Americans continue to watch Canada’s approach to legalizing marijuana with great interest. Even in New York where only medical marijuana is legal in a very restrictive program, many people turned out to hear Michael Gorenstein, Chief Executive Officer of Canada’s Cronos Group speak.
High NY is a cannabis community group that invited the company to speak to an audience that peppered the CEO with questions. Cronos Group, formerly known as PharmaCann Capital Corp. just received its second Health Canada license to sell medical marijuana for its wholly owned subsidiary In The Zone Produce. The company’s flagship licensed producer is Peace Naturals Project and together the two cover 125 acres of agricultural land and are licensed to produce 2,600 kg of cannabis on an annual basis.
Gorenstein, a former New Yorker, told the crowd that not only do they provide medical marijuana to Canadians, but they also have been supplying their product to German patients. Germany’s parliament voted last week to provide health insurance coverage for patients with an eligible prescription and simplified the prescription process. Under the old program only 1,000 patients were eligible. The new changes are expected to increase the patient population and Cronos is looking forward to capitalizing on that. Cronos is one of only two Canadian licensed producers that are distributing product in Germany.
Cronos is also gearing up for when Canada’s recreational market gets underway with new laws expected this year. The goal is to use the In The Zone Produce to mostly market to the recreational consumer, while Peace Naturals will address the medical market. The New York group had many questions about the genetic assets that the company owns. Most New Yorkers have never entered a dispensary and seen the multiple strains of marijuana represented for sale.
Gorenstein explained to the group that in Canada a producer has to prove where they have gotten their strains. You have to get them from another LP (licensed producer). So you can imagine if you’re in business and one of your competitors says they’re having problems and ask for some of your strains. Good luck, he said. One of the reasons they acquired Peace was the genetic bank. Gorenstein explained that several home growers sent their best strains to Peace for safekeeping while they pursued getting a license. When many of these applicants didn’t get a license, Peace ended up acquiring them.
Another difference between the Canadian market and the American market is the lack of storefronts. Canadians send all marijuana through the mail. They believe it is easier to track a purchase from prescription to patient if it is attached to a piece of mail that can be tracked to an address. While some storefronts have opened, they are considered to be outside the law.
The company has a $220 million market cap and is publicly traded on the Toronto Exchange. In addition to the wholly own companies mentioned, Cronos owns 21.5% of Whistler Medical Marijuana Company, which can produce as much as 500 kg a year and sells higher priced premium product. They have smaller strategic investments in medical marijuana companies Abcann and Hydropothecary. They also have an arrangement to purchase up to 25% in Evergreen Medical Supply.
HighNY sponsors events each month and February’s guest will be Jeanne Sullivan, Co-founder of StarVest Partners. StarVest is one of the largest women-owned venture capital funds in the U.S. and has over $400 million in assets under management. Sullivan has shifted her focus from tech companies to cannabis companies.
News Moderator: Katelyn Baker
Full Article: New Yorkers Want To Know More About Canada’s Marijuana Industry
Author: Debra Borchardt
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Photo Credit: Mark Ralston
Website: Forbes
