Despite coronavirus, global supply chain for medical cannabis stable

Cannamedical took delivery of this 500-kilogram shipment of flower from Tilray in 2019. (Photo courtesy of Cannamedical)

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International medical marijuana supply chains appear stable for the time being despite the coronavirus pandemic, with shipments to Europe’s largest market, Germany, remaining uninterrupted.

Despite more European countries going into full lockdown mode or closing borders because of the pandemic, disruption in the shipments of medical cannabis to Germany aren’t likely in the short term, according to industry experts.

International cannabis companies are implementing work-at-home initiatives to encourage social distancing.

Several of Germany’s main suppliers – including the Netherlands’ Office of Medicinal Cannabis, Canadian firms Canopy Growth and Aurora Cannabis as well as a few German wholesalers – all told Marijuana Business Daily that they do not foresee supply interruptions in the short term.

The pandemic is exposing the fragility of some international supply chains, and Germany’s cannabis market relies on imports from a small number of suppliers from only a handful of countries.

Nicole Groot Bruinderink of the Office of Medicinal Cannabis told MJBizDaily the OMC “doesn’t expect any disruptions.”

Ole Heil, director of public relations and communications of Netherlands-based Bedrocan – which supplies cannabis to the OMC – told MJBizDaily that “Bedrocan’s production and supply chain are unaffected.”

Sales to the OMC, Bedrocan’s only client, “are normally executed and delivered at the agreed times for now,” Heil said.

He expects the company to be able to continue to operate as usual.

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How likely is it that Germany will suffer short-term medical cannabis supply issues due to coronavirus?
How likely is it that Germany will suffer short-term medical cannabis supply issues due to coronavirus?

Bedrocan said it maintains several months of supply for critical inventory.

“In case of crisis, we can continue functioning as normal with minimum personnel,” Heil said. “That is the advantage of working within a highly controlled environment where little human action is required.

Paul Steckler, co-managing director of Canopy Growth’s Europe division, told Marijuana Business Daily the company “will continue to supply medicinal cannabis across Europe through the Spectrum Therapeutics Pharmaceutical arm.”

“At the same time, we have proactively taken steps to minimize the risk of COVID-19 across all of our operations. We will of course continue to monitor the situation as it evolves across Europe. Our goal is to continue to provide medicines to those most in need,” Steckler said.

Philip Schetter, managing director of Aurora Europe and Germany told MJBizDaily that the company has product in stock in Germany for patients throughout Europe as long as “the supply chains to pharmacies do not break down.”

Like many other companies, Bedrocan, Canopy and Aurora restricted business travel globally and asked employees who can work from home to do so.

German importers

Some leading German importers and distributors of medical cannabis told Marijuana Business Daily they do not expect disruptions in the near term.

But, like every other business in Europe, they are monitoring closely how the situation evolves.

David Henn, CEO of Cannamedical in Cologne, said his company “carefully built its supply chain with strong international partners on three continents to outbalance potential interruptions long before COVID-19.”

“The current situation strengthens our course to not integrate Cannamedical into any supplier … differentiating from importers that are fully Canada dependent,” he said.

Henn said medical cannabis freight is typically loaded into regular passenger planes, so cancellations will impact all industries.

“However, we have the ability to use temperature-controlled charter flights if required to stabilize our supply chain,” he said.

“Cannamedical has built inventories in advance that allows us to outbalance potential delays or shortfalls,” Henn noted, adding that “conservatively managed and built inventories stored in Germany will allow us to deliver continuously to pharmacies and medical cannabis patients in need.”

Henn said Cannamedical has four to five months of inventory to meet demand.

Jakob Sons, co-founder and CEO of Cansativa in the Frankfurt Rhine-Main region, said “shipments are scheduled as usual,” but he is preparing for different scenarios.

Restrictive measures taken by governments could slow shipments.

However, Sons expects “that anybody who is fundamental to the supply chain (already) initiated countermeasures and emergency plans.”

In the case of Cansativa, the company has “strict emergency procedures to guarantee its warehouse stays up and running.”

These measures include a “no-visitor policy, no business meetings, home-office policy for administrative personnel, et al,” Sons said.

Linus Weber, founder and CEO of Nimbus Health in Frankfurt, said government authorities have not informed the company “about any issues that will delay delivery into Germany.”

He doesn’t expect any major concerns with pharmaceutical cargo shipments.

Weber said his company “can serve our partner pharmacies” and they “will not face any shortages.”

Fabian Friede, managing director of Sanatio Pharma in Berlin, also said his company currently has “enough product in stock to supply all our customers, and there’s no indication of any supply shortages.”

And Katrin Eckmans, CEO of Farmako in Frankfurt, expects “regular shipments to be delivered in the next months.”

Slower approval?

Some officials of importers who spoke with Marijuana Business Daily are worried about possible delays in approving new suppliers, as this will unlikely be a priority for health officials in times of coronavirus emergency.

Eckmans mentioned the current lockdown in Spain and likely imminent lockdown in Portugal as challenges to get new suppliers of medical cannabis approved to ship to Germany from that region.

“In general, authorities have been quite busy with cannabis approvals in the last months,” she said. “Now, with the corona situation, approvals regarding cannabis might pile on their desks.

“But it is important that authorities work together with the wholesaler and suppliers – there are so many high-quality suppliers in Europe in their starting blocks to contribute to the continuous and sustainable medical cannabis supply.”

Sons said that “anything that is not relevant to everyday health care will be deprioritized by authorities.”

He believes it’s possible “that authorities would postpone a cannabis supplier inspection” to prioritize other more urgent tasks, but he’s not aware of any specific case in which this has occurred.

Alfredo Pascual can be reached at [email protected]

For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.

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