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Canadian exports of medical marijuana soar as producers seek overseas toehold

(This is the third article of a four-part series examining how Canadian cannabis companies are expanding globally. Part I was published Aug. 9 and Part II on Aug. 10. Part IV will publish Wednesday.)

By Matt Lamers

Canadian medical cannabis exports are surging, driven by licensed producers that are using overseas shipments as a way to establish local partnerships and gain a foothold in foreign markets.

In particular, exports of dried medical marijuana and MMJ oil products from Canada have soared since 2015.

And they are on pace to double this year from 2016 levels, according to data obtained by Marijuana Business Daily. Analysts expect this trend to continue in the near future as more countries legalize medical cannabis.

While exports remain a sliver of overall medical marijuana sales in Canada, licensed producers (LPs) have moved to capitalize on burgeoning overseas MMJ markets such as Germany, Australia and South America.

According to data from Health Canada, the government body responsible for issuing cannabis export permits:

  • Just over 45 kilograms (100.3 pounds) of dried cannabis and 94.7 kilograms of cannabis oil were exported through July 20 of this year.
  • For all of 2016, 44.8 kilograms of dried cannabis and 100.8 kilograms of cannabis oil were shipped overseas.

No medical marijuana was exported in 2015 under the former Conservative government, which did not share the pro-MJ views voiced by current Prime Minister Justin Trudeau.

Cam Battley – a member of the board of directors of Cannabis Canada, the industry association for licensed producers – sees exports as a means to an end.

“We’re going to see exports to multiple new legal medical cannabis markets soar,” he said, “but ultimately the real game is going to be building and owning capacity in new markets.”

How it breaks down

Over the past two years, Canadian LPs have exported cannabis oil to Australia, the Cayman Islands, Chile, Croatia, Cyprus, the Czech Republic and New Zealand. Dried cannabis has been sent to Australia, Brazil, Germany, Israel and the Netherlands, according to Health Canada.

No cannabis export permits were issued in 2015, while 43 were handed out last year and 75 as of July 20 this year.

Of the 75 permits issued this year, 11 were for dried cannabis and 64 for cannabis oil products.

In total, 118 export permits were issued by Health Canada as of July 20 under federal guidelines established between 2013 and 2016.

The data also shows that most export applications were approved.

In 2016, Health Canada received 11 export applications for dried medical cannabis and issued nine permits.

So far this year, Health Canada has approved 11 of 13 export applications submitted for dried MMJ.

Though growing quickly, exports still represent a tiny fraction of overall MMJ sales by the country’s licensed producers.

In the first three months of 2017, slightly less than 6,000 kilograms of dried medical cannabis were sold to 129,876 registered clients across Canada for medical use, meaning exports accounted for less than 1% of all sales.

Examples of Canadian exporters

To give their marijuana sales a shot in the arm, several Canadian licensed producers have turned to the export market:

More export growth anticipated

Looking ahead, analysts expect exports will continue to rise as Canadian LPs service niche markets and establish localized operations abroad.

Khurram Malik, a partner with financial advisory firm Jacob Capital Management, sees exports spiking to certain nations and regions before coming back down once Canadian LPs set up operations in those markets.

“Exports will be larger from where they are today, but I don’t think they will be a large part of the revenue mix (for Canada’s LPs) going forward,” he said, owing to the high costs of growing cannabis in Canada. “Canada won’t be cost competitive with markets overseas for exports.”

Battley, the Cannabis Canada board member, sees exports climbing in response to new markets coming online. Twenty-three countries have active medical cannabis laws, while another 14 countries have pending laws, not counting the United States.

“What we’ve seen thus far is a trickle,” he added. “Germany’s intention, for example, is to have licensed producers from other jurisdictions supply the market until 2019, hoping that by then there will be sufficient domestic capacity. But building and licensing high-quality capacity takes time.”

Matt Lamers can be reached at mattl@mjbizdaily.com

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“It’s California in 1995 All Over Again, Man” – Opportunities and Problems Piling Up in the European Cannabis Market – from Cannabis Business Executive magazine / Philip J. Cenedella IV

“It’s California in 1995 all over again, man.”

That was a comment I overhead during a conversation between an American and a German entrepreneur at the Mary Jane Berlin event held in Berlin in the second week of June, 2017.

Indeed, there may not be a better way to sum up the current state of the state here in Europe’s most populous country. Having been on the frontlines of the grassroots efforts in San Diego last century, it is fun to see how our industry is now growing in Germany and throughout Europe.  And like California back then, or now, the struggle is not always easy.

Here’s another interesting quote of the month:

“European markets are increasingly important to the cannabis sector. Each has a well-funded medical system, residents who seek natural and complementary therapies, and a government-supported mandate to stop the rising tide of opiate addiction related to chronic pain treatment.”

-Benjamin Ward, CEO, Maricann Group, Inc.

As of August, 2017 starts, the medical marijuana patients in Germany are experiencing “sold out” conditions nationwide, and the two exclusive importing countries (Canada and the Netherlands) are anticipating further bottlenecks as their in-country supply needs change. This is a significant problem – but also an opportunity for GMP-certified growers to fill the gap. If, and how, the German government opens up alternative supply to support their medical patients will be the top story in Germany this year.

From the patients perspective, there are two bad things about the current state of affairs: Little to no choice in their required medicine and their insurance companies are now refusing to cover the costs for the medicine as stipulated in the federal law.

Of course, lawyers are now getting involved and insurance companies are starting to be forced into approving valid claims from their policy-paying customers. But it is a silly, slow process to say the least.

The solution the German government is pursuing is to award 10 grow licenses to companies that will then produce 200 lbs. cannabis ​each within the country. The first bud from those plants are not scheduled to be picked until sometime in 2019, which is simply too long for patients to wait.

Some of the companies that have been publicly mentioned as potential winners of a grow license are Spektrum Cannabis, which is the Canopy Growth company formerly known as MedCann; Maricann GmbH, which is the new German subsidiary of its Canadian parent, Bedrocan, that has been a leader in the industry but recently run into a dispute with their Canadian licensee, Bedrocan International; Aurora Cannabis from Canada, which recently acquired the German firm Pedianos adding an EU-wide, medical marijuana distribution capability; and ABCann of Canada, which touts the “Father of THC” Dr. Raphael Mechoulam as a key member of their board of directors.

Homegrow options in Germany are currently not permitted, and existing indoor/outdoor farm operations are not yet able to be registered, licensed and taxed.

The black market continues to win, and patients continue to lose.  Cannabis business executives worldwide need to effectively work with the German government to develop the solutions we all know exist.  Three organizations that are key to this effort are the BfArM (www.bfarm.de )  the DHV (www.hanfverband.de )  and the GTAI ( www.gtai.de )

My personal comment is the government, politicians and regulators here in Germany need to listen to their constituents who support our industry by over 60 percent nationwide, according to a recent poll. The total quantity of flower to be delivered by the 10 licensees is probably less than what my buddy Butch has in his building back in California to handle his patients which live within five miles of the office.

Yes I am joking, Butch usually has less, but the point is – ​it simply is not enough for a population twice the size of California.

With all the talk about Germany, it is also important to remember that it is one of 18 countries within Europe that currently allow for some form of medical marijuana.  Besides Germany, there are provisions for the distribution and use of medical products in Austria, Belgium, Czech Republic, Denmark, Finland, France, Greece, Israel, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and, the most recent addition, Poland.

This is an interesting list that, again, shows these are historic times here in Europe.

Sadly missing from the list above is the United Kingdom, and that has affected people we know. Our friend Vera Twomey, and her entire family had to leave the U.K. last month just to take care of their young daughter with Dravet’s Syndrome. In the U.K. their daughter suffered from up to 30 grand mal seizures a day while taking a regimen of pharmaceutical drugs.

Think about that for a moment – 30 grand mal ​seizures a day.

Now living as “medical refugees” from their homeland, the Twomey’s and their daughter are now dealing with zero grand mal seizures a day thanks to her medical marijuana.

30 grand mal seizures a day, now zero a day – everyday for the past 3-4 weeks.

The United Kingdom calls medical marijuana illegal. Patients and advocates call that thinking arcane, unjust, and possibly criminal itself. They are now petitioning the Human Rights Commission of the European Union in Brussels for help. I am positive their efforts will be successful – it is just a matter of time.

Vera and her family hope it comes within her daughter’s lifetime. That is all for now. Have a successful rest of the summer, rest up and get ready because I believe that Q-4 of 2017 is going to be a busy one for our industry and your company.

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Medical marijuana companies in Canada capitalizing on ‘insane’ growth abroad – by Matt Lamers

https://mjbizdaily.com/canadian-medical-marijuana-companies-tap-insane-growth-overseas/

(This is the first article of a four-part series examining how Canadian cannabis companies are expanding globally. Part II will be published Thursday and Parts III and IV on Aug. 15-16.)

By Matt Lamers

Canadian medical cannabis companies are primed to tap what one industry executive calls “insane” growth overseas.

Flush with capital and largely free from American competition, Canadian licensed producers (LPs) are spreading their wings to gain a first-mover advantage in new markets as more countries legalize marijuana for medical use.

Fueling the overseas push is the vast amount of funding the companies have accumulated: During the first half of 2017, Canadian cannabis companies raised more than 1 billion Canadian dollars ($790 million), up more than 1,700% from the same period last year.

“One of the big advantages that Canadian companies have internationally right now is that we have access to capital that companies in no other country can match,” said Cam Battley, a member of the board of Cannabis Canada, the industry association for licensed cannabis producers.

“In addition to our expertise and the credibility of having operated successfully under rigorous government regulation in Canada, we have access to the level of capital required to make significant investments in equity and also in capital projects.”

The potential is significant. A recent analysis by Toronto-based Eight Capital, a full-service investment dealer, pegs the potential international medical cannabis market at CA$180 billion ($142 billion) over the next 15 years.

“We believe the path to global expansion for the LPs starts by partnering through medical-focused opportunities, and that in the longer term, international medical markets could be major upside opportunities,” the report states.

Germany and Australia have been the early focus for nearly a dozen Canadian MMJ companies tapping international markets through exports of flower and oils, licensing arrangements, distribution deals and acquisitions. Others have accumulated interests in South America.

Europe, where about a dozen countries permit sales of MMJ, is the big prize.

Battley said Canadian companies are going overseas to capitalize on their advantage while it exists.

“There are no significant American competitors right now on the international stage, so the best opportunities are open to well-capitalized Canadian producers,” he said.

Vahan Ajamian, an analyst in Beacon Securities’ Toronto office, said Canadian cannabis firms are driven by opportunity overseas rather than competition at home.

“There are all sorts of opportunities in foreign jurisdictions,” he said. “Germany is a hot one. Other countries in Europe are going medical. Mexico legalized medical cannabis. The world is slowly but surely going that way.”

“These are opportunities you’re looking to exploit, because of your size and capability in Canada,” he added.

The race to Germany

After Germany agreed to greatly expand its medical cannabis program earlier this year, a number of Canadian companies quickly established a foothold in Europe’s largest economy.

Germany became the first country to cover the cost of medical cannabis through its national health insurance system for any therapeutic application approved by a doctor.

The country is conducting an application process to select 10 licensed producers to cultivate 200 kilograms (441 pounds) of medical marijuana annually from 2019 to 2022. The 10 licensees could be announced in September, according to industry officials.

Until domestic producers are operational, imports will be needed to meet German demand.

Among the Canadian companies vying for one of the coveted licenses is Vancouver, British Columbia-based Aurora Cannabis, which lists as ACBon the Toronto Stock Exchange.

In May, the licensed MMJ cultivator acquired Germany-based Pedanios, an importer, exporter and distributor of medical cannabis in the European Union. It’s the largest medical cannabis distributor in Germany.

Pedanios passed the first stage of the application process.

“Demand in Germany is expanding at an insane rate,” said Battley, who also serves as executive vice president of Aurora. “Not only is Germany creating a very well-thought-out medical cannabis system, they’re reimbursing medical cannabis under the national health system.”

“We see Germany as our anchor in Europe, and that’s a market of 500 million people in the EU,” added Battley. He said Aurora is making “very considered and select investments that are anchoring us in markets that we see as very attractive future markets for medical cannabis. The good opportunities that come along are available at attractive prices right now.”

Ottawa, Ontario-based ABcann Global (TSX Venture: ABCN), another licensed producer, also is pursuing opportunities in Germany, and its common shares trade on the Frankfurt Stock Exchange.

CEO Aaron Keay said ABcann Global sees Germany as a gateway to broader European opportunities.

“We’re absolutely at the forefront,” he told Marijuana Business Daily. “We look at Europe as a significant part of our strategic plans for expansion, in addition to what we’re doing domestically.”

Keay confirmed that ABcann expects to acquire a distribution license and start exporting MMJ to Germany in the third quarter. He also said ABcann is “very interested to continue to pursue the cultivation in Germany.”

Canopy Growth (TSE: WEED), a licensed producer based in Smiths Falls, Ontario, established a foothold in the country with exports to Germany and its acquisition of MedCann, a Germany-based pharmaceutical distributor, in late 2016.

“Frankly, it’s growing very, very quickly,” Canopy Growth spokesman Jordan Sinclair said of the German market. “It’s very important.”

“There’s a lot of things that happen in the German market that are going to mirror what happens in Canada. So from a positioning perspective, and with the experience we bring to the table, we think we’re going to excel,” he said.

Other Canadian players in Germany (and nearby) include:

Australia bound

Australia, with a comparable population and demographic makeup to Canada, is receiving considerable interest from international cannabis companies.

The country legalized medical marijuana last year for patients with chronic or painful illnesses.

In May, CanniMed (TSE: CMED) marked its first shipment of commercial cannabis oil to Australia with the sale of 3,600 milliliters of oil to Health House International, a medical cannabis wholesaler in Perth.

A CanniMed spokesperson said the current focus is on the global medical market, rather than the Canadian and U.S. recreational markets, “because the opportunities allow for international expansion faster.”

Canopy Growth wants to use the lessons it learned in its early days in Canada to help AusCann Group Holdings (Australian Securities Exchange: AC8) in Australia. Canopy Growth will offer its expertise to AusCann in exchange for an initial 15% ownership stake in the company. AusCann’s strategic partner has been granted two cannabis licenses from Australia’s Office of Drug Control.

AusCann will import MMJ from Canopy until it’s capable of supplying locally produced medicine.

“Over the past year or so we have been supplying them with some of our intellectual property so they can come out of the gate strong. In exchange for that, they gave us a small stake in the business,” a Canopy spokesperson said. “We’re not exporting actual cannabis to Australia, we’re only exporting intellectual property.”

Aurora Cannabis entered the Australian market by taking a 19.9% stakein Cann Group Limited (Australian Securities Exchange: CAN). Cann is the first Australian company licensed to conduct research on and cultivate medical cannabis.

Aurora will also be exporting its intellectual property under an agreement with Cann.

ABcann Global is also actively looking at opportunities in Australia, CEO Keay told Marijuana Business Daily.

Canadian licensed producers have also done business in ColombiaCroatiaSouth AfricaNew ZealandChileCyprusBrazil, the Cayman Islands, Israel, Spain, Uruguay and the Netherlands.

Matt Lamers can be reached at mattl@mjbizdaily.com.


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PATIENT UPDATE: The patients in the study had used opioid-based pain medication within the past six months: 97 percent were able to decrease their opiate intake with cannabis, 92 percent said that cannabis possessed fewer adverse side-effects than opioids, 80 percent said that the use of medical cannabis alone provided greater symptom management than did their use of opioids.

Berkeley, CA: Pain patients report successfully substituting cannabis for opioids and other analgesics, according to data published online in the journal Cannabis and Cannabinoid Research.

Researchers from the University of California, Berkeley and Kent State University in Ohio assessed survey data from a cohort of 2,897 self-identified medical cannabis patients.

Among those who acknowledged having used opioid-based pain medication within the past six months, 97 percent agreed that they were able to decrease their opiate intake with cannabis. Moreover, 92 percent of respondents said that cannabis possessed fewer adverse side-effects than opioids. Eighty percent of respondents said that the use of medical cannabis alone provided greater symptom management than did their use of opioids.

Among those respondents who acknowledged having recently taken nonopioid-based pain medications, 96 percent said that having access to cannabis reduced their conventional drug intake. Ninety-two percent of these respondents opined that medical cannabis was more effective at treating their condition than traditional analgesics.

The study’s conclusions are similar to those of several others, such as these herehereherehere, and here, finding reduced prescription drug use and spending by those with access to cannabis. Separate studies report an association between cannabis access and lower rates of opioid-related abuse, hospitalizations, traffic fatalities, and overdose deaths.

For more information, contact Paul Armentano, NORML Deputy Director, at: paul@norml.org. Full text of the study, “Cannabis as substitute for opioid-based pain medication: patient self-report,” appears in Cannabis and Cannabinoid Research.norml


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Commentary about Western Europe – by Ben Ward CEO of Maricann – on CNBC

Forget the US. Here’s where medical marijuana is really taking off

  • There is a global shift in cannabis towards Western Europe.
  • That’s where the action in medical marijuana is really heating up.
  • Investor’s focused solely on the U.S. are missing the huge potential overseas.
Benjamin Ward, CEO of Maricann Group Inc.
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David McNew | Getty Images

There’s a groundswell of support for cannabis legalisation in the United States, with 29 states, as well as Washington D.C. approved for medicinal cannabis, and eight for lifestyle use.

Things are farther ahead in Canada. Regulations for production and sales have been in place for over three years, and the federal government has introduced a timeline to full federal legalisation for lifestyle use in July 2018. Capacity in Canada for lifestyle alone is projected to reach “5 billion dollars per year to start,” according to a recent report from Deloitte.

Yet, while many investors focus on opportunities stemming from Canada’s upcoming legalization – plus the longer-term investment potential in what will likely be a growing number of American states – they are missing the global shift in cannabis towards Western Europe. That’s where the action is really heating up.

The population of the United States is approximately 325 million. There are 35 million living in Canada. But compare that to the European Union’s population of 510 million. Germany, with more than 80 million people alone, legalized medicinal cannabis in January of this year. Add that to Italy’s nascent existing medicinal cannabis program.

“European markets are increasingly important to the cannabis sector. Each has a well-funded medical system, residents who seek natural and complementary therapies, and a government-supported mandate to stop the rising tide of opiate addiction related to chronic pain treatment.”

These European markets are increasingly important to the cannabis sector. Each has a well-funded medical system, residents who seek natural and complementary therapies, and a government-supported mandate to stop the rising tide of opiate addiction related to chronic pain treatment.

Taken together, these and other European examples show that we’re seeing traditionally conservative attitudes shift as medicinal cannabis is legalized.

That also means investors in cannabis who focus solely on North America are missing the huge potential found across the Atlantic.

Those investors restricting their cannabis investments to this side of the ocean – and in the United States in particular – are left navigating an array of legislation on a state-by-state basis, prohibitive out-of-state investment regulations, and a prohibitive tax code. These investors miss the boat as they churn through such choppy water.

In Germany, cannabis will be produced by licenced producers and distributed to pharmacies like any other medication, with each prescription eligible for full reimbursement from health insurance.

In their patient-driven markets, Germans, Italians and other Europeans are demanding the alternative of cannabis over opiates.

In our view, people who think opiates are the only answer to pain relief have a similar mis-perception as people who still think medicinal cannabis is nothing more than smoking up with their doctor’s permission.

They are both wrong.

In short, medical cannabis is about personalized and effective medicine. It’s not about getting high.

The Europeans know that, as we do in North America.

As Germany moves smartly down this path of medicinal cannabis, the rest of Europe will soon follow. And to ignore 500 million people in a stable economy is a mistake.

We’re at the start of the global revolution. We all need to be looking to Europe next.

Commentary by Benjamin Ward, CEO of Maricann Group Inc., a vertically-integrated greenhouse producer and distributor of medical cannabis. Toronto, Canada-based Maricann is now building global teams in rapidly expanding European markets as well.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.


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The State of Cannabusiness in Germany

The State of Cannabusiness in Germany

As a cannabis business executive, you undoubtedly have been following some of the significant events happening in Europe and you have asked yourself: “How does this affect my plans?”

It may be the German government establishing a nationwide medical marijuana program, or news about the Canadian companies buying or merging with their European counterparts that has your attention. But you know the times are a changin’ and you might want to benefit from this historic moment in our Industry.

For those companies that already have a strategic international plan in place, the opportunities are boundless.  Germany, a nation with 2.5 times the population of California, is leading the way with the a national, Federal-government approved, medical marijuana law already in place, and numerous regional efforts to establish recreational use are getting off the ground as I write this column.

Having been an advocate in California during the medical marijuana legalization push of 1990s, and now living here in Germany as they build their own regulated marketplace, it has been fun to be involved. I’d now like to share some of the organizations that may be able to help you and your company, if Europe is indeed on your radar.

Das Bundesinstitut für Arzneimittel und Medizinprodukte (BfArM) is the German federal government’s  Institute for Drugs and Medical Devices and is lead by Professor Dr. Karl Broich. Their website is www.bfarm.de and they are basically the cannabis bureau of Germany, charged with implementing the medical marijuana law.  Interestingly, they will also be the sole purchaser of foreign-produced medical marijuana products, and then oversee the distribution exclusively though licensed pharmacies.

So Germans will be going to their local pharmacy to obtain their medicine, which officially should be paid by their insurance company.  Of course, the details are still being worked out, and I know of at least two lawsuits against insurance companies not paying for their clients medicine.

Last month, the BfArM put out a call for bids for the first ten authorized grow licenses in the history of Germany.  Negotiations are underway and the winning bidders should be announced shortly.  We will keep you updated on this, and all important details emanating from Europe, in future columns.

The Deutscher Hanfverband (DHV) is the German Hemp Association in Berlin and a fantastic resource and advocacy organization. They have been instrumental in getting the country to this point and their website is https://hanfverband.de I highly recommend signing up for their newsletter (which can easily be translated.)  Their next big event is the Hanf Parade in Berlin in August which will bring together over 10,000 advocates calling for open access.

For companies that want to get serious about being in Europe, the best organization I know of is the German Trade and Investment office located in Berlin which is part of the German Federal Ministry of Economic Affairs. Their website is www.gtai.de.

Their knowledge is vast, their connections incredible, and there is no charge for their services. They want to make it easy for international companies in our space to help Germany build their regulated marketplace. They provide advanced research, site-selection, tax information. And.. they are just an email or phone call away.

Of course, there are a total of 51 independent states that make up Europe and 28 of those make up the European Union.  To some degree all of these countries are changing the way they treat medical marijuana and CBD products.

If you are looking for some opportunities in this region, I would suggest looking not only at Germany, but also The Netherlands, Spain, United Kingdom, Switzerland, and the Czech Republic. Although Israel is not in the EU region, their expertise, leading edge research, products and capabilities are to be noted.

Before concluding, I need to give a shout out to Mr. Alex Rogers and his team at ICBC Berlin who put together one of the best industry events I have ever attended.  Back in April, in Berlin, almost 1000 attendees and exhibitors from throughout the world gathered to share information, make connections and close business deals.

Congressman Dana Rohrabacher, chairman of the Cannabis Caucus in the U.S. House of Representatives, was the keynote speaker and shared stories on his German ancestry, his first meeting with Ronald Reagan, and why legalizing our plant makes sense in so many ways.

Tommy Chong was also in attendance, was way coherent, and meeting him was definitely one of my personal highlights.  Yes, I admit it, I listened to his albums way back in 1971.

So I wish you a productive, successful and fun month ahead as we collectively take the next steps to “Make Cannabis Great Again” here in Europe, and wherever you are reading this in the world.

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Canada currently has 428 companies applying to become licensed cannabis producers “LPs”

https://news.vice.com/story/canada-just-made-it-easier-to-produce-legal-medical-weed

Canada just made it easier to produce legal medical weed

Canada just made it a lot easier for companies to get licenses to produce medical marijuana — something industry experts predict will significantly boost the country’s cannabis supply and potentially result in hundreds of new companies entering the system ahead of the legal recreational market next year.

There are currently 428 companies in the queue applying to become licensed cannabis producers (or “LPs”).On Friday, Health Canada announced in a news release it had streamlined the notoriously lengthy and rigorous application process to become an LP. The new measures will “enable increased production,” the department stated. Since the licensing program came into effect in 2013, there have been 45 medical marijuana production licenses granted, the most recent of which was granted this week.

“I do see this as a game-changer, a significant development that will impact the cannabis sector overall,” said David Hyde, a security consultant who has worked with 155 LP applicants, including 18 that have been granted licenses.

The approvals process has picked up this year, with one or two companies getting licenses every month. Currently, only patients with valid medical prescriptions can legally get cannabis in dried or oil form from one of these LPs, through the mail. Otherwise, they can apply to grow their own.

“The world is going to explode in terms of the opportunities.”

The changes announced by Health Canada include hiring new staff to help speed up the application process that can sometimes take more than a year, removing the cap that prevented LPs from growing more than a certain amount, as long as it’s within the capacity of their vaults. And the companies now have more freedom to modify and expand their facilities.

Many licensed producers have lamented the layers of bureaucracy required to get a license, including extensive criminal background checks of those in charge, as well as costly security infrastructure requirements.

Hyde predicts that a significant number of the applicants in waiting will be granted licenses in short order because of the revamped procedures. And even though these are all medical licenses for now, he added the changes are clearly to help the industry get prepared for the significant recreational demand to come. A report released by Deloitte predicts Canada’s recreational market could be worth billions.

Once the Liberal government’s recreational cannabis law comes into effect likely sometime next year, these companies are slated to be at the helm of the supply chain, although it will be up to the provinces and territories to decide the way in which the product is sold.

“Canada is really the global gold standard in terms of cannabis production. So the export market is also going to be shining brightly. So I think we’re going to need several hundred producers at the end of the day of different sizes across this country to provide all the different needs that are going to come down the pipe,” explained Hyde.

“People can’t tell the difference between licensed producers anymore.”

“The world is going to explode in terms of the opportunities.”

But with all of this new growth comes concerns that the industry is becoming homogenous. On Friday, cannabis business analysts warned an audience at the Lift Cannabis Expo in Toronto about “massive investor fatigue.”

“Fundamentally, to some degree, these businesses, as prescribed by Health Canada and being in a highly regulated industry are almost forced to be identical,” Aaron Salz, CEO of Stoic Advisory, said in a speech on Friday. “People can’t tell the difference between licensed producers anymore.”