Marijuana Business Magazine - February 2018

of Privateer Holdings, the Seattle private- equity company that owns Tilray. In September,Tilray unveiled plans to spend $24 million (20 million euros) to build a medical marijuana production facility in Portugal to serve the European Union. Kennedy and other Canadian execu- tives and experts shared the following five tips for how to capitalize on the expand- ing overseas market for medical cannabis. 1. Create a checklist to help decide where to expand With so many opportunities abroad, it’s hard to know where to start or where to focus your resources. Executives suggested drawing up a checklist to help define priorities and stay focused. For some companies, it’s more than 200 items long – covering everything from internal political factors and weather to potential distribution networks. “It’s important to think about what you’re going there for. Every country has some merit in some area. It may or may not be worth pursuing,” said Mike Gorenstein, president and CEO of Toronto-based Cronos Group. Cronos was one of the first to export medical cannabis from Canada, and in Septem- ber it disclosed plans to partner with an Israeli collective settlement to grow MMJ in northern Israel. Like Gorenstein, Kennedy consults a lengthy checklist when scouting over- seas opportunities. “We look at climate, proximity to the equator, the cost of inputs like labor, water and power. We look at the ability to get a federal license,” he said. “We look at the trade relationships – meaning the ability to move the product to markets around the world – and the proximity to markets around the world.” 2. Get boots on the ground Executives agreed it’s essential to be physically present in a country where you’re considering doing business. Hav- ing boots on the ground makes it easier to form relationships with local business executives and government officials. It also helps you get the lay of the eco- nomic and political landscape. The most important thing is always the relationship, according to executives. You need to meet face-to-face – not just to iron out contracts and strategies, but to communicate and form a bond. “You have to know your partners. What do they like to do? You find people you become friends with, and those relationships are the most valu- able thing. Contracts mean nothing compared to a strong relationship,” Gorenstein said. “If you build a strong relationship with someone, you’re both incentiv- ized and aligned. I think you’re setting yourself up for success.” 3. Do your homework on certifications, licenses and regulations Knowing the ins and the outs of a country you intend to enter – as well as any market you’re already working in – is critical when it comes to licensing and complying with the local laws and regulations. In Canada, for example, an export permit is required before any medical marijuana can leave the country. But before one is granted, Health Canada requires the target country to sign off on the import permit. In the European Union, all medical cannabis must comply with guidelines spelled out under so-called Good Manufacturing Practices (GMP). So it’s crucial to achieve that standard before Tilray CEO and founder Brendan Kennedy. Mike Gorenstein, president and CEO of Cronos Group. EXECUTIVE SUMMARY The overseas medical marijuana market offers enormous opportunities for MMJ companies. But cracking foreign markets can be tricky and costly. Veteran executives and experts offered these tips: • Create a checklist to help define priorities and stay focused. It can cover everything from internal political factors and weather to potential distribution networks. • It’s essential to have boots on the ground in a country where you’re considering doing business. It can make it easier to form relationships with local business executives and government officials. • Do your homework on certifications, licenses and regulations. Knowing the ins and the outs of a country is critical when it comes to licensing and complying with the local laws and regulations. • Getting advice from international immigration attorneys on visa issues also is important, particularly when it comes to the cannabis industry. • It’s important to know when to say no to an overseas opportunity. 70 • Marijuana Business Magazine • February 2018