More Canadian cannabis companies are testing the waters in Europe’s ever-growing cannabis market. The latest companies to bag EU-Good Manufacturing Practice (GMP) certification were Northern Green Canada and Eve & Co subsidiary Natural MedCo.

Strathroy, Ontario-based Natural MedCo and Brampton and Ontario-based Northern Green Canada both gained EU-GMP compliance on March 4. With this form of licensing, the companies can export medical cannabis to markets that reside within the European Union; thus boosting their competitive advantage.

“This certification enables us to continue in our global growth strategy and fulfil contracts in the EU market,” the CEO of Eve & Co., Melinda Rombouts, said in an official statement. The daughter company of Eve & Co., Natural MedCo, has confirmed that it will distribute medical cannabis among Germany’s market. 

EU-GMP certification process takes longer than some companies expected

Obtaining EU-GMP certification is not an easy process for companies operating outside of the European Union. Aside from being time-consuming, the process is also costly.  Some Canadian cannabis producers have been faced with delays of up to a year, including Leamington, Ontario-based Aphria, which gained EU-GMP certification in March 2018; a year later than the company initially anticipated.

Being in possession of EU-GMP certification has also failed to demonstrate significant profit potential for Canadian cannabis companies. For example, despite boasting numerous EU-GMP certifications, Tilray’s international revenue for the most recent quarter had slipped 30 percent since the previous period; revenue amounted to just $4 million.

In the unfortunate case of Alberta-headquartered Aurora Cannabis, international medical cannabis sales sunk by a painful 64 percent in its most recent quarter; even with EU-GMP verification. The loss equated to $1.8 million Canadian dollars (USD $1.3 million) due to a temporary sales suspension in Germany.

In the case of TerrAscend – which was awarded EU-GMP certification for its Mississauga, Ontario facility in early 2019 – revenue results from its entry into the European market have not been published as of yet. The Canadian cannabis company finalized its initial European shipment of dry cannabis flower on August 14, 2019; sent to its German distributor. It is unsure as to whether the shipment was to be utilized for testing or commercial retail sale. 

Why is GMP certification essential for cannabis companies?

Every medicines manufacturer – no matter what their specialty area – must have received a good manufacturing practice (GMP) certification if they are to distribute their product(s) legally. A certified company will have met the minimum standard required for GMP production processes; inspections are arranged by the European Medicines Agency (EMA) to ensure a facility and its operations are compliant. 

“That part of Quality Assurance which ensures that products are consistently produced and controlled to the quality standards appropriate to their intended use,” reads the official definition of GMP. Companies that gain GMP certification can enjoy a smoother transition into the medical cannabis market at European Union (EU) level, with the vast majority of options opening up in Germany. 

Despite the fact that Germany’s cannabis market was estimated to be worth an impressive €73.7 million in 2018 (USD$79 million), figures regarding cannabis sales in 2019 have not been released and so, predicting this year’s sales figures proves tricky. Because of this, overseas companies getting involved in the space may be taking a risk as early-movers.