Some of the largest cannabis companies have been navigating troubled water recently. Many cannabis giants like Canopy Growth, Aurora, and Tilray have been restructuring their business, with a number of staff laid off and projects put on hold. With the coronavirus outbreak, the world economy slowed down, with consequence for every industry, cannabis included. Despite the trying times and the performance of big companies, the cannabis market still has many opportunities just waiting to be seized. Exactly because of the global pandemic, the GreenTech tradeshow scheduled for June had to be postponed; yet, this didn’t stop the organization from setting up webinars, providing a platform to share knowledge that respected the social distancing measures in effect in different parts of the globe. One of these webinars focused on the medical cannabis industry. Industry experts and insiders were invited to share their thoughts on the current state of the industry, and what lies ahead.
United States and South America
One of the speakers was Bob Hoban, founder of Hoban Law Group, the sole cannabis-only law firm active in the US. “During the first months of the pandemic, March and April, there was a spike of sales,” he said. “Sales kept growing also in the following period, although not as rapidly.” Robert pointed out the irony in cannabis being deemed as an essential business, “this was considered as a gateway drug, initially, and now it is essential”, he observed. This change in the perception of the cannabis industry is a good step towards a broader legitimacy; yet, there are a number of obstacles along the way. “Federal legalization is one of the greatest obstacles to the cannabis market in the US,” Robert remarked. “At the same time, there is the SAFE Banking bill that would open up institutional capital for the cannabis industry, which will surely contribute to further the sector.” From an international perspective, however, the most promising American countries are not the US and Canada, but rather Colombia, Brazil, and Mexico. “The most promising thing is the Latin American market,” Robert points out. “Mexico legislation is near finalization, and it will pass by the end of this year. History tells us that cannabis will continue to thrive, and we have seen cannabis economy being put into the recovery plans of countries coming out of the pandemic.”
Canada
Also in Canada, cannabis businesses have been deemed as essential; this has been followed by the possibility to do curbside pickups and home delivery. “We did see quite of a boom in sales,” Laust Dam, COO of Medisun, said. At the same time, also in Canada there are a few aspects that need to be addressed, which in a way has also been the responsibility of licensed producers themselves. “Companies grew very fast,” Laust pointed out. “The black market continued to thrive, and the legal market didn’t grow as fast, also because of the very slow roll out of stores in Ontario and Quebec. LPs are getting more market shares over the black market, but help from the government is still needed. Companies have had financial problems, some went bankrupt or sought credit protection. For LPs it's challenging competing with the black market, as we have a lot of cost to live up to the regulations; that’s why there is the need for more support by the government.”
Australia and New Zealand
The deeming of cannabis as essential seemed to be more of a global trend rather than something local. Emily Rigby with Cannatrek Medical, an Australian cannabis company, said that cannabis has been deemed as essential in Australia as well, and operations have kept going as usual, “busier than usual,” she said. “The pandemic has put emphasis on the domestic supply chain. There are still a few barriers to expanding the industry, but once those are removed, we have a good advantage: New Zealand and Australia are great brands in the world, and are recognized for the high quality of our agricultural products. In Australia specifically, we have also seen an increase in patient numbers and doctors being confident in prescribing medical cannabis. We are expecting the patient access to increase as well; one of the most interesting things right now is the referendum proposed in New Zealand that looks at the recreational market. When you see results from that, you can expect it to have a huge impact in Australia as well.”
Europe
Europe has been mostly regarded as one of the most promising cannabis markets, for the number of consumers and the strictly medical status of cannabis in the old continent. “In the EU, cannabis is a proper medical product, so it cannot be taken away from patients, thus we were deemed as essential as well,” Tjalling Erkelens with Bedrocan said. “Business in the EU has been going as usual, but on the COVID side, it is very hard as of now to estimate what is going to happen in the market. All the business here goes through the pharmacies and state agencies, so I don’t expect a lot of ups and downs in the EU.”
Even though Europe has very good potential, this hasn’t been really coming online as fast. “Medical cannabis programs are coming online, but not very fast,” he remarked. “For instance, in UK, medical cannabis was legalized in 2018, and today it is still a struggle for patients to access these medications.” At the same time, there are some countries in Europe where there might be more opportunities than in others. “Germany is the biggest opportunity,” Tjalling observed. “The country has an approved regulatory system that quickly came online under the pressure of court cases. On top of that, Germany implemented reimbursement for medical cannabis. At the same time, the regulatory system remains a challenge, as well as throughout Europe. When produced locally, everything needs to go through the office of medical cannabis, which is a mandatory state monopoly agency: this is how it works in the Netherlands and in Germany. Companies produce their medical cannabis and sell it to the office of medical cannabis which is responsible for distributing the products to patients and pharmacies.”
Source: greentech.nl