Canadian Exports of Medical Cannabis Oil Jumped Fivefold in 2019

Article by Matt Lamers, Growth Op

Canadian exports of medical cannabis oil jumped fivefold in 2019 Published 12 hours ago | By Matt Lamers

Canadian-produced medical cannabis oil reached more international shores than ever last year as businesses look to leverage their first-mover advantage in new overseas markets.

According to data Health Canada provided to Marijuana Business Daily, cannabis oil products were approved for export to at least 17 countries for medical and scientific purposes in 2019.

However, the bulk of the exports involved a few countries, showing that commercializing medical cannabis exports, in large quantities, remains much easier said than done.

Australia was the top destination, with roughly 3,700 liters (977 gallons) shipped there in 2019.

Germany and Denmark were second and third, with 790 liters and 336 liters, respectively.

Those top three markets accounted for 90% of all exported oil.

The remaining 546 liters were shipped to 10 or more countries.

Overall, 5,372.3 liters of cannabis oil products were exported for medical and scientific use in 2019.

That’s almost five times more than the 920 liters exported from Canada in 2018. Roughly 435 liters left Canada via federal approval in 2017.

Health Canada approved about 12,887.86 liters of cannabis oil products for export last year – about half the amount actually shipped.

That doesn’t necessarily mean the remainder has not been exported, as there is always a lag between the issuance of an export permit and when the export occurs.

Also, a company’s changing business condition means some permits might never be used, Health Canada said.

Oil advantage

The growth in cannabis oil exports continued to outpace the growth of dried cannabis exports.

The 5,372.3 liters of cannabis oil exported exceeded the 3,740 kilograms (8,245 pounds) of dried cannabis that left Canada in 2019.

Dried flower rose 160% over 2018’s exports, whereas oil exports jumped almost fivefold over the same period.

The 5,372.3 liters of cannabis oil is equivalent to about 4,996 kilograms of cannabis. (Most licensed producers convert 1 liter as 0.93 kilograms of cannabis, according to Health Canada).

That means exports amounted to about 8,736 kilograms in 2019.

Sarah Seale, CEO of Toronto-based Seale & Garland Consulting, said medical cannabis oil is “more readily used in medical products,” making it more sought-after overseas.

“There’s a wider market, a higher price point and it is a little bit easier to import and export it when you’re dealing with oil,” she said.

Seale is also partner at Cannabis Global Consultants.

Countries such as Australia, Colombia, Jamaica and Portugal are gearing up to jump into the export market.

But Seale sees Canadian companies continuing to enjoy their advantage if they play their cards right.

“Anybody looking to export now is going to be looking at paths that are already open. Canada has the opportunity of looking at the paths that aren’t open yet and making provisions to be the first one in the door in those markets as well,” she said.

Sherry Boodram, CEO and co-founder of Toronto-based regulatory consulting firm CannDelta, said some countries that recently legalized medical cannabis are looking to meet demand via imports until domestic production is up and running.

“A lot of countries don’t have provisions in place to produce dried flower and oil products, so they’re going to look to other countries to be able to obtain those product formats,” she said.

“Oil is becoming more appealing to other countries, because from a medicinal perspective, people don’t always want to inhale dried cannabis.”

International issues

Canadian companies exported 9,396 kilograms equivalent of dried cannabis and oil for medical and scientific use in 2019.

That’s a notable increase over the previous year’s 2,320 kilograms equivalent exported.

However, Canadian businesses have thus far failed to convert exports into important sources of revenue on their balance sheets.

In fact, most large Canadian companies have reported stale international revenue over the past six months.

Some are even cutting their losses overseas, as international markets develop at a much slower pace than their CEOs had forecast.

Aurora Cannabis ceased construction at a large second-phase facility in Denmark, which was geared toward the export market, in an effort to conserve cash.

Aurora, based in Alberta, has reported only marginal revenue outside North America.

Read the full article here.

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