Could cannabis, Canada’s newest growth industry, evolve into one the nation’s top exports in the future?
Nanaimo cannabis producer Tilray is banking on it. The company, which already provides medical marijuana for thousands of patients across Canada, made exporting history in June with the first-ever shipment of medical cannabis products from North America to the European Union. The product went to a client in Croatia, which legalized the medical use of the drug in 2015.
In May, Tilray also received approval from Australia’s Therapeutic Goods Administration and the Queensland Department of Health to begin supplying a patient in Australia with medical cannabis via a federally administered Special Access Scheme. Tilray now plans to serve additional Australian patients in the future.
“Cannabis is a rapidly developing industry around the world,” says Brendan Kennedy, Tilray president. “We see enormous opportunity to expand distribution of our products globally. Right now, we are in the process of exporting Canadian products to Australia and Germany. We see additional export opportunities on the immediate horizon elsewhere in Europe as well as in Latin America.”
According to Health Canada, there are 33 licensed producers in Canada, the majority of them in Ontario, followed by BC, which service a growing patient list of approximately 54,000 as of March 31. That’s up from 24,000 in June of last year. Dundee Capital currently pegs the overall market value between $80 million to $90 million, with an estimate to reach $1.2 billion by 2024.
However, that’s just the domestic outlook. Kennedy estimates the global opportunity to be much more lucrative.
“We estimate that medical cannabis will be a $100-billion total global opportunity in the next several decades,” he says. “Medical cannabis has the potential to be a meaningful contributor to Canada’s biotech and life sciences sectors, both domestically and internationally.”
Kennedy says Tilray’s export journey started “day one” when Health Canada approached the company to make an investment in the country’s emerging medical cannabis sector after the federal government adopted the Marihuana for Medical Purposes Regulations (MMRP) in 2013.
Today, the company supplies thousands of Canadian patients with medical cannabis products including whole flower, milled blends and extracts. It is starting to bolster its exports to researchers, patients and pharmacies in the EU and Australia.
In February, Tilray announced a groundbreaking research partnership with the New South Wales government, University of Sydney and Chris O’Brien Lifehouse hospital to study the effects of cannabis-derived medicines in treating chemotherapy-induced nausea and vomiting. The study will use medical cannabis capsules developed and provided by Tilray.
Tilray has grown to 120 employees working in five different countries. Outside Canada, the team is focused primarily on marketing and business development in Europe, Latin America, Australia and the US.
At its core, the firm produces more than 50 cannabis strains – the largest selection of any Canadian producer – at its state-of-the-art $26-million 60,000-square-feet facility, which according to Kennedy, “looks more like a semi-conductor or pharmaceutical production centre than an agricultural operation.”
The quality and design of the facility reflects Tilray’s commitment to producing pharmaceutical-grade, GMP-certified medical cannabis.
Part of the industry’s future global growth potential is a result of Canada being a trailblazer in its approach to medical cannabis. As the first G7 nation to adopt a federal-run program, other countries are looking at Canada as a best-practice model as they embark on creating their own regulated industries. Canada’s policy initiative has provided firms like Tilray with a competitive advantage globally.
“Attitudes and laws toward medical cannabis are changing rapidly throughout the Americas and across Europe,” explains Kennedy. “Right now, our biggest market is Canada, but as countries change their approach to medical cannabis, we see an enormous opportunity to leverage the first-mover advantage Tilray has built as a company and Canada has built as a country.”
For Tilray, becoming an industry pioneer has taken both perseverance and determination combined with innovation.
“We are operating on a regulatory and scientific frontier,” says Kennedy. “Exporting cannabis products to Europe has never been done before. While exciting and rewarding, it’s tremendously challenging because we are operating in an environment with a lot of unknowns, so we’ve had to think and act outside the box and pursue our objectives from multiple angles.”
One of those angles is learning how to be flexible, not to mention realizing that the shortest distance between two points isn’t always a straight line.
“The biggest lesson we’ve learned so far is plan for the unknown,” adds Kennedy. “As we seek to scale our business globally, we need to be ready to adapt. Unknown variables define your operating environment. Exporting our first shipment is a first step that I’m enormously proud of, but there’s a long road ahead.”
For Tilray, navigating the road to global success means being very strategic as well as being disciplined, says Kennedy, especially in an industry as complex and rapidly changing as cannabis where compliance is of the upmost importance. But the lessons he has learned are applicable to businesses of all types.
“When you start looking at tapping global markets the opportunities are vast and exciting, but every opportunity is unique,” he adds. “Don’t be afraid to spend extra time and resources assessing the different opportunities available before diving into a new market. You have to be diligent about only pursuing opportunities that make sense for the long-term health of your business.”
Looking forward, Tilray wants to be the global standard in the medical cannabis industry and Kennedy thinks the company has built a solid foundation to achieve that goal.
“Most people who work in the industry aren’t thinking about cannabis from a global perspective like we are,” he says. “There are huge barriers to having a cannabis company that operates in multiple cities, let alone provinces states or countries. Thinking globally is the first step to operating globally so that’s been key to our success. We are building Tilray into the world’s most trusted and admired medical cannabis brand.”