Canopy Growth is entering the medical cannabis market in the United Kingdom, expanding the Canadian licensed producer’s international business.
Canopy will supply four Canadian-grown medical cannabis flower strains to Grow Group U.K. Ltd., a British manufacturer and distributor of prescribed cannabis medicines, the company said Tuesday.
It’s Canopy’s first push into the U.K. market.
Grow Group will sell the products under Canopy’s global Spectrum Therapeutics medical brand.
“Expanding availability of our products into the UK is another step in growing our European medical cannabis business and broadening the international reach of our Canadian-grown flower,” Canopy Growth CEO Luc Mongeau said in a statement.
Why does the UK make sense for Canopy’s expansion?
The flower comes from Canopy’s Kincardine, Ontario, cultivation facility, which is positioned to supply European Markets.
In August, German regulators renewed the site’s European Union Good Manufacturing Practice certification, which allows Canopy to supply medical markets across Europe.
Canadian producers have long dominated global cannabis exports, but their lead faces pressure in Europe, still the main export market for North American producers.
German regulators have questioned whether flower grown under agricultural standards and processed later in Europe meets strict pharmaceutical requirements.
Guidance issued in June identified drying as a critical manufacturing step that should occur where cannabis is harvested. If GMP obligations move upstream to cultivation, sourcing requirements could change, leaving Canadian producers exposed.
As a result of Brexit, the U.K. is outside the EU and sets its own import standards.
However, EU-GMP standards still apply for cannabis producers seeking a U.K. Medicines and Healthcare products Regulatory Agency permit.
What other Canadian cannabis companies operate in Europe?
Most U.K. medical cannabis sales are outside the public health system.
Fewer than 20,000 patients in the U.K.’s National Health Service have a prescription, according to Cannabis Europa.
That leaves the medical cannabis market largely private-pay, with an estimated 100,000 patients receiving cannabis through private clinics.
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Canopy’s international cannabis revenue reached CA$9.6 million ($6.92 million) in the quarter ended June 30, up 10% year over year, with growth driven by Europe and Poland in particular.
Canopy’s approach differs from its rivals.
Aurora Cannabis bought Internode Pharma and HAP Pharma in August, gaining an import facility and a licensed pharmacy in the U.K.
Tilray Brands began selling its own branded flower in the U.K. through the Lyphe Clinic and dispensary it acquired in April.
