As the demand for cannabis legalization increases worldwide, Canada has the potential to become the world leader in cannabis exports. As the first G7 country to legalize the consumption and procurement of recreational cannabis, Canada has the advantage to build relationships overseas.
Canadian licensed producers with proper certifications and permits can export cannabis for medical and clinical research purposes, leading some larger producers to turn to the medical cannabis market, as recreational sales forecasting has not reached the goals anticipated for the industry.
In Canada, the recreational sector has an oversupply of cannabis. Companies are carrying it on their books and inventory, selling it at bottom low prices or destroying it. It is estimated that 425,325 kgs of unpackaged cannabis was destroyed by LPs in 2021. As for the product that is packaged, the amount sitting in corporate inventories far exceeds the amount sold. Proposed solutions for oversupply issues are to funnel funds from the cannabis excise tax back into the industry to help producers export their products rather than destroy them.
Canadian LPs can export cannabis for medical and clinical research purposes.
Tilray, based in Nanaimo, Canada, is a global pioneer in the research, cultivation, production, and distribution of cannabis and cannabinoids, currently serving tens of thousands of patients and consumers in 17 countries spanning five continents. They recently reported being the first cannabis company to be approved to ship medical cannabis into Spain. Through continued work with regulators around the world, Tilray is grateful to partner and establish themselves as pharmaceutical leaders through Worldpharma Biotech on the distribution of Tilray medical cannabis.
Cronos Group, headquartered in Toronto, Canada, cultivates and sells medicinal and recreational cannabis through its medicinal brand, Peace Naturals, and its two recreational brands, Cove and Spinach. Although it primarily operates in Canada, Cronos exports medical cannabis to Poland and Germany.
Aphria, now operating as Tilray has received its first two essential European quality standard certifications, which the Canadian medical cannabis producer says will allow it to export finished dried flower and oil in bulk to European Union countries with established medical marijuana regimes. The company earned a certificate of EU-Good Manufacturing Practice compliance for its facility located in Leamington, Ontario.
MedReleaf’s Aurora Cannabis reported significant quarterly and annual losses, but the Alberta-based marijuana producer said it’s on track to report a profit next year on the back of strong growth in the European medical market.
Aurora Cannabis also finalized the largest acquisition in cannabis industry history, establishing themselves as global medical cannabis leaders through the purchase of CanniMed Therapeutics Inc., that had recently created a lucrative agreement in Australia. CanniMed shipped commercial cannabis oil to Australia through the sale and delivery of 3,600 ml of CanniMed Oils to Health House International. Upon completion of the first shipment, the company received three additional import permits from Health House, issued by the Australian Department of Health.
Meanwhile, Canopy Growth is ceasing any more cannabis cultivation in Africa, Canada, Colombia and the United States in a bid to improve efficiencies in its global operations.
The downsizing does not affect Europe, with a partnership agreement in Spain with pharma company Alcaliber S.A., with a subsidiary in Germany that imports medical cannabis, Spectrum Therapeutics GmbH, and has a partnership with Spectrum Cannabis Denmark, a medical cannabis grower.
In short, Canadian LPs could stand to take advantage of international demand for cannabis legalization, readjusting their focus to the medical sector. Considering recreational sales forecasting continues to fall short, LPs could profit from a pivot from the recreational cannabis market, leveraging relationships overseas. This in turn could eradicate the losses caused by oversupply and funnel funds back into the industry fostering Canada to be a world leader in cannabis exports.