How Australian Cannabis Brands Can Enter Europe

Cannabis has long been trending as a global product, providing regional players opportunities to reach outside their home countries and expand to international markets. Australia has fantastic cannabis growers, producers, brands, and clinics, and those companies looking to stretch across the seas can follow a few easy steps to ensure success.

Where Can Australian Cannabis Companies Expand To?

One of the first steps in expanding outside of Australia is identifying your company’s target market.

Australian Cannabis Expansion To Asia: Limited Opportunities

If Asia were more open to cannabis, Australians would have a clear geographic advantage in serving those emerging markets. Thailand will likely follow a medical program that may benefit Australian brands and clinic models. There are also markets like South Korea dabbling in CBD. However, Asia as a whole has been slow to embrace cannabis and related businesses.

Exporting Australian Cannabis To Europe: A More Promising Frontier

The most promising overseas cannabis market of today is Germany. The United Kingdom, Switzerland, and Poland could also be excellent testing grounds as more European countries enter the space and follow the templates of early adopters like Germany. In fact, Germany is fast becoming the standard for other European countries looking to develop robust cannabis cultivation and manufacturing industries, as well as internal consumption models. 

Models For Australian Cannabis Expansion Into Other Markets

Whatever your place within the cannabis sphere, there is a global market for your skills. 

Australian Cannabis Cultivators Can Expand With Ease

If you are a cultivator and wish to enter the German market to show off your cannabis flower, you are in luck. Selling flower is relatively easy due to the robust distributor infrastructure. Because flower is mostly commoditized, you don’t need a large sales force to sell flower. In fact, you can sell to Germany, Poland, the UK, and others from the comfort of Australia. 

The Global Cannabis Market Is Primed For Australian Manufacturers

If you are a manufacturer, plenty of groups are looking for white labels. Most European cannabis distributors are using the same white-label companies; it is not uncommon for 15 to 20 brands to use the same manufacturer. Diversity is needed, and new manufacturers would be greatly welcomed. 

Australian cannabis manufacturing brands will need to invest in a local sales staff. Some markets, like Germany, are very competitive and require extensive sales personnel to be successful. It might be prudent to enter newer or smaller markets like the UK, Poland, and Switzerland, where one local representative would suffice. 

Global Cannabis Clinics Provide Opportunity For Australian Companies

The clinic model is sweeping Europe, with establishments in Germany, the UK, Poland, Switzerland, and others. Expanding from Australia should be relatively easy since the overall model is similar; just like in Australia, new patients are more likely to seek out clinics as opposed to general practitioners if they are interested in therapeutic cannabis. Regulatory differences, advertising, and staffing will be your main concerns. 

Good Manufacturing Processes: An Essential Certification For Expansion

The most significant difference between the cannabis industries in Australia and Europe is that all cannabis products entering Europe must conform to pharmaceutical EU-Good Manufacturing Practice (EU-GMP) standards. Many secondary drying and packaging companies can help international cultivators get their certifications: Portugal has the most, and Germany is a close second. 

Be prepared for a long process, especially if you are radiating your product and entering Germany, as a radiation license can take six months — on top of the time it takes to get your product certified. 

All manufacturers must conform to EU-GMP standards from the start of their process. If you are a manufacturer, you will not be able to buy your extract from Canada or South Africa (which comply with Current Good Manufacturing Processes (cGMP) and African compounding GMP regulations, respectively) and make EU-GMP-certified products, even if your facility is EU-GMP accredited. You will need all starting materials except flower to be EU-GMP-certified active pharmaceutical ingredients (APIs). Much of the manufactured product in Australia today is not EU-GMP-certified and, therefore, does not meet the global standards for sale to Europe and many other countries. 

Cannabis Pricing In The Global Market

The European cannabis market is not as competitive as Australia in terms of cannabis pricing. 

Germany is unique in that it has a partially insured market. Flower is mostly uninsured and can range in price from 12-18 euros a gram retail and around 3-6 euros a gram wholesale. Extracts are predominantly insured. A bottle of 10:10 THC:CBD extract can retail for around 225 euros insured and 100 euros not insured, and wholesale for around 125 euros insured and 40 euros not insured. 

Interestingly, for manufactured products like drops and vapes, the uninsured markets of Germany, the UK, Poland, and Australia will sell for around the same price with their local currency. So, as an example, a vape cartridge can sell for around $100, 100 pounds, and 100 euros. Watch your currency conversion as the market progresses and your company expands.

Expansion On The Horizon For Australian Cannabis Companies

As more amazing Australian cannabis groups succeed in their local markets, many will seek growth overseas. Many emerging countries will be thrilled for Australian cannabis know-how to support their local cannabis needs. As you expand, consider geographic advantages and business models, check your GMP status, and enjoy better margins as more countries enter the arena. Australian cannabis products and clinics are strong and will be well received abroad.

Market News and Data brought to you by Benzinga APIs
Posted In: AsiaCannabisEurozoneMarketsGeneralAustraliacannabis industrycontributors
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Cannabis rescheduling seems to be right around the corner

Want to understand what this means for the future of the industry? Hear directly for top executives, investors and policymakers at the 19th Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.