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Exclusive Interview With Nick Kovacevich, CEO Of KushCo Holdings

Written by ICBC Staff on . Posted in Business.

By Alex Rogers, Founder of the International Cannabis Business Conference

In the cannabis industry, you will be hard-pressed to find a company that is as experienced and respected as KushCo Holdings, Inc. 

KushCo (OTCQX: KSHB) is a publicly-traded company that serves as the parent company to a diverse group of business units that are transformative leaders in the cannabis space. KushCo brands include:

  • Kush Supply Co., the nation’s largest distributor of vaporizer products, packaging, supplies, and accessories
  • Kush Energy, which provides ultra-pure hydrocarbon gases and solvents to the cannabis industry
  • The Hybrid Creative, a premier creative design agency for cannabis brands 
  • Koleto Innovations, the research and development arm of KushCo that aims to drive intellectual property development and acquisitions in the cannabis space

The parent company was originally founded in 2010, and has now sold more than 1 billion units and regularly services more than 6,000 legally operating cannabis dispensaries, cultivators, and producers across North America, South America, and Europe. 

I recently linked up with Nick Kovacevich, CEO of KushCo Holdings, to discuss his company and some of the major issues and trends from the cannabis space:

 

AR: Your company is almost a decade old. What has been the highlight for the company during that time?

NK: The biggest highlight for us has been being a part of the growth and transformation of the industry in such a short period of time. In the four years that we have been a public company, we have more than doubled our revenue every single fiscal year, generating $149 million in fiscal 2019. We’re talking about an industry that is “emerging from the shadows” and to be able to be a part of it from the very early days is truly an impressive accomplishment. Today, KushCo is one of the largest companies in the industry in terms of quarterly revenue and is proud to boast a deep network of more than 6,000 customers who constantly rely on us to power their brands, their products, and their supply chains.

 

AR: Cannabis policy and industry regulations have evolved a lot since your company started. What change/evolution has been the biggest surprise in your opinion, and why?

NK: Perhaps the biggest surprise has been how slowly many of the states have been rolling out their legal adult rec use programs. There simply are not enough licenses to service the significant demand in most states, nor is there the proper enforcement to crack down on the black market. That being said, we have to keep in mind that no industry has really taken off without its share of challenges. So, these issues are not so much of a surprise as they are challenges that we have to work through to grow and thrive as an industry.    

 

AR: What is the biggest hurdle/issue facing the cannabis space today?

NK: The biggest hurdle today is the lack of access to capital for many industry participants, as well as a resilient and established black market that makes it challenging for the industry to thrive. We do believe these issues will correct themselves over time, but it’s certainly not happening at the accelerated timelines that a lot of people initially thought it would. 

 

AR: Why is proper cannabis packaging important for the regulated cannabis space?

NK: Packaging in the cannabis industry can mean the difference between the success or failure of a brand. Not only do brands have to be extremely cognizant of making sure their packaging is compliant with each of the different state and federal regulations, but they also have to balance this compliance mindset with an eye toward creativity and adopting packaging that is unique, proprietary, and able to attract consumers. Having been in this industry for nearly 10 years, we’ve seen nearly every form of state and provincial regulation as it relates to packaging, and have been working with our customers to help them navigate this constantly evolving regulatory landscape. Our innovation arm Koleto has developed a reputation as a trusted provider of hyper custom packaging that many of our customers, especially the larger ones, are migrating toward to differentiate their brands.

 

AR: What common issues do entrepreneurs/companies experience when it comes to cannabis packaging, and how can they mitigate those issues?

NK: Some of the issues cannabis entrepreneurs and companies experience when it comes to packaging is underestimating the difficulties of managing their supply chain and being more than just a packaging provider. We recognized early on that providing child-resistant packaging was just not going to be enough for our customers, which is why through organic and inorganic initiatives, we have significantly expanded the business to include a wide variety of complementary products and services, including vape hardware, energy and natural products, papers & supplies, retail services, anti-counterfeiting and authentication labels, and hemp trading. 

 

AR: How do you see the cannabis space changing over the course of the next 5 years?

NK: It’s hard to say where the industry will be in the next five years, given how quickly and unpredictably the industry is evolving, but we expect to see some sort of broader legalization and/or de-scheduling to occur, including the potential for federal legalization or the passage of something like the STATES Act, which will significantly expand the adult rec use market. We also expect for there to be more consolidation as companies look to scale and drive efficiencies in their business, while working to get to or expand profitability. In addition, we expect capital sources to gradually open up, and we expect the industry to look more and more like a CPG industry, with the successful brands being the ones that are most recognizable, have the strongest value propositions and customer appeal, and have the deep balance sheet and access to capital to scale.

 

AR: What tips/advice would you give an aspiring cannabis entrepreneur?

NK: Be resilient, fearless, and willing to take initiative and adapt. This is a dynamic industry that requires thinking on your feet and constantly coming up with creative solutions to difficult problems. We started out with a simple child-resistant pop top bottle but have prioritized a deep commitment to our customers to evolve with the industry and build the sector’s most valuable ecosystem of products, services, and clients. 

 

AR: What exciting things does KushCo Holdings have planned in the near future?

NK: What excites us most is that we’re constantly innovating and working to drive value for our customers, partners, and shareholders. Our core business continues to grow nicely and is positioned to expand further with new products and new markets coming online. Supplementing that is the launch of some of our newer initiatives to expand our ecosystem, strengthen our competitive moat, and drive higher margins. These initiatives include the recent launch of our Retail Services business and our hemp trading business, which along with our packaging, energy and natural products, complete our CBD ecosystem from “seed to sale.” Further, we have an elevated focus on getting to adjusted EBITDA profitability and being in a position to control our own destiny. We believe that with the growth in our current business, expansion of newer and higher-margin services, as well as our operational restructuring and cost-cutting initiatives, that we have a clear pathway to achieve this objective.

***

Alex Rogers is the Owner and CEO at International Conferences Group LLC, the parent company of the International Cannabis Business Conference series. International Cannabis Business Conference events are the premier cannabis events for entrepreneurs across the planet. With events in Canada, the United States, Switzerland, Spain, and Germany the International Cannabis Business Conference is where the world meets cannabis. Find out more at InternationalCBC.com and on LinkedIn, Twitter, Facebook, YouTube, and Instagram.

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David Branfman’s Report From The International Cannabis Business Conference In Vancouver

Written by ICBC Staff on . Posted in Vancouver.

By David Branfman, Branfman Mayfield Bustarde Reichenthal LLP

We have just returned from the International Cannabis Business Conference® in Vancouver, B.C., Canada – an action-packed one day conference with networking events at the front and back ends. All in all, the combination of a tight one-day conference with networking opportunities at the front and back ends made this event a very pleasant and worthwhile alternative to the now too common mega-cannabis conferences. The following are some of the highlights from the panel discussions we think you will find interesting and useful. (If your time is really short – and although we found it all very useful – we have highlighted in yellow some of the really interesting parts of the discussions).

Intellectual Property Is at the Forefront:

Several of the panelists mentioned how important intellectual property (“IP”) such as trademarks/copyrights/patents/trade secrets is to their businesses in particular and the industry in general. In fact, one of the panelists stated that developing and acquiring cannabis-related IP is one of his company’s top 3 core strategic initiatives in the next few years.

This is a very positive change from the reaction we received 10+ years ago when we first started providing IP services to cannabis entrepreneurs; back then we were looked at like we were visitors from another planet with two heads and six legs. So it’s gratifying to see that we accurately predicted the importance that IP and IP law would become as the legal cannabis economy evolved.

But like just about everything in business, nothing stays the same and it’s always critical to keep adapting and innovating. And so as we come closer to the end of 2019 and the beginning of 2020, now is as good a time as ever to look inward and take stock of your inventory of IP assets (trademarks, Internet domain names, copyrights/content, trade secrets and patents) and make sure you’ve taken appropriate steps to protect and monetize them. Let us know, of course, if you have any questions about how to gather the info you need and what to do with it.

Lori Ajax and the California Bureau of Cannabis Control:

Given that this conference was primarily focused on the Canadian market, it was interesting that Lori Ajax from the California BCC was the leadoff speaker at the conference. Why Lori? Because Canada can learn a lot from what California has done right and wrong these last several years as Canada expands its adult-use cannabis program.

Highlights of Lori Ajax’s interview:

  • Access to legal cannabis: Access still an issue; thus in California a licensed cannabis retailer can deliver anywhere in California. However, some anti-cannabis California cities are suing to prevent this. Others are accepting it. Encinitas – a suburb of San Diego – has revised its laws to allow cannabis delivery with the city even though it doesn’t currently have any licensed storefront retail shops. And….Encinitas has a ballot initiative coming in the November 2020 election to allow for up to four cannabis retail stores and some cultivation and distribution facilities.
  • Number of Licensed Cannabis Businesses in California: So far California has about 6500 licensees across the supply chain; but there are more distributors than retailers.
  • Number of California Local Jurisdictions: Because there are almost 550 cities and counties in California, BCC has a challenging job coordinating the state rules with local rules and regulations.
  • On-site Consumption: Some cities allow on-site consumption at retail shops, but it’s a city-by-city decision that requires approval by the local jurisdiction.
  • Educating the Public: In order to help educate the public about the importance of purchasing cannabis products from licensed retailers, the BBC is getting active on Twitter with #weedwise and has set up a website for consumers to be able to check whether a retailer they intend to buy from is licensed: www.CApotcheck.com. The BCC even created a PSA (Public Service Announcement) about how to obtain a cannabis license with Cheech Marin playing the part of a BCC official: https://youtu.be/jQ0OK06ZTP4
  • Vaping Illnesses: The recent rash of illnesses linked to vaping has been traced to the unlicensed market – not the legal market.
  • Conflicts Between Wine and Cannabis Industries:  A rift is developing between wine and cannabis: some grape growers are upset about “terpene drift” affecting the wine terroir while at the same time some cannabis growers are concerned about the pesticides grape growers can use that they can’t that may be affecting the purity of the plants they grow.
  • Banking: California is still struggling to get banks and credit unions to bank the industry, but banks are still resistant to get in. Last month the BCC collected $3 million in cash for licensing fees - the BCC wants out of the cash business too! Starting a state bank? Lori was not optimistic that’s going to be a solution any time soon: it will take too long to get up and running.
  • Criminal justice reform: San Francisco has retroactively expunged over 9000 criminal defendants’ records; a representative from San Francisco recommended that other jurisdictions call the SF DA’s office for info on how they can do the same thing.

Mergers & Acquisitions:

The panelists included Patrick Brauckman (Pasha Brands, Executive Chairman); Jamie Pearson (Bhang, COO); Paul Pederson (Nextleaf, Co-Founder & CEO); and Bobbi Koz Paley (Art Assets LLC, Founder & CEO). Dean Arbit of Wagner/Dimas and bud.com was the Moderator.

  • Bhang is now publicly traded after going public this past July. It was a painful process. It took a lot of paperwork and lawyers; it required very strategic plan They are looking to acquire companies that are value-add that fill in gaps that Bhang has needs for. They just acquired a beverage co.; it fit holes in their distribution plan.
  • What are investors looking for when thinking about acquiring a cannabis business? For Patrick, it’s all about looking at management and how much control they have over their business and where their outside investors are coming from. Bobbi also looks closely at management as a threshold issue. Bhang will look at both public and private companies; it depends on whether the potential acquisition fills a need that Bhang has. But….a publicly traded company acquiring or investing in another publicly traded co. is very complicated.
  • What sectors are growing the fastest? Paul’s co. is really looking at IP as a way of growing their co. Down the road, they believe more consumers are going to want more non-smokeable product. Dean believes that IP is going to really help differentiate products. Jamie believes consumers often don’t really know what they really want; it’s the cannabis company’s job to look and see what’s possible. For example, beverage companies are trying to figure out how to help consumers drink out with their friends and get high without getting drunk. Skin care and men’s grooming products are also likely to be significant sectors. For Bobbi, osteoporosis and endometriosis are real problems that need solutions.
  • How Far Along is the Industry in 2019-2020? Patrick’s analogy is that the cannabis industry is currently just in the third inning of a nine inning game.

Nic Easley on Vetting Domestic Investments to Ensure Viability:

  • Canadian Cannabis Market – State of:
  1. 2019 Estimated Cannabis Sales (Medical & Recreational): $2.6 billion ($U.S)
  2. 2024 Projected Cannabis Sales (Med & Rec): $3.4 billion ($U.S.)
  3. Cannabis prices are dropping:  In 2018 Aurora Cannabis reported 21% net selling price drop for dried flower and 25% drop for cannabis extracts.
  • Paying for shelf space:  In U.S. paying for shelf space at retailers is becoming much more prevalent.
  • Earlier this year WHO recommended rescheduling cannabis
  • Nic’s prediction: On the federal level, medical legalization will come first in U.S. before recreational.

***

Our Conclusions: It’s no surprise to anyone who has been in the industry that the era of the mom and pop cultivators and MMJ dispensaries is either over or rapidly coming to a close. Likewise it’s probably no surprise that a number of very smart and passionate entrepreneurs – some of whom are industry veterans with years and decades of experience behind them and some of whom are very new to the industry – are working hard to try to make sense out of nonsense in terms of the patchwork of sometimes competing local, state and federal laws and regulations that are making it extremely difficult for the industry to normalize. What is concerning – although also possibly no surprise – is that almost two years after California adopted its adult use regimen there is still no real solution clearly in sight to the big problems of: (1) no reliable/predictable banking solutions; (2) the inability of regulators to put a meaningful dent in the illicit unlicensed cannabis market which makes it even harder for legit licensed cannabis businesses to survive; and (3) the onerous patchwork of rules and regulations that are still making it hard for legit cannabis business to survive – much less thrive. But at the end of the day there is also no doubt that consumer demand for legit and clean cannabis and hemp/CBD products is thriving and probably on the rise. We are therefore cautiously optimistic that the consumer demand will encourage the serious cannabis entrepreneurs and businesses to push, pull and prod all the necessary levers and buttons to solve the big three issues. We are also pleased to see how many industry insiders are finally starting to talk about and acknowledge the role that IP is playing and will continue to play in helping to determine which of the thousands (or tens of thousands) cannabis and hemp/CBD companies are going to survive the current market flux and disruptions. Thus as we come closer to the end of 2019 and the beginning of 2020, now is as good a time as ever to look inward and take stock of your inventory of IP assets (trademarks, Internet domain names, copyrights/content, trade secrets and patents) and make sure you’ve taken appropriate steps to protect and monetize them. Let us know, of course, if you have any questions about how to gather the info you need and what to do with it.

***

About David Branfman: David Branfman has been practicing law in San Diego County for over thirty years. Mr. Branfman’s practice focuses on intellectual property and entertainment law, including trademarks, domain names, copyrights, trade secrets, licensing, motion pictures & TV, and music. Find out more at: Branfman Mayfield Bustarde Reichenthal LLP

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Ready, Steady, Rec Market Europe?

Written by ICBC Staff on . Posted in Cultural, Politics.

By Marguerite Arnold

There is a decided trend in Europe this year, driven in large part by frustration if not a political necessity. Recreational cannabis trials are starting to place pins in the map. They may not be large, and in some ways easy to sneeze at. However, the recreational bug has landed in the EU. The dominoes are starting to fall here too.

Is this the end of the fight? Certainly not. Plus of course, recreational market start almost inevitably pushes medical issues and the patients who face them, plus the financial hit of buying uncovered medicine, to the backroom once again.

Regardless, steps forward are definitely markers for victory. Below is a handy guide for recreational trials springing up like mushrooms in a European market near you.

Switzerland

The Swiss put the issue on the map in a big way when they announced that they are creating recreational trials based out of pharmacies basically. Depending on where you are, you will be able to buy recreational products from Swiss apothekes in near future if not already. Plus of course, your medicine.

Luxembourg

Like the Swiss in their approach to the issue but within the actual EU, Luxembourg has been a strategic chess piece in the European puzzle ever since last year. Right as the German Deutsche Börse was about to pull the plug on German investing in the public markets, Luxembourg stepped in and saved the day by changing its own medical law to allow equity markets to clear stock purchases three weeks after the German ban, thus putting the entire issue back in play. The country’s new Green government has put full country recreational on the legislative map within the next five years and are moving to implement the law within two.

Denmark

Long the home of a hippie commune and fairly open cannabis market that is world-famous (although recently wracked by violence and black market disruption), the Danish are taking to cannabis pretty much like, well, bacon. With a countrywide medical trial (that allows producers to ship into the German market), the first Danish city has just announced a rec trial. Berlin is almost certainly “green” with envy at this point. Next stop Kreuzburg anyone? It is unlikely but clearly a priority for German activists, for starters.

Holland

However easy it is to laugh off news of any recreational trial in the home of the coffee shop, yes indeed, Holland is now stepping up to the plate with a “recreational” trial of its own. Basically this will be a further institutionalization of the legalizing market here over the last five years. However, it is also clear that the Dutch do not want to be considered a backwater on this now the subject is finally moving. If not globally hip.

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How Closely Does European Market Reform Track Other Countries?

Written by ICBC Staff on . Posted in Business.

By Marguerite Arnold

If 2014 was the year that the recreational cannabis market finally got going in the U.S. and later in Canada, 2019 may well be remembered as the same kind of year on the other side of the Atlantic. Despite the well-connected winks and assertions by many of the top cannabis companies in the world that the ball will finally shift circa 2020 or 2021, the first whiff of real change is afoot this year across the European continent.

But what does European reform most broadly resemble? Earlier in the year, big Canadian execs were frequently in the media expounding that Europe will be “just like” Canada. However, that is clearly not the case. In fact, what appears to be shaping up is that the European market will, in general, be much more like the American market path to reform.

However, even that is also not the whole story. Like the Canadian market, each European “state” domino that now flips into the recreational column will also carry national regulatory punch. If not compliance.

Europe is in effect, set to be a distinct hybrid all of its own.

Why?

Beyond EU regulations, each member state will be setting up its own national (not state) system. This has far more impact on local citizens, as well as policy and regulation setting.

Why Is Europe More Like The US Market?

The states’ rights movement aside, most Americans are impacted by their state rules and regs than federal ones. This is true from civil and consumer rights to market regulations. In Europe, while this is also true within countries themselves, the movement of the issue on a “federal” state-level means that the reforms are being baked in at a higher level earlier.

However, it also means that federal reform is also often far removed from those it affects the most. In Germany for example, patients lost the right to grow their own even as insurance companies were then put on the front line of payment. So far, that has resulted in a large medical market where dronabinol is usually the first drug on offer.

This is very much like the United States where dronabinol was first introduced to the medical community during the AIDS crisis. The failings of the drug are well known, no matter how cheap it is.

Unlike in the US, there is at least more possibility of obtaining insurance coverage for the drug. And unlike the US, certainly at this point, patients who do not like or cannot tolerate dronabinol are faced with few options outside of the black market (still).

Why Does Europe Look Like Canada?

To the extent at this point that both American and Canadian companies are in the money, with well-connected lobbyists at the European level, yes, European reform looks a bit like the Canadian model. What is missing, however, is any country declaring that individuals have a constitutional right to access the drug. Canada also does not have any insurance mandate to cover the drug.

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Luxembourg – The New Home Of Recreational Cannabis Crypto Models?

Written by ICBC Staff on . Posted in Business.

By Marguerite Arnold

Not only did Luxembourg just make some cannabis news lately by setting a two-year timeframe to legalize cannabis for adult-use, but another kind of reform also seems to be on the horizon. The small country of just under half a million people also seems to be looking at cryptocurrency models right now.

In fact, as of October, Price WaterHouse Coopers will begin to accept Bitcoins as payment. Could the Luxembourg market, in fact, become the new center of all things cannabis and crypto in Europe?

The answer – anything is possible.

However, given the more advanced state of regulatory structure around both developing industries, it is likely that if and when crypto and tokenization models are tested in Luxembourg, whether or not they are paired with cannabis in some way, the spectacular flameouts seen in the American crypto cannabis markets several years ago is less likely albeit still possible.

The excitement about recreational cannabis reform in Europe, of any kind, may do silly things to crypto associated with any cannabiz associated with the same.

While the tokenization of cannabis certainly represents one way to deal with many supply chain problems, it is not an automatic fix. The engineering of the blockchain, the specific processing involved, and how it solves not one, but multiple pressing problems are all issues that impact how usable platforms are, what is actually tokenized, what information that token contains, as well as its potential functionality within the ecosystem.

Nevertheless, the proximity of the two reforms leaves the door open for ingenuity, if not creativity to start cooking in Luxembourg’s nascent crypto canna kitchen.

***

About the International Cannabis Business Conference

International Cannabis Business Conference events are the premier cannabis events for entrepreneurs across the globe. With events in Canada, the United States, Switzerland, Spain, and Germany the International Cannabis Business Conference is where the world meets cannabis. Find out more at InternationalCBC.com and on Twitter, Facebook, and Instagram.

How Clean Is The Cannabis Industry?

Written by ICBC Staff on . Posted in Business.

By Marguerite Arnold

As the CannTrust scandal continues to reverberate around Europe, a question is clearly in the room this fall – is this problem just isolated in one country in Europe (Denmark) or is it more widespread?

Specifically, in a mostly import driven business, has Germany, the largest medical cannabis market in the world right now, dodged this bullet?

The answer? Probably not.

The question right is, of course, why not?

GMP Is Still Bein Implemented In The Industry

The production standard for the cannabis industry that is evolving out of the medically focused industry in Europe is called ‘GMP.’ It is a pharmaceutical standard, used far beyond cannabis, that is supposed to set best practices for the cleanliness of the pharmaceutical industry. GMP is the highest and most expensive standard. It requires that production centers are hygienically and biologically “clean.” But it does not stop there.

One of the most common misperceptions on the production end is that the production environment of crops does not have to be EU GMP compliant at the time of growth. Many producers, for example in Canada, still believe that using domestic pesticide-free “green” production is good enough to meet EU-GMP if it is taken to a processing plant.

That is a very expensive mistake to make, and in many cases requires retooling to fix. But even beyond the production and processing of the product, the entire supply chain must be up to snuff, including product packaging and employee backgrounds.

In part what also seems to be happening across Europe is that GMP cert was required by July – namely the date of full implementation of the large pharma trade deal between the US and Europe. However, some companies clearly did not meet the July deadline.

There are also other factors. Widespread misadvice about compliance measures required in both Europe and Germany is widespread.

This issue is not just limited to the medical industry. Novel Food, which so far is only hitting the CBD market, is also a licensing discussion in the room and has so far likely committed violations not only on the product side but also on the labeling front as well.

Who Rings The Alarm Bells?

The CannTrust debacle proves one thing clearly, that the best regulatory structure in the world does not work if the industry itself (including employees) does not comply. In a world where the product itself is still rare and hard to find, this creates disincentives for distributors to report producers.

This is especially true in foreign markets, and even more so in a country like Germany. The regulatory framework is not only present and high in foreign markets, but interaction and communication between federal and state agencies are also difficult to penetrate, particularly for foreigners which are still the majority of those who work in the vertical.

In other words, who sounds the alarm is a fragmented answer, and often impacted by business decisions far beyond consumer safety.

About the International Cannabis Business Conference

International Cannabis Business Conference events are the premier cannabis events for entrepreneurs across the globe. With events in Canada, the United States, Switzerland, Spain, and Germany the International Cannabis Business Conference is where the world meets cannabis. Find out more at InternationalCBC.com and on Twitter, Facebook, and Instagram.

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The Cannabis Market In Europe – A Trade Game That Disadvantages Patients?

Written by ICBC Staff on . Posted in Medical.

By Marguerite Arnold

About a month before international cannabis company Tilray announced that it was shipping from Portugal to Germany, Sativex (manufactured by the British-based GW Pharma) was approved for use by the Portuguese government. This means that the actual cost of the drug, deemed too expensive by the NHS in the UK, will be partially underwritten by the Portuguese government.

Portuguese patients with MS will now face expenses of about $350 per spray bottle. To put this into real patient (if not grey market) terms, that’s about the cost of an ounce in the U.S. and about half the cost of the same amount in the unregulated market across Europe.

Most patients use more than 1-2 spray bottles of Sativex per month.

With Tilray now exporting to Germany, this poses an interesting question. Why was the Portuguese government subsidizing a British company to import cannabinoid-based drugs right before a Canadian company with domestic production announces that its latest crop is slated for export? Especially as Tilray’s campus is capable of producing products at a high enough standard to be accepted by the German government?

Why didn’t the Portuguese government just buy the product locally?

Part of the answer lies in what was just approved. The Portuguese government, for all of its supposed freewheeling drug policy, is unwilling to admit that medical cannabis works on MS or any other condition, in any other form than a pharmaceutical spray. And furthermore, that non-pharmaceutical spray also works for MS patients, sometimes better than their own branded entry.

Tilray’s product, in other words, grown in Portugal, is not on the docket to be reimbursed by the government on the consumption side. So the company looked for a market where it would be. This is no different than what has happened in Holland since early 2017.

Part of this conundrum is also caused by the fact that cannabis companies are desperately trying to find justification for pharmacizing their products. This is inevitable in a world where “strains,” the great hope of breeders if not the larger companies everywhere, are bound for obscurity, especially in Europe.

While this creates a better justification on corporate bottom lines, what it is also doing is driving local production out or setting a bar too high for most to participate, just as there is a local population to supply. It is also increasing the overall costs of cannabinoid medical access to European governments – both in the home and exporting countries.

Companies Are Seeking Higher Market Returns

Because of this, patients are still faced with the unappetizing process of applying for the drug through a regional health service and finding that it is still usually cheaper and more accessible to skip the pain and go back to the unregulated market.

In turn, this also has a political effect. With legislatures across the continent wrestling with greater medical access and cost issues as well as the option of just ditching the entire debate and pushing patients into a recreational space (see Holland), the concept of cannabis as a reimbursable drug becomes laden with an additional layer of socioeconomic angst attached to all discussions over healthcare in the room right now.

The bottom line? 2019 might well be the year in which the tide turns and European governments, recognizing that cannabinoids are not going away, will push for more domestic production and sovereign ownership. Especially now, with the recreational discussion on the table thanks to Luxembourg.

What that means for medical reimbursement, however, if not cost control beyond that is still unclear, and that will likely be the case for several years to come.

***

About the International Cannabis Business Conference

International Cannabis Business Conference events are the premier cannabis events for entrepreneurs across the globe. With events in Canada, the United States, Switzerland, Spain, and Germany the International Cannabis Business Conference is where the world meets cannabis. Find out more at InternationalCBC.com and on Twitter, Facebook, and Instagram.

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Tilray’s Portuguese Facility Ships To Germany

Written by ICBC Staff on . Posted in Business.

By Marguerite Arnold

In one of the more intriguing cross-European canna developments this summer, Tilray announced its first cross-European shipment. The shipment was estimated to be worth more than $3 million and shipped from Portugal to Germany in late August. The German distributor that Tilray is working with is also of note – Cannamedical, the second indie distributor to get an import license (after MedCann GmbH now Spektrum/Canopy).

The announcement comes at an interesting time.

Tilray’s Portuguese plans were announced during the summer of 2017 when the focus on entering the German market was via the cultivation bid process. Tilray was the first company to more or less publically throw in the towel, in other words, as the first news of lawsuits began to trickle out.

The Impact of Warmer Climates And Less Regulation

Tilray is not the first, much less the only, large Canadian cannabis company to essentially plan to outsource EU production somewhere in the region. All of the largest players in the market have established either production sites or partnered with domestic producers to do so in countries around the continent. Spain, Poland, the Czech Republic, Croatia, Greece, Italy, and Macedonia are all in various stages of cultivation, production, and/or extraction.

However, the Portugal play is intriguing on a number of fronts, starting with sovereign drug policy. That is unlikely to be duplicated anywhere else in Europe. However, it places the company in a strategic position to ship product not only to the EU (starting with Germany) but also the UK.

The demands of these two markets will absolutely drive the economics of the industry for the next decade, regardless of niche plays that may be perceived to be sexier, such as Luxembourg, Switzerland, and Greece.

That means no matter how “unregulated” the overall local attitudes are when it comes to cultivation, processing, and production, export markets are highly regulated. Cost control, starting with labor, but also other matters from packaging and labeling to supply chain issues beyond this, are in the room and are unlikely to leave it.

The most recent contretemps over CannTrust in Denmark, including calls for better regulations, also seem to indicate that the writing is on the wall in terms of where the industry is headed.

Ultimately, of course, beyond issues of production cost, there are also bigger problems afoot, starting with the slow acceptance of medical efficacy which will ultimately drive sales. The only solution for that is medical trials, regardless of how exciting the news of recreational reform is in Luxembourg.

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About the International Cannabis Business Conference

International Cannabis Business Conference events are the premier cannabis events for entrepreneurs across the globe. With events in Canada, the United States, Switzerland, Spain, and Germany the International Cannabis Business Conference is where the world meets cannabis. Find out more at InternationalCBC.com and on Twitter, Facebook, and Instagram.

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The International Cannabis Business Conference Is Coming Back To Vancouver, B.C. September 15-16

Written by ICBC Staff on . Posted in Vancouver.

The International Cannabis Business Conference is bringing its unparalleled combination of cannabis industry, policy, advocacy, and networking back to beautiful Vancouver, British Columbia later this month.

A VIP reception on September 15th, hosted by NextLeaf, will kick off the networking at the International Cannabis Business Conference in Vancouver, as speakers, sponsors, and attendees gather at the Westin Bayshore Hotel. This will be a stellar opportunity for attendees to make connections with cannabis entrepreneurs and policymakers from all over the globe.

Lori Ajax, the first and only Chief of the California Bureau of Cannabis Control, will provide a keynote interview on September 16th. Lori Ajax literally has the biggest cannabis regulatory job on the planet. This is the first time that Chief Ajax will be speaking about cannabis regulations at a conference outside of the U.S. and it is sure to be very informative.

“I’m excited to be able to participate in the upcoming International Cannabis Business Conference. It’s been great to be a part of the California event for the past few years, and I’m really looking forward to learning more about Canada’s legal cannabis market and see if there are lessons to be learned for California’s cannabis industry.” Ajax said.

Ajax will be joined by 4-time NBA Champion John Salley who will also be speaking at the event. In order to be successful in the increasingly-crowded cannabis space entrepreneurs have to be creative, flexible, adaptable, and versatile. John Salley possesses all of those attributes and has been successfully putting them to work for decades, which is why the International Cannabis Business Conference is honored to have him as a guest speaker.

Additional conference topics will include:

  • Canadian cannabis regulations and policy
  • Regulatory models for edibles, topicals, and extracts
  • Mergers and acquisitions
  • Vetting investments with an eye on emerging international markets
  • Craft cannabis
  • Cannabis exports
  • Extraction science and technology
  • Strategic partnerships

Following the conference curriculum, the exclusive after-party, sponsored by Bhang and Indiva, will take place on a Pacific Yachts 105-foot, three-level luxury vessel. The yacht party will be DJ’d by the legend himself – DJ Muggs from Cypress Hill! Join us this September 15-16 for an industry event like no other.

Tickets can be purchased at: https://internationalcbc.com/buy-tickets

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About the International Cannabis Business Conference

International Cannabis Business Conference events are the premier cannabis events for entrepreneurs across the globe. With events in Canada, the United States, Switzerland, Spain, and Germany the International Cannabis Business Conference is where the world meets cannabis. Find out more at InternationalCBC.com and on Twitter, Facebook, and Instagram.