While all eyes are on the launch date for recreational cannabis in Canada —said to come in either late summer or early fall— the medical side of the equation should be getting the attention, as well, because it’s about to get much bigger, says Eric Paul, CEO of licensed producer CannTrust Holdings (TSX:TRST).
The ramp up in Canada’s cannabis sector is ongoing, with industry estimates of sales eventually adding up to between $5 and $8 billion a year. That’s substantial, since by comparison, Canada produces a little under $3 billion of beer a year and about $1 billion in tobacco products.
But while the rec market is getting all the focus, the medical marijuana industry both at home and abroad should be getting its props, since it’s growing by leaps and bounds.
“We’ve been astounded by the growth of the medical marijuana industry in Canada,” Eric Paul, CEO of CannTrust Holdings, tells BNN.
“Roughly ten or 12 per cent of the 80,000 doctors across Canada who could prescribe are prescribing [cannabis], and I would say we’re gaining on that for a number of reasons,” says Paul. “The first being the opiate crisis where doctors are looking for cannabis as a potential first-line therapy for pain management. The second thing is that there is more research coming out; we’re about to announce a couple of major research projects in Canada and one is a major pain management study. As these research projects produce their end result, more doctors are looking at cannabis as an alternate therapy for chronically ill people.”
Statistics Canada has reported that between April and December of last year, the number of clients registered under its Access to Cannabis for Medical Purposes Regulations (ACMPR) has gone from 174,503 to 269,502.
Paul says that CannTrust itself has a 40,000-strong patient base and is looking to jump to 100,000 in 12 months time.
“We’ve had a major expansion in Niagara: a 430,000 sq. ft. state of the art greenhouse which is up and running,” says Paul. “We believe that with that capacity and with the nature of that facility, we’ll be able to supply our current customer demand in the medical market and have sufficient capacity to handle the first generation of recreational demand.”
But aside from Canada’s own growing medical market, the international market is poised to take off in countries like Germany and Australia, and many of the top licensed producers in Canada are now lining up deals outside of Canada.
In March, CannTrust announced that it has entered into a joint venture agreement with a Danish company to grow and sell medical cannabis.
“The industry is globalizing much faster than any of us expected,” says Paul.
“Various countries are going into medical legislation and Denmark is one of those countries that have announced that we’re fully licensed there, we’ll be building a facility there,” he said. “In that country, the government has decided to fund the cost of it for the consumer, via prescription, and they’re willing to fund 100 per cent for people with palliative or end-of-life care and 50 per cent for chronic illness. That will allow those industries to quickly garner market share. Germany is a similar kind of situation and also Australia.”