Marijuana Business Magazine - May-June 2018

“Try to think of regulators as partners that share your inter- est in building a successful industry. Regulators allow us to do business – they don’t stop us from doing business,” said Mike Gorenstein, CEO of Ontario-based Cronos Group. For nearly every country the company has entered – includ- ing Canada – Cronos executives have spoken directly with regu- lators. Cronos prefers to “ask permission rather than apologize,” he said. “Cannabis regulation is new to everyone, and I’ve found that regulators usually are happy to talk through issues and learn how things are dealt with in other markets,”Gorenstein added. 3. Influence the Regulations As more countries legalize medical cannabis, their regulations to support the industry are often incomplete. “You can save regulators a lot of work by bringing strong examples of regulatory frameworks that have been successful in other countries,”Gorenstein said. Aurora Cannabis CEO Terry Booth said governments like to be shown what to do, rather than being asked. You can use your relationship with regulators and politicians to influence change, he said, as Vancouver-based Aurora did in Australia early on. “We provided them with some regulations and operating procedures that would lessen that (regulatory) burden and be more effective, certainly quicker, in getting producers author- ized,”Booth said. Aurora​​hire​s​government relations people​to ​educate and promote from within. ​“​We’ve used ​(lobbying) ​firms before, but they don’t have cannabis knowledge​,”Booth said, which makes them less effective. ​ And keep the higher echelon involved, he noted. “You have to treat them with respect. You don’t send in your minions when you’re going to meet the minister of health.​” 4. Vet Your Partners Finding the right partners is a must when entering a new market. Eric Paul, CEO of Ontario-based CannTrust, looks for partners who have backgrounds in pharma or distribution and financial acumen. Those kinds of people are more likely to know the ins and outs of the local regulatory requirements, have political connections and understand operational rules, he said. “You do thorough due diligence on who they are,”Paul said. That includes: • Confirming their track record in the local business community. • Ensuring they have the financial, quality control and opera- tional capabilities to support the business plan. • Doing full background checks, including references. • Making sure you can work together on a personal level. • Confirming they have the expertise to absorb what you’re going to give them. “Every place has its unique business proposition, and picking the right partners who understand that will help make you suc- cessful,”Paul said. “Could we go it alone? Yes we could.Would we be as successful? Probably not.” 5. Sign up a Local Law Firm Connecting with a local law firm will help you interpret local regulations and understand local customs, according to Greg Engel, CEO of Organigram. It was essential for the company’s planned expansion into the European Union. Engel said identifying local counsel for Organigram begins with a referral from the global accounting firm Deloitte. ​Next, ​the company looks to check these boxes: • ​Is the firm active in the health care sector? • Does it understand international trade? • Do the firm’s lawyers have regulatory expertise in the health sector? It's important not to assume that business overseas is con- ducted in a manner similar to your home jurisdiction, Cronos’ Gorenstein said. “Local counsel helps bridge that gap,” he said. “For exam- ple, in Germany, cannabis is treated more like a pharmaceuti- cal and goes through traditional pharmaceutical channels [pharmacies]. So it’s important not just to understand the cannabis specific regulations, but to understand the German pharmaceutical regulations.” Eric Paul, CEO, CannTrust Greg Engel, CEO, Organigram Terry Booth, CEO, Aurora Cannabis GOING GL BAL May-June 2018 • Marijuana Business Magazine • 77