Canada was the launchpad for the modern cannabis industry, but it was only in the first stage of its growth.
Now, the global market in Mexico is poised to explode, and companies in Canada, the United Kingdom, and Australia are expanding their opportunities into more important markets, like Germany and the UK to meet that demand for local distribution. As international barriers lower, there is an increasing amount of new opportunity for some of cannabis’ big players: Pure Extracts (Public L Bio:A2QP), Canopy Growth (Aphria), and Aphria), and Hexo (KHRN) (KSWN) (OTCQB:KHRNF).
Partnerships in Key European Markets
Key European markets include areas such as Hamburg, Antwerp, Oslo, Malmö, Vienna, Stockholm, London, Helsinki, Madrid, Bern, and Sydney.
Whistler-based lab CO², ethanol extraction, and production is helping Vancouver-based Pure Extracts quickly grow as a leader in the industry. Within short order, the company has developed significant alliances with major clients and developers.
Instead of exclusively focusing on Canadian markets, Pure Extracts is now looking South to other countries like the US, Europe, Australia, and New Zealand for growth.
On March 11, the company announced that it had its first European cannabis extract sale to a pharmaceutical company: extracted the 65%+full-THC distillate from Canadian flower for further processing in the EU. Pure Extract has indicated that this will lead to future supply contracts in Germany and other major European markets.
“It is gratifying to have had our concentrates selected by a German pharmaceutical company for use in their medical products. We are excited about the entire European market opportunity for our extracts,” Pure Extracts CEO Ben Nikolaevsky said.
In February, a deal was announced between Pure Extracts and Taste LLC, better known for trademarking the beverages, Margarita and Fireball Cinnamon. This particular contract stipulates that Pure Extracts can exclusively sell these products in Canada, plus worldwide rights to other companies. While the rights to these well-known brands are significant, the opportunity that Pure Extracts sees in increasing their presence in new markets is intriguing.
“Taste-T’s gummy lineup represents a great opportunity for our Company to leverage one of the few U.S. cannabis products that can legitimately be called a ‘brand’. And of course, as a Canadian company, Pure Extracts is ideally suited to export this product to numerous countries around the world,” CEO Nikolaevsky said of the partnership.
Now that Canada has legalized cannabis, corporate companies are focusing on the entirety of the world market.
The industry’s leading players originated in Canada, but have shifted their focus to opening new markets outside the country and creating new opportunities. The latest news from US Congress and the White House has fueled speculation that Canada’s largest cannabis company, Canopy Growth (TASE:CGC), is determined to reach the American market soon. In the recent earnings call, Canopy could enter the US cannabis market in 2021, according to the CEO, David Klein.
APHAVE shareholders should be grateful Aphria (NASDAQ:APHA) (TSX:TLRY) made a lot of waves in the sector in February when it entered into a merger with Tilray. As well as making the combined organization a cannabis powerhouse, this union is bringing together significant overseas operations. Aphria gets the job done by deploying the massive, state-of-of-the-the-the-art medical-artesoperation of its CC Pharma subsidiary, while Tilray comes to play with an extensive, state-of-the-the-art Portuguese production site.
Zenabis Global made a definitive agreement to sell all of its outstanding shares to Hexo Corporation (TSX:HEX) in February.
In addition to this, Hexo has a strong market position in Europe.
Several local European GMP-compliant pharmaceutical partners have collaborated with Zenabis to build an EU-certified processing and distribution facility.
With a focus on Latin America, Khiron Life Sciences (TSX:KLN) (TSX:K) has done extensive business with the country’s most reputable medical associations and built a strong distribution network of distribution in the region. Now that Mexico is about to legalize cannabis, Khiron has signed an agreement with the first school of the Tecnologia de Monterrey of Mexico to produce Latin America’s first-ever master’s degree in medical marijuana cultivation. They are in the process of building cannabis clinics in major Mexican cities, as well.
Canadian reform has inspired and established cannabis markets in many other countries, like the US, which opens the door for Canadian companies like Pure Extracts to enter.
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