Marijuana Business Magazine - May-June 2018

EXECUTIVE SUMMARY The international cannabis market is taking off, and North American companies with global aspirations should act now. But deciding where and in what sectors to seek opportunities isn’t easy. Here’s an overview of the international cannabis landscape: • Cannabis markets in Canada and Jamaica seem to offer the most and best opportunities, while markets in Europe, South America and Australia are still very restricted but developing quickly. • Generally, the ancillary and manufac- turing sectors offer the most poten- tial business opportunities overseas, followed by cultivation. • Most countries currently don’t offer retail opportunities, but there are exceptions. • Before expanding, you need to know the legal and regulatory landscape in your targeted country; in some places, the regulations may not even be finalized. • Legal obstacles to global trade aren’t nearly as formidable for hemp as they are for marijuana, giving U.S. hemp companies an avenue to expand overseas. • New markets may be slow to launch, so companies must be prepared to wait before they can do business. Unlike the United States, these over- seas markets have federal governments that consider cannabis – particularly medical cannabis – a legal plant.The ancillary and manufacturing sectors offer the best opportunities, while cultivation is more limited and retail is extremely limited. The math, meanwhile, explains why more and more cannabis companies are turning a watchful eye overseas. Worldwide spending on legal can- nabis is forecast to reach $57 billion by 2027, led by growth in North America and Europe, according to a new report by Arcview Market Research and BDS Analytics. A study by Bryan, Garnier & Co., a European investment bank, is even more bullish, predicting a global market of $140 billion by 2027. “The opportunities are tremendous: 640 million people in Latin America, more than 500 million in the [European Union],” said Guillermo Delmonte, president of the international division of Organigram, a licensed cultivator based in New Brunswick. “Many countries are still import- ing, but that’s because they don’t have companies that are operational to meet demand. But things are moving: There are companies getting set up to do domestic production when it’s allowed.” Pick Your Path For U.S. cannabis companies, the most common route to international conquest has been through Canada. A few notable examples include: • Privateer Holdings, a private equity firm, obtained a Canadian cul- tivation license to launch Tilray. Privateer has transformed British Columbia-based grower into a vehicle for international expansion, selling the company’s products in several countries on five continents. Tilray also is building a medical marijuana production facility in Portugal to serve EU demand. • MedMen, a management and investment firm that operates dispensaries and production facili- ties in California, New York and Nevada, inked a joint venture with Ontario-based Cronos Group, which exports medical cannabis products to Germany, Israel and Australia.The joint venture, called MedMen Canada, will develop branded products and open stores Trent Woloveck is president of The Green Solution. Photo courtesy of The Green Solution Guillermo Delmonte is president of the international division of Organigram. Photo courtesy of Organigram across Canada, representing Cali- fornia-based MedMen’s first foray into the international market. • The Green Solution, a Colorado company that grows cannabis and manufactures infused products under the Nectar Bee brand, part- nered with Organigram, knowing that the partnership would give it access not only to Canadian markets, but other foreign markets that Organigram – because it’s a Canadian company – can pursue. “When we signed with Organigram, we knew that would give us an interna- tional opening,” said Trent Woloveck, president of The Green Solution. GOING GL BAL 52 • Marijuana Business Magazine • May-June 2018