Canada’s “world-class template” has set the stage for European countries
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.
Aerial view of Langton, Ont., production facilities.