Australian cannabis firms are eyeing the lucrative EU market…
Aussie firm, the Perth-based MCG Pharma, announced in early October that it had just penetrated a lucrative and growing canna market in Central and Eastern Europe. The firm announced that it had inked a major supply and distribution deal with Lennis, a regional medical supplies distributor. This opens the door to canna-derived medicine now reaching 15 countries in the region, including Slovenia, Croatia and Bosnia. Revenue will be split according to product, sales and volume. This deal includes not only processed medicine, but unprocessed flower.
Europe Is Accepting Medical Cannabis
While there are some holdouts across the continent, notably France and England, the rest of Europe is getting hip to medical cannabis in some form. This includes of course Germany, but other countries are now moving cautiously into this territory – even if they do not produce cannabis domestically.
What is interesting about the new distribution deals being announced for this part of the world is that they are coming at a time when major EU-based production facilities are also in the early stages of being built out. It is not known when Germany will announce the finalization of winners for its first cultivation licenses. However this is supposed to go online by 2019. In the meantime, Tilray is building its own production plant in Portugal. Turkey, which has so far not indicated any interest in export of legal cannabis, has also started its own production facilities – in large part to stem the black market and narco terrorism. It is unknown if they will export to the rest of Europe. In the meantime, firms from Canada, the Netherlands, Israel as well as Latin America are also looking here for opportunities in the meantime.
In other words, by 2019, there will be at least four countries and probably five producing medical grade, commoditized medical cannabis in Europe. What is the future of all these imports?
A Normalizing Market
While the cannabis market here is clearly opening up to cannameds from other countries, it is unlikely that any country which legalizes cannabis-based medicines and normalizes them under existing healthcare and national insurance is likely to rely for long on imports. Why? They are far more expensive than domestically grown crops.
However, establishing domestic grow operations, as Germany is learning, is a lengthy process. And in the meantime, patients and increasingly doctors are demanding access to the drug. It is also increasingly clear that the best way to shut down the black market is to provide a legitimate source of medication. And further do so in a way that they can afford it.
As a result, the import market for cannaproducts into the EU will be strong. What this recent news also does is establish very clearly that a new player has entered the EU cannabis market – and further one without Canadian roots.
[Image credit- Pixabay]