As the first legal national market, Canada was the start of the modern cannabis industry, but the Canadian market was only just the beginning. Now, Mexico is set to instantly surpass Canada as the world’s largest international market, and established cannabis companies are increasingly looking beyond the Canadian market to opportunities in major markets like Germany, the UK, and Australia to supply local markets and pharmaceutical companies with Canadian cannabis. As legal barriers come down, the cannabis industry is becoming an increasingly international business, creating use expansion opportunities for established cannabis companies like Pure Extracts (CSE:PULL) (OTCPK:PRXTF) (XFRA: A2QJAJ), Canopy Growth Corp (NASDAQ:CGC) (TSX:WEED), Aphria Inc. (NASDAQ:APHA) (TSX:APHA), Hexo Corp. (NYSE:HEXO) (TSX:HEXO), and Khiron Life Sciences (TSXV:KHRN) (OTCQB:KHRNF).
Pure Extracts Forms Partnerships in Key European Markets
Vancouver-based company Pure Extracts (CSE:PULL) (OTC:PRXTF) (XFRA: A2QJAJ) is quickly becoming a leader in the extraction space, utilizing cutting-edge CO² and ethanol extraction and production out of the Company’s EU-GMP compliant extraction lab located just north of Whistler, British Columbia. The Company has quickly made a name for itself with key partnerships with leading brands and producers. Like other established Canadian companies in the cannabis space, Pure Extracts is now setting its sights outside of Canadian borders.
On March 11, Pure Extracts announced that the Company had entered into the European cannabis space with the sale of its first batch of cannabis oil extracts to a German pharmaceutical company. Pure Extracts extracted the 65% pure THC full spectrum oil from Canadian grown, EU-GMP certified, dry cannabis flower before extracting the product to the company’s German partner for further processing for the needs of the German medical cannabis market. Pure Extracts has suggested that this is just the beginning of the Company’s activity in the European market and expects that this sale will pave the way for longer term supply agreements into 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 the Company’s release.
On February 16, Pure Extracts announced a licensing partnership with Taste-T LLC, a US-based company best known for bringing recognizable brands like Margarita Chill and Fireball Cinnamon to the cannabis edibles space. Under the agreement, Pure Extracts will receive exclusive rights to market these brands in Canada, as well as first rights to other countries around the world. While the Canadian rights to these well-known brands is significant, Pure Extracts recognizes the opportunity presented by bringing them to emerging international cannabis markets.
“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.
Cannabis Giants Start Looking Beyond Canada
Canada was the birthplace of some of the industry’s leading players, but opening markets now have companies eying opportunities abroad. Encouraged by recent indications by the US congress and White House, Canopy Growth Corp (NASDAQ:CGC) (TSX:WEED), Canada’s largest cannabis giant, has its sights set squarely on the US market. In a recent earnings call, Canopy CEO David Klein said that the company could enter the US cannabis market as early as 2021.
Aphria Inc. (NASDAQ:APHA) (TSX:APHA) made huge waves in the cannabis industry in February when the company announced its merger with fellow Canadian cannabis giant Tilray. In addition to effectively making the combined company into a cannabis industry juggernaut, this merger consolidates significant overseas assets. Aphria brings to the table a leading German medical-cannabis distributor in its CC Pharma subsidiary, while Tilray operates a large-scale Portugese cannabis production operation.
Also in February, Hexo Corp. (NYSE:HEXO) (TSX:HEXO) announced a definitive agreement to acquire all of Zenabis Global’s issued and outstanding common shares. Among the considerable assets that Hexo is acquiring is a strong foothold in the European markets. Zenabis has an established partnership with a local European partner in the pharmaceutical space, operating a local established EU-GMP compliant packaging and distribution center for medical cannabis products.
Khiron Life Sciences (TSXV:KHRN) (OTCQB:KHRNF) has been focused on the Latin American medical cannabis market, partnering with some of the region’s most respected medical associations and building a regional distribution network. In advance of Mexico’s impending legalization, Khiron has partnered with Tecnologico de Monterrey of Mexico to launch Latin America’s first accredited medical cannabis diploma program. The company is also in the process of establishing a network of medical cannabis clinics across major cities in Mexico.
Canada kicked off a trend of cannabis law reform that has become a massive market opportunity all over the world, and established cannabis industry players like Pure Extracts are well positioned to lead these new emerging markets.
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