There has been a lot of talk about the Cannabis Market crash, the result of the fact that both federally and provincially, red tape on retail has not kept up with production output. Eve & Co., a producer in Southern Ontario, is one of the few companies that are poised to take advantage of export opportunities at a time that every cannabis producer needs to be thinking about it.
Eve & Co. is Canada’s first female founded licensed producer of medicinal marijuana and received its cultivation license from Health Canada in 2016. Since international markets for Cannabis products and CBD are far more lucrative than in Canada, Eve & Co. continues to sign agreements with Germany. The company has recently entered into a third binding, non-exclusive supply agreement for the sale of dried cannabis to a German importer and distributor.
Having established three supply agreements with Germany. The total represents a minimum of 119,000kg over the next 2 years (shipping to start early 2020) with a total value of $416 million (assuming a wholesale price of $3.50).
Most CBD cultivators and producers in Canada are not only focusing on the Canadian market but also deploying some assets overseas. Considering how things have unraveled in the Canadian market in recent months, Eve & Co's strategy makes more sense in hindsight.
The German market, has been touted as one of the largest cannabis markets outside North America. Eve & Co. hopes that cannabis laws will become less restrictive throughout Europe, which will allow it to expand similarly into more markets.
Canada has a 20-year head start on the United States in growing and processing hemp. It has allowed commercial hemp production since 1998, and within two decades, has established itself as a world leader in the production of food products as well as agricultural seed for planting, according to a study.
Canada legalized production in 1998 and since then has produced hemp primarily for nonviable hempseed used in food products. The industry has grown rather slowly over the past 20 years as producers worked through agronomic issues and a limited number of processors developed hemp products and markets.
But in 2018, Canada’s acreage shrank as the nation lagged behind its southern neighbour in developing a market for hemp extracts such as CBD, according to a new report from the U.S. Department of Agriculture (USDA) that highlights Canada’s industrial hemp industry. More than 70% of the country’s 5,400 metric tons of hempseed exports last year went to the U.S., with the remainder being sent to European Union-member countries and South Korea.