Canada’s cannabis oil exports rise 300%, boosted by German demand

(This is the second installment of a two-part series analyzing medical marijuana exports from Canada. Part I looked at dried cannabisThis story has been updated from a previous version.)

Exports of medical cannabis oil from Canada had a breakout year in 2017 – and executives say it is just the start for a massive new overseas market.

Medical cannabis exports in oil form rose 300% from 2016 levels, according to data shared with Marijuana Business Daily by Health Canada. Analysts expect this trend to continue as countries legalizing medical cannabis look to imports to meet demand in lieu of domestic cultivation.

“Countries like Malta have outright banned smoked forms of medical cannabis from being permitted within their legislation,” noted Deepak Anand, vice president of government relations for the consultancy Cannabis Compliance.

“I believe we are going to see this trend – of cannabis oils demand and exports from Canada – significantly increase in the immediate future.”

In 2016, 100.8 kilograms of cannabis oil were shipped overseas. That jumped to 400.4 kilograms in 2017, as more countries legalized MMJ.

Cannabis oil has more upside potential than that of flower, analysts and executives say, because:

  • Oil allows for different forms of administration by patients.
  • Oil is easier and cheaper to transport overseas.
  • Many countries limit the form of medical cannabis that can be used, but oil is broadly allowed.

Germany leads

Germany, which is on track to become one of the world’s largest medical marijuana markets this year, imports more MMJ from Canada than any other country in lieu of domestic cultivation.

And that’s not expected to change any time soon, as a German court slammed the brakes on the country’s domestic cultivation plan in late March.

As a result, exporters from Canada and the Netherlands will have an even bigger head start over domestic production.

Germany took in 169 kilograms of medical marijuana oil from Canada in 2017. That was followed closely by Australia (145 kilograms), Croatia (37 kilograms) and the Cayman Islands (23 kilograms).

Canadian medical marijuana is already accessible by most of Germany’s 20,200 pharmacies from suppliers like Aurora, Tilray, Cronos, Maricann, ABcann, CanniMed (now owned by Aurora), Nuuvera (now called Aphria international) and MedReleaf.

The European Union’s largest economy expects to rely on imports to meet cannabis demand for at least a decade.

Applications up

The data from Health Canada also shows that export applications are skyrocketing.

In 2016, 64 export permits were issued for cannabis oil products.

The following year, that almost doubled to 114 export applications.

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

Oil over leaf

Canopy Growth’s Jordan Sinclair said oils can be used as a tool for destigmatizing cannabinoids by shifting the conversation to a language doctors speak.

“In new markets where doctors have limited exposure to medical cannabis prescribing, this paradigm shift can go a long way,” he said.

“Oils, and especially softgel capsules, are a more familiar format to doctors because they can be prescribed by the milligram of active ingredient and don’t have to be smoked.”

Aaron Salz, founder of the Stoic Advisory consulting firm in Toronto, says a large export opportunity exists because other countries are modeling their programs after Canada.

“Most countries are choosing to first legalize cannabis oil over flower,” he said. “So that’s created an opportunity for exports to countries that are starting with strict medical regimes with limited qualifying conditions.”

Matt Lamers can be reached at [email protected]

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