Cronos Unveils Next Part of Its Asia if not Global Cannabis Strategy


Marguerite Arnold

February 21st, 2018

Policy


With eyes on Europe right now as new announcements and deals were announced almost weekly during the first six weeks of the year, it is clear that the EU is not the only centre of all things international and cannabinoid related.

Australian development, pumped in part also by the money and expertise of the largest Canadian firms, is also proceeding apace.

In the first week of February, as the world suddenly realized that the Italian military were getting out of the pot producing business, Cronos Group unveiled a massive Australian joint venture with Australian company NewSouthern Capital Pty Ltd to launch Cronos Australia Pty Ltd. The group has just announced the first phase of an AUS$10 million (USD$8 million) production facility to meet demand in both Australia and other parts of Asia.

It is a prescient move indeed, coming just weeks before Benjamin Netanyahu put Israel’s about-to-be approved export plans on ice after a request from Donald Trump. In fact, Australian cannabis firms and the Canadians they are partnering with, appear to be the immediate beneficiary of this latest anti-cannabis salvo from the White House. Cronos specifically, had just established as of September 2017, a strategic joint venture with Kibbutz Gan Shmuel in Israel for the production of cannabis and its export to 35 countries and other parts of Asia.

The Evolving Cannabinoid Export Market Map

Australia is going to be a critical launching point for the Southern Hemispheric cannabis revolution. Not to mention a valuable source of raw product for firms participating in the global one. The country represents a large, domestic, English-speaking audience, but producers Down Under are not shy about their aspirations internationally.

That starts with the rest of Asia. With Israel out of the picture on this front, it sets up Canadian-Australian partnerships of the kind that are now forming in fact, to establish a lock-up on international distribution relationships for whole countries.

A look at who else has blazed a path in Australia recently, only bears this out. The largest Canadian LPs, including Canopy and Aurora, have also entered the market via similar partnerships.

However, it does not stop there. It is clear that as much as Canadians are leapfrogging into the country, these Australian firms are right in the thick of Euro action, back into (particularly) Germany and Eastern Europe.

Cronos, in fact, made news last fall by entering into a distribution deal in Germany that puts its product in over 12,000 pharmacies around the country.

There is a clear connection to what is going on in Australia, Canada and Germany, right now, in other words, and Cronos is right in the middle of it.

The Race To Source Cheap, Abundant, High Quality Crops

As the ongoing drama about exports in Israel demonstrate, those firms and countries who position themselves in the evolving medical marijuana source game – globally – will be able to lock up world-wide distribution rights for at least the next generation. If not hold a monopoly position in the most valuable cannabis markets as they transition, inevitably, to recreational use.

In the meantime, however, it means that a handful of firms (less than 10), all with Canadian roots or connections, can now source the cheapest cannabis on the planet, from all the major centres of production now in existence or about to be in construction.

For Canadians, Danes, Australians and Germans (among a few others), this means that medical crops will come from home first. But in the face of lagging production, or even shortages, cheaper markets will inevitably begin to supply, where it is cost efficient, some qualities of oil, extract and actual pharmacized cannabinoids to such western and more wealthy markets.

So what does this newest announcement really say about Cronos? It is a firm indisputably in the global club of major cannabis producers. And it is beyond doubt that Australian grown cannabis may well end up (at least) in a pharmacy near you.

About Marguerite Arnold



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