Canada’s “world-class tem­plate” has set the stage for Eu­ro­pean coun­tries

National Post (Latest Edition) - - BUSINESS OF CANNABIS - Peter Ken­ter

The world was watch­ing as Canada es­tab­lished a unique fed­eral ap­proach to the cul­ti­va­tion and dis­tri­bu­tion of med­i­cal cannabis. That reg­u­la­tory frame­work has al­lowed Cana­dian med­i­cal cannabis pro­duc­ers to de­velop world­class ex­per­tise in large-scale cul­ti­va­tion. It’s no won­der Eu­ro­pean ju­ris­dic­tions are turn­ing to Cana­dian ex­perts as they be­gin to travel the road to­ward le­gal­iza­tion of med­i­cal cannabis.

Mar­i­cann Group Inc. (CSE:MARI)(CSE:MARI.CN) (CNSX:MARI), a cul­ti­va­tor, pro­ces­sor and dis­trib­u­tor of medic­i­nal cannabis with pro­duc­tion fa­cil­i­ties in Lang­ton, Ont., is cur­rently await­ing ap­proval of a pro­duc­tion li­cence in Ger­many un­der that coun­try’s new “Cannabis as Medicine” law.

“Fed­eral roll­out of a Cana­dian med­i­cal cannabis frame­work was the first step, but now we’re also seen as a leader in the recre­ational space,” says Ben Ward, CEO of Mar­i­cann. “Clear guide­lines have al­lowed us the lat­i­tude not only to be­come lead­ers in cul­ti­vat­ing spe­cific strains of cannabis, but also to de­velop the ex­per­tise to ramp up pro­duc­tion of a prod­uct of con­sis­tent qual­ity. We also have ac­cess to cap­i­tal that al­lows com­pa­nies such as ours to grow to scale.”

Ward says that Canada’s “world-class tem­plate” has set the stage for coun­tries such as Ger­many and Switzer­land to de­velop their own med­i­cal cannabis reg­u­la­tions.

“Cana­dian com­pa­nies have also de­vel­oped a model and frame­work for safe cul­ti­va­tion,” says Ward. “The user doesn’t have to worry about some­thing com­ing out of a base­ment or ware­house. They’ve come to ex­pect a prod­uct that could be used with the same con­fi­dence they ex­pe­ri­ence when they open a soft drink.”

Mar­i­cann’s found­ing group lev­er­aged its ex­per­tise in the phar­ma­ceu­ti­cal space to ap­ply qual­ity-con­trol stan­dards that could be main­tained dur­ing cannabis pro­duc­tion scale-up.

“We ex­er­cise the best of phar­ma­ceu­ti­cal qual­ity con­trol from the mo­ment we clone the plants to the mo­ment the prod­uct is de­liv­ered,” Ward says. “We treat it as medicine. Ev­ery­one knows the ex­act con­tents of the prod­uct they’re get­ting. We’ll be ob­serv­ing those same stan­dards for the recre­ational mar­ket.”

How­ever, Ward notes that Mar­i­cann never an­tic­i­pated the rapid shift to le­gal­iz­ing recre­ational cannabis in Canada. Early an­nounce­ments led to a re­tool­ing of the com­pany’s busi­ness plan as re­stric­tions in cap­i­tal mar­kets eased.

The com­pany’s Lang­ton grow­ing fa­cil­ity is cur­rently ex­pand­ing from 44,000 square feet to al­most one mil­lion.

“We be­lieve that there will be a de­mand in the Cana­dian mar­ket for one mil­lion ki­los an­nu­ally once rec and med­i­cal are fully im­ple­mented,” says Ward. “We also be­lieve the Eu­ro­pean mar­ket could rep­re­sent five to six times the Cana­dian mar­ket when med­i­cal opens up. But to serve that mar­ket, we re­al­ized we’d have to build out fa­cil­i­ties over the next 18 months and then al­low an­other six months for plants to ma­ture and be har­vested.”

Mar­i­cann and a Ger­man joint-ven­ture part­ner are poised to sup­ply the Ger­man med­i­cal mar­ket with an in-coun­try fa­cil­ity. The com­pany has so far suc­cess­fully ne­go­ti­ated a gru­el­ing ten­der process in which ap­pli­cants were re­quired to demon­strate three years of ex­pe­ri­ence in pro­duc­ing med­i­cal cannabis with­out any in­frac­tions from the home reg­u­la­tor. The ap­pli­cant’s ex­ist­ing fa­cil­i­ties must also be cer­ti­fied ac­cord­ing to do­mes­tic stan­dards for good man­u­fac­tur­ing prac­tice, a re­stric­tion that largely lim­ited com­pe­ti­tion to se­lect groups from Canada, Is­rael and the Nether­lands.

Mar­i­cann has al­ready be­come the first com­pany to es­tab­lish a fa­cil­ity in Ger­many.

“I had per­son­ally op­tioned a fa­cil­ity in Dres­den that had been built for a meat pro­cess­ing and pack­ag­ing oper­a­tion, pre­vi­ously owned by Cargill,” says Ward. “That proved to be proper fore­sight. The fa­cil­ity has 50-cen­time­tre-thick con­crete walls and can eas­ily be up­graded to be fully com­pli­ant with nar­cotics law. It was built 20 years ago to a food-grade pro­duc­tion stan­dard for €80 mil­lion and we picked it up for €3.4 mil­lion.”

Mar­i­cann has al­ready con­verted 46,000 square feet of the 820,000-square-foot fa­cil­ity to cannabis pro­duc­tion stan­dards, for a mod­est €465,000.

The par­ent com­pany has also es­tab­lished two com­pa­nies in Ger­many in ad­di­tion to its joint-ven­ture part­ner­ship. Mar­i­cann GmbH has ap­plied for a nar­cotics li­cence and whole­sale nar­cotics li­cence in Ger­many. These li­censes would al­low Mar­i­cann to im­port its own cannabis prod­ucts from Canada and dis­trib­ute them to phar­ma­ceu­ti­cal dis­trib­u­tors and phar­ma­cies in Ger­many di­rectly. Mar­iPlant GmbH will cul­ti­vate ap­proved in­dus­trial hemp cul­ti­vars and ex­tract CBD to be used in its Mar­iplant prod­uct line.

“Mar­i­cann has a real op­por­tu­nity to be­come a mar­ket leader in the Eu­ro­zone,” says Ward. “We’ve now moved through to ac­quire a com­pany that pro­duces fe­male hemp plants in Switzer­land. We’re look­ing at the unique op­por­tu­ni­ties of­fered by each EU mem­ber coun­try. The EU has 508 mil­lion peo­ple and a great pub­lic health sys­tem. That’s a mar­ket where we should be grow­ing and mov­ing ahead.” For more in­for­ma­tion, visit mar­i­cann.com.

Im­age SUPPLIeD

Aerial view of Lang­ton, Ont., pro­duc­tion fa­cil­i­ties.

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