Think of Canada as the pioneer of the global cannabis industry, the test market for government-licensed legal marijuana. Countries the world over are watching the Canadian experiment with interest as the wave of cannabis legalization, initially in the form of medical cannabis programs, builds momentum around the globe. European and South American countries seem to be leading the charge, but many of them don’t have the production and cultivation infrastructure in place to serve their nascent markets.
Some Canadian companies, like Valens GroWorks Corp. (CSE: VGW), are looking far beyond Canada’s 36 million potential customers to the exponentially larger opportunities in the global market. A key component of the company’s international plan is to build and utilize facilities that comply with the European Union’s Good Manufacturing Practices (GMP) standards, currently the most stringent regulations in the world. ‘EudraLex’ is the term for these rules and regulations governing medicinal products, and compliance with EudraLex is the key to unlocking the global export potential of Canadian cannabis products.
Facilities and Certifications
Valens runs a laboratory that holds a dealers license called Supra THC Services. Supra recently became the first cannabis-focused, licensed Canadian lab to achieve ISO 17025 accreditation for cannabis testing. This standard allows the lab’s test reports and certificates to be accepted internationally, validating the company’s testing results and processes for international trade. Supra is partnered with $90+ billion ThermoFisher Scientific to create a Centre of Excellence for Plant Based Medicine Analytics in its lab.
Supra recently moved into a second Valens subsidiary’s facility, Valens AgriTech. Valens AgriTech also holds a dealers license. With Supra more focused on testing and analytics, Valens AgriTech handles cannabis cultivation, processing, oil production, and sales of oils through licensed producers. AgriTech is also in the late stages of its application to become a licensed producer. The AgriTech campus is in the process of becoming Eudralex GMP certified, the importance of which has been noted above.
The third Valens subsidiary, Valens Farms, is a joint venture with a real estate development company, in the process of constructing a 400,000 square foot greenhouse cultivation and production facility. The company expects to plant the first crop by the end of 2018, and the cannabis produced there will provide the raw material for the state-of-the-art extraction and production at the Valens AgriTech site. This greenhouse is being built from the ground up to EudraLex standards, ensuring the company’s ability to export products around the world once all of the proper licenses and certifications have been achieved. Valens Farms also has the option to build another 400,000 sf greenhouse at the site should the need arise.
The International Opportunity
Germany is home to about 83 million people, more than twice the population of Canada. It is also home to a medical marijuana program, covered by national health insurance, that is just getting off the ground. The country has experienced hiccups in permitting its own cultivation, and companies from Canada and the Netherlands are swooping in to satisfy soaring demand.
Italy, with a population of about 60 million, adopted a medical program in 2013. Strangely, the cultivation of cannabis there remains illegal, though the country recently introduced regulations allowing for some hemp cultivation. The Italian army is responsible for the country’s legal medical production capacity, totaling 220 pounds of output for the entire country in 2017. Supply and demand forces there will likely force change. Norway, Greece, Poland, Switzerland, even the United Kingdom have very recently implemented, or are in the process of implementing, some form of legal medical cannabis. In many places, the focus is on allowing medicines that have very low levels of THC.
South America is another leading market for cannabis and cannabis-derived products. In 2014, Uruguay became the first country in the world to fully legalize, though the rollout has come in fits and starts. Medical cannabis programs were established by Chile in 2014, Colombia in 2015, and Peru in 2017. Brazil has allowed the use of certain medicines for a few indications, and some provinces in Argentina allow for medicinal use.
The Valens Plan
Multi-subsidiary, multi-licensed Valens GroWorks is creating a vertically integrated, quality controlled, interdependent and complementary company that is primed to launch into lucrative international markets. Utilizing its scientific approach and certified commitment to strict quality standards throughout its processes, the company stands ready to provide cannabis and cannabis-derived products to emerging markets that employ even the most stringent regulations. Valens plans to take advantage of its experience in the world’s most mature cannabis market, Canada, parlaying that experience into market opportunities that dwarf those in its own country. Stay tuned.
Disclaimer
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FULL DISCLOSURE: Valens GroWorks Corp. is a paid client of Stockhouse Publishing.