Canadian companies are increasingly expanding abroad in pursuit of opportunities for growth in the cannabis sector. Many countries coming to terms with the benefits posed by the cannabis plant, be it for medicinal and recreational purposes, has created a window of opportunity. The likes of Aurora Cannabis Inc. (TSE:ACB), Canopy Growth Corp (TSE:WEED), and Tilray Inc. (NASDAQ:TLRY) have already set foot in the European market with strategic investments.
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Canopy Growth has already set sight on the German’s cannabis market with the acquisition of cannabis firm C3. The company is also looking to expand its footprint into Spain having acquired some stakes in Spanish pot producer Cafina. Britain is another exciting market that the company is eyeing following the acquisition of skincare and wellness outfit This Works.
Tilray has also set eyes on the European cannabis market following the completion of a $22 million investment in a Portuguese research and cultivation campus. Aurora Cannabis, which boasts of one of the biggest cannabis production capacity, has already made its presence felt in Europe with the acquisition of Portuguese marijuana producer Gaia Pharm. The company has also won a tender to start producing and distributing cannabis in Germany.
Canadian companies are expanding abroad in a bid to accrue a substantial amount of market share in the burgeoning sector. Increased application of cannabis-derived products to control symptoms of various diseases and address various chronic issues essentially means big business.
A company that accrues a substantial amount of market share stands to generate vast returns, as the global medical cannabis market is poised to clock highs of $56.70 billion by 2026.
Europe Cannabis Opportunity
Expansion into Europe by Canadian cannabis producers does not come as a surprise. The European market presents a unique opportunity given the population size and on the fact that medical marijuana products are becoming increasingly popular in Germany, the U.K as well as Italy, Netherlands Spain, France, among others.
“We expect the European Union to become the largest medical cannabis market in the world. And we expect this to be driven by the availability of medical cannabis through government-subsidized health care systems,” Tilray said in an emailed statement.
The prospects of the European countries legalizing recreational use is another prospect that is forcing Canadian companies to expand into the region. The government of Luxemburg has already hinted at the possibility of following Canada in legalizing recreational use but with strict laws.
Germany following Luxemburg in legalizing recreational use would also mean big business for the likes of Aurora and Canopy Growth given the size of the market. Germany is billed, as the largest and fastest-growing medical cannabis market should provide exciting opportunities for Aurora and Canopy growth.
However, Germany medical marijuana market could pose some challenges as regulators are calling for the sale of products with conclusive clinical trials. Only businesses with products based on science and efficacy will be able to survive the market, should tighter regulations on the sale of cannabis products come into play. Plans are already underway to get rid of prescriptions without trials as a way of encouraging the sale of products with proven efficacy.
