With 19 states legalizing marijuana for medical purposes and another two approving it for recreational use, most US cannabis businesses are content to focus on the sizable domestic market.
But there are a growing number of international business opportunities for certain types of marijuana companies.
A handful of countries are loosening their policies surrounding marijuana or expanding their existing MMJ programs, while some have legalized various forms of the drug or are considering doing so.
To be sure, it’s tough for US cannabis companies to crack the international market given the complex regulatory structure in each country. And it might take some time for opportunities to fully develop. But US companies that provide ancillary products and services – such those focused on consulting, equipment, technology and even sprays, topicals and compounds – might be able to carve out a niche abroad. And some, such as Medical Marijuana Inc. and partner firm Dixie Elixirs, already are doing just that.
At the very least, it’s worth keeping an eye on the international situation as more nations adopt cannabis-friendly laws.
Here are some recent marijuana developments on the international stage:
Czech Republic – Earlier this year, the Czech Republic legalized marijuana for medical use and began setting up a system to cultivate and distribute the drug to patients with cancer, Parkinson’s, multiple sclerosis or psoriasis. Pharmacies began selling cannabis to registered patients in April. Private cultivation is technically still banned, but individuals with up to five plants face only a small fine, which could lead to a thriving home-grow community. The country is initially importing the drug from other countries – reportedly the Netherlands and Israel, not the US – as it sets up regulations and rules for commercial cultivation by licensed growers. There could be some opportunities for US companies focused on support products, services and technology for dispensaries, home growers and patients. Consultants and individual experts who can advise on cultivation methods, security, inventory tracking, etc. also might be able to get involved.
Canada – Canada is in the process of overhauling its medical marijuana program , mainly by shifting cultivation from the government and home grows to a network of licensed producers that will also distribute cannabis to patients via a secure delivery service. This will create havoc in the Canadian MMJ business community, hurting companies that provide hydroponics products to home growers. It’s unclear what will happen to existing dispensaries: Many will likely apply for a license, but some might not qualify and will therefore have to close (under the new rules license will have to handle the entire seed-to-sale process). Still, scores of new providers could sprout up.
This could open the door for cultivation-related companies – such as those that provide lights, grow systems, security products and inventory management software – that can sell to companies that win licenses.
“Without question there are opportunities for American businesses from a supply chain point of view – equipment, nutrients, all kinds of things,” said Scott Walker, CEO of Nature’s Own Rx, which grows cannabis for patients under the current system and is applying for a license to operate under the new regulations. “We’ll have hundreds or even more than a thousand producers in this country. From a business perspective, the companies that offer the picks and shovels for this gold rush should be looking at Canada. We will need a variety of products (if we get a license), and we’ll probably get some that are produced in the United States.”
France – Long known for strict policies on cannabis, France shifted gears this month and changed its health code to legalize marijuana-based medicine. The exact impact is still unclear, and it’s very vague at this point what exactly will be allowed. The main immediate beneficiary will likely be a British company that markets a product called Sativex, a marijuana extract that delivers pain relief without the cannabis “high.” But it could open the door for similar infused products and extracts as well as ancillary MMJ offerings. Some observers say that the change could even pave the way for the cultivation, sale and use of raw marijuana, which would create a whole host of business opportunities.
Mexico – An effort is underway in the country’s capital, Mexico City, to legalize marijuana for medical – and potentially recreational – use. Legislators plan to introduce a bill this fall that would allow patients to grow marijuana and smoke it at home or at designated clubs. Support for more liberal cannabis rules is gaining steam, and even former President Vicente Fox is on board. This would be a watershed development in a country that has taken a tough stance against cannabis as it battles powerful drug cartels that move mass amounts of marijuana to the US. As in other countries, there could be opportunities for US companies focused on small-scale cultivation and products for patients such as vaporizers.
Other European countries – including Italy – are moving in the same direction, while Israel is in the process of expanding its program.
As medical marijuana continues to gain traction globally, expect to see the rise of large international US-based cannabis companies.