North American Companies Look South for the Next Big Cannabinoid Markets

Target countries in South America are becoming increasingly important markets for cannabidiol (CBD) with a major deal to distribute medical cannabis products in Brazil.

A change in Brazilian regulatory policy has further opened up trade and two new export agreements have been signed to cultivate a South American supply for the lucrative US market.

There is no longer a list of registered products from which prescriptions for individuals must be filled. Instead, the Brazilian Health Regulatory Agency (ANVISA) has told CBD-Intel that prescriptions must be for a specific, identifiable product but that it is up to the prescriber to decide what that product should be.

“The prescription needs to be specific to a product and its brand, not the opposite; the imported product must be the same as prescribed by the doctor,” an ANVISA spokesperson said. “When it is mentioned that it needs to contain an identifiable product, it is because there are prescriptions with products with imprecise identification, or that refer to products from which no information can be found.”

Previously there were two independent processes. Individual patients could import prescribed products from a registered list or get their prescriptions fulfilled at a domestic pharmacy.

Canadian cannabis firm Khiron has taken advantage of this change by signing a deal to work with the Brazilian medical firm Medlive, which controls a network of more than 3,000 doctors’ offices, clinics, hospitals, and government institutions.[1]

The deal means that Medlive’s network of physicians–who are in a position to write the product-specific prescriptions required–will receive medical education and training related to Khiron’s products.

“Brazil represents one of the most important markets in Latin America, with its massive population and its acceptance of medical cannabis,” said Khiron CEO Alvaro Torres. “Together with Medlive, we are now positioned to begin educating health professionals and driving prescriptions for our medical cannabis products, and ultimately focus on our objective to help patients in Brazil who can benefit from medical cannabis.”[1]

Adriana Marques, managing director of Medlive, added, “With the rapid globalization of legalized medical cannabis, including here in Brazil, there is an important need to bring product education and information to the country’s health professionals.”[1]

Khiron’s latest agreement follows an announcement on March 20 that it had become the first and, so far, only company to receive full authorization to manufacture high and low delta-9-tetrahydrocannabinol (THC) medical cannabis in Colombia and to fill prescriptions for low-THC medical cannabis.[2] It has also received authorization from the Colombian Technical Quotas Group to sell high-THC cannabis for medical use for domestic and export purposes, including to Uruguay.[3]

Khiron may have achieved a significant competitive advantage with these deals, but it recorded a net loss for 2019 of $36.4 million, compared with a net loss of $19.8 million in 2018. Yet Torres remains optimistic.

“2019 was a building year for Khiron,” he said. “Now the focus of the company turns to sales execution and revenue generation. We have much work to do in the months ahead but are positioned to benefit from these significant achievements.”

Torres was also optimistic that Khiron would rise to the challenges presented by COVID-19.

“We recognize the unprecedented global health and economic pressures caused by the pandemic and have acted swiftly, aligning our expenditures, and leveraging our digital capabilities and staff medical teams to give patients access to telemedicine consultations and remote product delivery,” he said.

However, the pandemic has taken a harsher toll on others in the industry and halted the plans of Colombian hemp firm Sannabis to export its product to the US market.

Sannabis was an early recipient of permission from the US Department of Agriculture (USDA) to export hemp to the US. Announcing the permit in January, Sannabis president John Campo said, “I believe it is an important step to be able to import the seeds, the roots, the stems, the leaves–everything–into the US, and we’re kind of establishing relationships right now.”[4]

The firm started growing the US-bound hemp in Uruguay in the month the agreement was announced. However, it has yet to ship any product to the US because the global pandemic has slowed ground and air transportation, as well as the final certification Sannabis needs from the Uruguayan authorities. Campo said he was not sure when exports could begin.

Currently the Sannabis hemp farm has nearly 27 acres to plant, with room to grow cannabis under contract for interested companies. Campo said the plan is to form a “joint venture with a company in the US or anywhere in the world” that wants hemp or cannabis cultivars from Uruguay, where the hemp is grown.[4]

Campo also said his company had applied to register some 150 cannabis cultivars in Colombia and was awaiting approval.

Sannabis still faces some regulatory hurdles in Uruguay, though. Campo said he had hired a lawyer to get a special export permit from the Uruguayan Ministry of Health. The company also still needs a phytosanitary report for the health of the hemp plants, in a process that has been delayed by COVID-19 disruptions.

Campo remains confident, however, that the Uruguayan operation could establish a foothold in the US, selling plants that meet the country’s THC limits of 0.3% for legal imports.

“North American hemp and medical cannabis companies are looking to build relationships in South America; we have a strong foothold and make ideal partners,” he said.[4]

 Image Credit: Tee Farm

 Image Source: https://hempindustrydaily.com/colombia-companys-hemp-exports-to-u-s-stalled-amid-pandemic-delays/

Original Article: https://www.cbd-intel.com/brazils-rule-change-is-just-what-the-doctor-ordered-for-canadian-company/

References

  1. PR Newswire. “Khiron Signs Exclusive Agreement with Medlive, a Distributor Serving 3,000 Clinics and Hospitals in Brazil.” Available at: https://www.prnewswire.com/news-releases/khiron-signs-exclusive-agreement-with-medlive-a-distributor-serving-3-000-clinics-and-hospitals-in-brazil-301050475.html Accessed June 29, 2020.
  2. PR Newswire. “Khiron Readies for First Medical Sales in Colombia and Provides Corporate Update.” Available at: https://www.prnewswire.com/news-releases/khiron-readies-for-first-medical-sales-in-colombia-and-provides-corporate-update-301027474.html Accessed June 29, 2020.
  3. PR Newswire. “Khiron is First Company Authorized to Extract High THC Medical Cannabis in Colombia.” Available at: https://www.prnewswire.com/news-releases/khiron-is-first-company-authorized-to-extract-high-thc-medical-cannabis-in-colombia-301014102.html Accessed June 29, 2020.
  4. Hemp Industry Daily. “Colombian Company’s Hemp Exports to US Stalled Amid Pandemic Delays.” Available at: https://hempindustrydaily.com/colombia-companys-hemp-exports-to-u-s-stalled-amid-pandemic-delays/ Accessed June 29, 2020.

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