International Cannabis Trade- It’s Legal and Expanding


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In 1961, an international treaty called the Single Convention on Narcotic Drugs was adopted by the UN and set global drug law precedence. Today the UN still considers cannabis schedule I and IV, claiming it has no medicinal use or value, just like the United States. The International Narcotics Control Board (INCB) functions relative to countries under the treaty much in the same way that the Federal US government acts in relation to individual states (to a degree), wherein countries may make individual determinations on narcotic substances. Countries desiring to involve themselves in international drug trade and who have agreed to the resolutions must involve both of their governments in order to conduct such business. As each country has separate mandates and laws regarding various substances, this can become an increasingly complex form of global trade. Despite this fact, an increasing trend has been seen in countries desiring to cultivate new opportunities in the international market.

As the United States has taken time to implement 8 recreation use and 29 medical use markets, Federal attitudes towards the expanding industry have shifted as administrations come and go. Despite current attitudes from the likes of Attorney General Jeff Sessions, and mixed opinions from many other U.S. legislators, the cannabis movement has quickly become a global industry as more and more countries decide to engage in the global space. While the prevalence of cannabis cafes in the Netherlands have existed for years, their expansion into the international market heralded the beginning of a new era in global commerce. As one of the undisputed forward-thinking leaders in commercial cannabis, the Netherlands has long been looked to as an example of how legislation and attitudes can shift towards the acceptance of adult use and medical use markets. California’s initial move towards decriminalization in 1996 followed the existence of the Netherlands market even though it has taken many more years for the California shift to come full circle. Even now, the idea of the United States taking place in the import/export trade for cannabis is seen as a pipe dream to detractors, and inevitable to industry leaders.

Despite the slow change approach here in the states, one close American entity has already begun to emerge as an industry leader in the international markets. Canada has a national medical use program thanks to the efforts of influential politicians like Kevin Trudeau. One such player in the Canadian space, Eric Klein of Cronos Group, in regards to international developments stated “Our projections indicate that the global international medical cannabis market will develop faster than the recreational market,” Klein wrote, “and that the size of the opportunity will be dictated by market-specific regulations.” Further validating his statement, Cronos Group has already begun exporting cannabis flower products to pharmacies in Germany as of October 5th, 2016. In May of the same year, German health officials created and approved a medical use program for “severe illnesses” and passed full legislation in January of 2017. Until this German program begins cultivating and testing product of their own, all product will remain imported from other international medical markets. The question as to how the movement by Canada, Germany, and others into the global cannabis trade affects their relations with the INCB, does introduce deliberation and conflicting opinions on these maneuvers. Canadian law professor at the University of Ottawa, Steven Hoffman explained: “[Canadians] might not think that it’s such a big deal to break the UN drug control treaties, but we certainly care when other countries break other treaties, like treaties against genocide or human rights violations or nuclear non-proliferation,” he says. “Canadians should know that we can’t just pick and choose which treaties to follow, without encouraging other countries to do the same.”

Another major Canadian producer is the well-known Tilray cannabis company. Owned as a subsidiary of the United States Privateer Holdings (also holding companies such as and Marley Naturals), this arm of the company has made some of the most pronounced international movements of any player in the commercial cannabis field. Their main product for export is a medical oil extract known as Tilray Drops. So far the company has already exported these oils to countries such as Germany, Croatia, Brazil, Chile, and New Zealand, with more on the horizon. Plans exist to begin export to Brazil, along with additional orders to undisclosed countries within the European Union. The Australian state of Victoria also made agreements with Tilray to receive medical cannabis oils for 29 children diagnosed with severe epileptic conditions.

Expanding on this movement by Victoria, Australia stated this past Thursday that it will now be the 4th country to legalize the exportation of medical cannabis products.  Recreation use in the country is still illegal at present, so cultivation operations are not as developed as in more mature markets. Despite this fact, the Australian government seems intent on becoming a global leader in the space. “Our goal is very clear: to give farmers and producers the best shot at being the world’s number one exporter of medicinal cannabis,” Health Minister Greg Hunt told reporters in Melbourne. Hunt additionally noted that the new legislation will include a provision that international sales can only occur after local patient needs have been addressed. Peter Crock, CEO of Cann Group, stated that “While the Australian patient base is growing, it is very small…. Being able to export will allow us to have the scale to increase production.” With the mandate for local patients to be addressed prior to exportation, the current low demand from Australian medical patients may be a blessing in disguise for companies who are intent on pursuing overseas opportunities.

Over a dozen Australia-based cultivation companies saw significant increases in stock value after the announcement. Companies such as Cann Group, BOD Australia, and Hydroponics Company saw increases as much as 30% or more. One company, AusCann Group saw a 54% increase in value after the announcement, and international sales have yet to even take place. It is clear there is ardent support in the market for such global progress out of the island nation, and investors see the opportunity to buy in early. The market is not fully approved as of yet. Australian Federal Parliament must still approve the proposal when it returns to session in February, though it is expected to pass at this time. The University of Sydney has published rough estimates arguing that current legal market size in Australia is roughly $100 Million dollars AUS ($78 Million USD), and the interest in further tax revenue for a global expansion seems it may be too good for the government to pass by.

As Australia becomes the 4th to export cannabis behind the Netherlands, Canada, and Uruguay, Israel claims it is only a few months behind the rest. Uruguay’s International Cannabis Corporation (ICC) was slated to export its first batch of cannabis oil this past December according to the company’s chief executive. Headquartered in Montevideo, the company also has plans to sell internationally to Canada and Mexico (also beginning importation). “The goal is to export it. But if the Public Health Minister thinks it can be commercialized in the local market the idea would be to do that,” according to the same executive, Alejandro Antalich. The interesting standpoint of the Uruguayan government is that while recreational and medical are both available domestically within the country, only certified medical products are legal for export trade. ICC sells both recreationally and medically with production from over 575 acres and intends to continue expansion with another $10 Million invested over the course of 2018. For Israel’s part in international trade, their strong reputation in the market and Federal support for cancer testing and implementation may see their emergence as a global leader once exports are operational.

Though initially a crusader in the cannabis market, internal conflict and Federal controversy in the United States have resulted in national stagnation and the potential to lose out on billions of dollars in global trade. It remains to be seen whether the Trump administration will choose to champion the cannabis market in America and pave the way for global success.

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