Beyond Europe And North America: Curaleaf's Strategist On Cannabis Markets In Australia, New Zealand, And Israel

While much is known about the cannabis markets in Europe, the USA, and Canada, the real cash cows might lie in emerging regions. In an exclusive discussion with Benzinga Cannabis. Juan Martinez, head of Curaleaf International Holdings CURLF, explored the strategic expansion into Australia, New Zealand and Israel and the potential these markets hold.

The Australian Market

The Australian market is a key focus for Curaleaf. Martinez highlights that the Australian cannabis market is twice the size of Germany's, already boasting over half a million patients. "Australia is a very attractive market. Not a lot of people realize that the Australian market is two times the size of the German market today," Martinez said. "We believe there are over 500,000 patients in Australia, which is a significant number compared to Germany's 200,000 patients."

Curaleaf's acquisition of Northern Green Canada (NGC) has been instrumental in facilitating its business operations in Australia. "Curaleaf, through the acquisition of NGC, is already doing considerable business in Australia," Martinez explained. This acquisition enables leveraging NGC's established infrastructure and expertise to penetrate the Australian market effectively.

One of the significant advantages of the Australian market is the regulatory environment, which is more permissive compared to Europe.  "The benefit with Australia is that they opened up the ecosystem for clinics and telemedicine companies, making it easier for doctors to get educated and onboard to prescribe cannabis. This allows for rapid expansion and lower costs for patients."

The regulatory framework in Australia permits a broader range of cannabis products, including edibles and vape products, which are often restricted in European markets.

"In Australia, you can get very creative in terms of new product development because the regulations allow for different form factors," Martinez told Benzinga. "We're starting to see operators enter the market with edible products and vape products, which is something we're closely monitoring."

New Zealand And Israel

In addition to Australia, Curaleaf is also expanding its presence in New Zealand and Israel. "Curaleaf International is not just a European business. We are now in Australia, New Zealand, and Israel," Martinez said. These markets, although smaller than Australia, still offer substantial opportunities for growth.

In New Zealand, the regulatory environment is also favorable, allowing Curaleaf to explore various product offerings. "New Zealand has specific monographs and requirements, such as allowing only a limited number of approved pesticides, but we already comply with these standards," Martinez explained. This compliance ensures that Curaleaf can effectively navigate the regulatory landscape and meet market demands.

Israel, despite the ongoing conflict, remains a significant market with 130,000 patients.

"Israel has changed its regulations to allow for cannabis no longer being a last resort, leading to tremendous increases in patient numbers," Martinez said. "We see Israel as a market with a lot of potential, and some companies are already doing over $100 million in revenue just from this market."

Strategic Supply Chain Management

Curaleaf's strategy for these international markets involves a robust and flexible supply chain. The company leverages its cultivation facilities in Portugal and Canada to supply these regions. "Australia and New Zealand require GMP (Good Manufacturing Practice) standards, which we already meet with our facilities in Portugal and Canada," Martinez explained. This ensures that Curaleaf can maintain high-quality standards and meet regulatory requirements across different markets.

Martinez also touches on the possibility of further expanding their cultivation capacity. "Our Portuguese facility can more than triple its cultivation space with very low investment," he noted. "Similarly, our facility in Canada has significant space for expansion. This allows us to press a switch and triple our supply, depending on how demand evolves and regulations change."

Market Challenges And Opportunities

While the opportunities are vast, there are also challenges, particularly around patient awareness and regulatory navigation, Martinez pointed out. “Marketing restrictions in countries like Australia are very strict, making patient education and word-of-mouth crucial."

However, he remains optimistic about Curaleaf's ability to overcome these challenges and capitalize on the growth potential in these markets. "Our focus is on patient needs and regulatory compliance. By leveraging our data-driven approach and existing infrastructure, we are well-positioned to expand and succeed in these international markets," he concluded.

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