

Nine entities have been approved to grow and process medical marijuana, and their products are expected to be available to patients in the coming four months.

Gov. Tom Wolf said the approval is good news for patients and their caregivers.

“We are one step closer to providing medical marijuana to patients with serious medical conditions who desperately need this medication,” the Democratic governor said.

Guadagnino, who lives in New York City, said the dispensary in Bethlehem will open this month for educational workshops and registration assistance, but he does not expect to have the product available until mid-February.

The Bethlehem dispensary, which Guadagnino said is part of their multimillion-dollar medical marijuana investment in the region, will start with four or five employees and grow based on patient demand. The company also plans to eventually open two other dispensaries in the Lehigh Valley.

Wolf vowed to do whatever he can “to protect Pennsylvania patients.”

Acting Health Secretary Dr. Rachel Levine said officials expect more dispensaries to open in the coming weeks.

The announcement of the first dispensary came as the U.S. Justice Department said federal prosecutors are being given more latitude to pursue criminal charges involving marijuana. In response, Wolf vowed to do whatever he can “to protect Pennsylvania patients.”

A 2016 state law legalized medical marijuana for people suffering from one of 17 qualifying conditions, including AIDS, autism, cancer, epilepsy, post-traumatic stress disorder, chronic pain and Crohn’s disease.

More than 10,000 people have signed up. Among them, about 1,200 patients already have been certified by physicians to use medical marijuana. About 570 doctors are being trained or have completed training to be allowed to certify patients.

The law permits pills, oils, vapor or liquid marijuana, but not marijuana in plant form or what are considered edibles.

Courtesy The Associated Press / Leafly

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California officially enters era of legal marijuana with new rules starting today

California officially enters era of legal marijuana with new rules starting today
‘At the end of the day it’s a giant step forward, and we’ll have to work out the kinks as we go,’ says Khalil Moutawakkil, co-founder and CEO of KindPeoples. (Marcio Jose Sanchez/Associated Press)

State was first to legalize medical weed, but follows others in legalizing recreational marijuana

Californians may awake on New Year’s Day to a stronger-than-normal whiff of marijuana as America’s cannabis king lights up to celebrate the state’s first legal retail pot sales.

The historic day comes more than two decades after California paved the way for legal weed by passing the nation’s first medical marijuana law, though other states were quicker to allow the drug’s recreational use.

From the small town of Shasta Lake just south of Oregon to San Diego on the Mexican border, the first of about 90 shops licensed by the state opened Monday to customers who previously needed a medical reason or a dope dealer to score pot.

In November 2016, California voters legalized recreational marijuana for adults 21 and older, making it legal to grow six plants and possess an ounce of pot. The state was given a year to set retail market regulations that are still being formalized and will be phased in over the next year.

“We’re thrilled,” said Khalil Moutawakkil, founder of KindPeoples, which grows, manufactures and sells weed in Santa Cruz. “We can talk about the good, the bad and the ugly of the specific regulations, but at the end of the day it’s a giant step forward, and we’ll have to work out the kinks as we go.”

The long, strange trip to get here has been a frustrating one for advocates of a drug that in the federal government’s eyes remains illegal and in a class with heroin.

The state banned “loco-weed” in 1913, according to a history by the National Organization for the Reform of Marijuana Laws, the pot advocacy group known as NORML. The first attempt to undo that by voter initiative in 1972 failed, but three years later felony possession of less than an ounce was downgraded to a misdemeanour.

In 1996, over objections of law enforcement, the drug czar under President Bill Clinton and three former presidents who warned it was an enormous threat to the public health of “all Americans,” California voters approved marijuana for medicinal purposes.

From the small town of Shasta Lake just south of Oregon to San Diego on the Mexican border, the first of about 90 shops licensed by the state opened Monday to customers who previously needed a medical reason or a dope dealer to score pot. (Richard Vogel/Associated Press)

While the rollout of grassroots collectives of growers and dispensaries where marijuana could be sold to patients was at times messy, the law led to wider acceptance of the drug as medicine.

“The heavens didn’t fall,” said Dale Gieringer, director of California NORML. “We didn’t see increased youth drug abuse or increased accidents or crazy things happening as our opponents predicted.”

Today, 28 other states have adopted similar laws. In 2012, Colorado and Washington became the first states to legalize recreational marijuana. California is one of five states, plus Washington, D.C., that followed suit. Retail sales are scheduled to begin in Massachusetts in July.

With wider acceptance, the aroma of marijuana smoke has become more pervasive in parts of California, and use accelerated after the legalization vote.

Even with other states as models for what works and what can go wrong as marijuana strains known as Sweet Skunk, Trainwreck and Russian Assassin hit the street, the next year is expected to be a bumpy one as more shops open and more stringent regulations take effect.

Alex Traverso, a spokesman for the state’s Bureau of Cannabis Control, said Sunday that the agency has been working throughout the weekend to process as many licenses as possible. He says licenses will also be issued on New Year’s Day. The agency so far has issued more than 300 licenses statewide for marijuana distributors, retailers and cultivators, he said.

The California Police Chiefs Association, which opposed the ballot measure, remains concerned about stoned drivers, the appeal the drug will have for young people as it becomes more normalized, and the cost of policing the new rules in addition to an existing black market.

“There’s going to be a public health cost and a public safety cost enforcing these new laws and regulations,” said Jonathan Feldman, a legislative advocate for the chiefs. “It remains to be seen if this can balance itself out.”

For consumers, the most surprising revelation may be the dearth of places to get ganja. In theory, buying a joint, loose weed or a hash brownie should be as easy as finding a craft beer, but options are few as some cities have rejected retail sales and others have taken a more mellow approach toward licensing operations.

Shops at first will be able to sell marijuana harvested without the regulatory controls that eventually will require extensive testing for potency, pesticides and other contaminants. (Marcio Jose Sanchez/Associated Press)

Pot-friendly San Francisco, a counter-culture hub where marijuana smoke has been a fixture for half a century, was late to establish local regulations and won’t have any retail outlets open for business until later in the week. It’s a similar situation in Los Angeles.

Meantime, Fresno, Riverside, Anaheim, Bakersfield and all of surrounding Kern County have prohibited pot shops, and Long Beach has a temporary ban.

For shop owners lucky enough to receive temporary licenses from the state and clear local red tape, anticipation is high.

Will Senn, founder of Urbn Leaf in San Diego, said the shop’s four phone lines have been ringing off the hook for three months, but he’s not sure what to expect when doors open at 7 a.m. with extra security and more than 60 employees at the ready for sales and deliveries.

“We’re preparing for the worst and hoping for the best,” Senn said. “We never want lines out the door and around the block. That’s not what we’re trying to accomplish here.”

Shops at first will be able to sell marijuana harvested without the regulatory controls that eventually will require extensive testing for potency, pesticides and other contaminants. A program to track all pot from seed to sales also will be phased in, along with other protections such as child-proof containers for pot products.

Pot shop founder Jamie Garzot said she’s concerned that when the current crop dries up, she’ll encounter a shortage of marijuana that meets state regulations. The irony is that her 530 Cannabis shop in Shasta Lake is close to some of California’s most productive growing areas, yet most of the surrounding counties won’t allow cultivation that could supply her.

“Playing in the grey market is not an option,” Garzot said. “California produces more cannabis than any state in the nation, but going forward, if it’s not from a state-licensed source, I can’t put it on my shelf. If I choose to do so, I run the risk of losing my license.”

In 2016, the state produced an estimated 13.5 million pounds of pot, and 80 per cent was illegally shipped out of state, according to a report prepared for the state by ERA Economics, an environmental and agricultural consulting firm. Of the remaining 20 per cent, only a quarter was sold legally for medicinal purposes.

That robust black market is expected to continue to thrive, particularly as taxes and fees raise the cost of retail pot by as much as 70 per cent.

Matt Brancale, 47, a marijuana user since the 1980s and a connoisseur of the plant’s flowery buds, said he welcomes regulations that will bring a higher-quality product because of required testing. But he fears the price could spike once the government takes its share, and worries that revenue will be misspent.

“I also don’t want to get taxed to the teeth on it,” he said. “Are they going to try to squeeze every last ounce of tax revenue out of it? I assume they will. There’s people that are drooling in Sacramento with the potential resource money.”

Courtesy AP / CBC

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