Canadians Reaching Across the Pond: Curaleaf and Tilray Deals Mark Inroads to Europe
By Oliver Bennett, Special Contributor to New Frontier Data
As COVID-19 tentatively recedes, and post-pandemic economic recovery moves onto the agenda, Europe is again growing apace as a locale for overseas cannabis investment. An abundance of recent business initiatives shows that there is increased cannabis business traffic, with big names in the industry jostling for space across the European continent.
In one of the most important recent announcements, Canadian medical cannabis giants Tilray and Aphria merged in May to create the world’s largest cannabis company by revenue, with sales in late 2020 accelerating by 20.5% year-over-year at $57 million USD, and revenue rising 26% to $210 million USD. With Europe identified as its stated grail for cannabis investment, Tilray (now incorporating Aphria) is hoping to make a significant move into a European market widely expected to reach $37 billion USD by 2027, with an annual growth rate of almost 30%.
Prior to their merger, both of cannabis giants had made significant inroads into Europe. Indeed, Tilray has long had a licensed cannabis production facility in Portugal, and an established European headquarters in Germany. But its combined European operation continues to grow, and recently Tilray partnered with a U.K. company, Grow Pharma, with a view to import and distribute Tilray’s medical cannabis to that non-member of the European Union (EU). Tilray also recently sent its first medical cannabis shipment to Spain, and (with its production facility) it is set to sell medical cannabis in Portugal and beyond, to other European markets as it expands. It also has a weather eye on the legalisation of the cannabis market in countries such as Israel, Germany, and Portugal itself, where a recent proposal to parliament suggested a “participated and inclusive process” as well as a “considered, rigorous and effective law” for the legalisation of personal-use cannabis.
The Tilray news is bullish enough, but it follows closely on the heels of Curaleaf (the market leader by revenue in the U.S.), which acquired EMMAC Life Sciences in April for $286 million USD, and is now moving into Europe with a huge scale of ambition.
Recently, Curaleaf’s German subsidiary, Adven GmbH, announced a partnership with Zambon GmbH (the German subsidiary of Italian company Zambon Spa) to make medical cannabis treatments available to patients with neurological disorders. Due to begin this summer, Curaleaf’s International CEO Antonio Costanzo claimed it as “the first European pharmaceutical and medical cannabis partnership”; regardless, it is certainly another step on the way for Germany’s medical cannabis market – Europe’s largest – projected to be worth $2.1 billion USD by 2025.
On another occasion, Curaleaf founder and chairman Boris Jordan suggested that the European cannabis market could soon eclipse that of North America, and that he sees the Iberian peninsula countries of Portugal and Spain (already cannabis-friendly) as good jumping off points for expansion into various other regions, including Eastern Europe and Africa.
Less well-known North American companies are also citing Europe as the world’s key business target. Calgary-based growing company High Ground believes that Europe is the largest potential medical market, based on the premise that Europe offers at least twice the wholesale cost as Canada, and that its population of about 750 million vastly exceeds that of Canada (with 37.5 million). It is currently setting up an EU-certified, Good Manufacturing Practice (GMP) processing and packaging plant in canna-friendly Malta. One aspect of its strategy is that it notes how Germany and the Czech Republic government health insurance programs pay for cannabis prescriptions – a potentially good source of revenue.
Beyond the North American giants, there are other moves being made across the Atlantic into Europe. Founded in Uruguay, the RAMM Pharma Corp. has announced the acquisition of Italy-based Canapar Corp. With a 1,000-hectare plant on the Mediterranean island of Sicily, Canapar claims to have the largest high-tech extraction plant in Europe, and has integrated the cultivation and production of both pharmaceutical and cosmetic products to cover the gamut of high-end cannabis products from wellness to respite for chronic illness.
Such movements are important in themselves, but they also attest to a shift in the European mood following the pandemic. With the cannabis industry as a tool for recovery, attitudes are changing fast, and European harmonisation is the next step. As such, regulatory changes, frictionless medical supply chains, and recreational reform are respective elements of the agenda for acceleration – and the recent inbound business ventures speak to a newfound confidence in Europe’s cannabis industries.