Article by Vanmala Subramaniam, Vice News
In marketing strategy, there’s a term called “first-mover advantage”. It’s when a few key players in a particular industry gain an advantage because they entered into the marketplace first. These companies are able to establish strong brand recognition, shore up the best sources of funding, and build a loyal customer base simply because there aren’t any competitors in the way during their first few years of operation.
When it comes to the market for exporting weed, big Canadian LPs have clearly established a first-mover advantage. There are currently 29 countries that recognize some form of medical cannabis, but only two of those countries — Canada and The Netherlands — export weed for medical use. In fact, the medical marijuana export market is dominated by just four Canadian weed producers: Cronos Group, Canopy Growth Corporation, Aphria, and Tilray.
To some extent, it’s going to be a decades-long upward battle to really capitalize on the global demand for weed, given that the drug is still illegal in most countries. But Canadian marijuana companies are ahead of the curve in terms of making their mark overseas, as they scramble to collaborate with foreign medical marijuana producers and pharmaceutical companies keen on discovering and potentially patenting marijuana-based cures.
The European Experiment
“There’s huge opportunity for us in Germany,” PI Financial Corp. analyst Jason Zandberg told VICE Money. “They provide national health coverage for medical marijuana. That means, the German market could be more than double that of Canada.”
Medical marijuana officially became legal in Germany in March 2017, opening up a whole new market to Canadian LPs. Very little weed is actually farmed in Germany, although the government’s legalization framework includes a big push to cultivate the crop on its own for medicinal use to ensure its quality. Until then, however, the German cannabis industry will still rely entirely on imports.
In order to export weed to Germany, Canadian weed producers need to get approval from their own government and the German government. Late last year, Canopy Growth Corporation, a Unicorn in the weed industry, acquired the German-based pharmaceutical distributor, MedCann GmbH, which had successfully placed Tweed-branded cannabis strains in German pharmacies.
In fact, a month before that, another big Canadian LP, Cronos Group began the global expansion of their brand by shipping its first batch of “premium” medical marijuana to Germany. They currently own a subsidiary, Peace Natural Projects Inc., which signed an agreement with the German-based Pedanios GmbH, a distributor of medical cannabis.