Marijuana Business Magazine - February 2018

expanding an existing production facil- ity or breaking ground on a new one in Canada or overseas. Otherwise, you may be forced to redesign your facility. “We consciously designed our facilities in Canada from the ground up to be GMP compliant. Regulatory compliance comes first and is the start- ing point – without compromise,” said Cam Battley, executive vice president of Alberta-based Aurora Cannabis. 4. Get the right work permits for your employees Getting advice from international immigration attorneys on visa issues also is important, particularly when it comes to the cannabis industry. For example, even if the U.S. Citizen- ship and Immigration Services approves a work visa for an overseas citizen, the U.S. Customs and Border Protection (CBP) has the final say on whether that person can be admitted into the United States. Suzanne Sukkar and Christian S. Allen, attorneys with Toronto-based Dickinson Wright, noted that the customs and bor- der agency may deem overseas MJ labor to be a form of “drug trafficking” and bar prospective executives and employees from entry.That’s because marijuana is on the U.S. Drug Enforcement Administra- tion’s list of controlled substances. “Inadmissibility applies to anyone who ‘has been a knowing aider, abettor, assister, WHY A $16 MILLION DEALWAS NIXED M ike Gorenstein, CEO of Cronos Group, explains why his medical marijuana production company took a pass on a German acqui- sition in 2017 The opportunity: “We had a relationship with a distributor in Ger- many and had conversations with them, so we knew that they were looking to be acquired.” The price tag: $16 million (CA$20 million-plus) What was attractive: “The company had five employees and a warehouse lease. Very smart, savvy guys. As far as having someone manage an operation, they’re great. We liked them as businessmen but also personally, which I think is important.” Why it didn’t fly: “To pay CA$20 million for a distribution license when there’s no special (intellectual property), you either have to believe there’s never going to be another distribution license issued, or that you can’t build it yourself. My view was that there would be multiple distribution licenses issued in Germany – an almost unlimited amount. So we didn’t think the value was there. “There’s such a supply shortage in Germany that distribution cur- rently isn’t that difficult. If you have product and a license, it will sell. You need to have a Good Manufacturing Practice (GMP) certification from Germany in order to import product, and in Canada we’re one of two that have that. “So for me, if you have the supply and the GMP certificate, the dis- tribution is easy. Since then, multiple licenses have been issued and now we have our pick of distributors. So rather than spending millions of dollars on an acquisition in Germany, I can work with any distributor or multiple distributors. It validated our decision.” – Matt Lamers Cam Battley, executive vice president of Aurora Cannabis conspirator or colluder with others in the illicit trafficking.’ So it doesn’t matter if the person is selling it or not,” the lawyers told Marijuana Business Magazine. “Involvement in other ways can lead to inadmissibility. Also, there is a ‘reason to believe’ standard that gives CBP a much broader net to cast for involvement in drug trafficking.” The bottom line, the duo added, is to get legal advice – before you think you need it. 5. Be willing to say ‘no’ Saying no to the wrong opportunity is just as important as saying yes to the right one. Successful companies need to spend a lot of time, energy and resources in a new country before pulling the trigger on a final investment decision, execu- tives said. For them, not pulling the trigger is among the best decisions they’ve made. A company might want to pull the trigger only after doing due diligence, consulting legal counsel and spending time generating relationships. A result- ing red flag may well be cause for pause. “Most times, no is just as important as yes. You need to be willing to say no. A mentor keeps two lists: A list of things to do, and a list of things that are too hard. And so some of the countries we looked at, it was just too hard,” said Tilray’s Kennedy. “You need to be will- ing to pull the cord and say, ‘We’re not doing this.”’ ◆ February 2018 • Marijuana Business Magazine • 71