Over the past few years, our international trade team has advised a growing suite of clients on import/export issues related to cannabis. We regularly advise clients on manufacturing overseas, hemp import/export issues, and customs. Currently we are also working on heady questions surrounding international treaties and cannabis. One thing no one has hired us for yet, though–and which I would love to work on–is shipping medical cannabis internationally.
How do you ship medical cannabis internationally? Here are the steps:
- Start in a country with federal laws allowing medical cannabis production (there are quite a few);
- Start in a country with a progressive national health department and exporting authority (any of Canada, the Netherlands, Uruguay, Colombia, Israel, Jamaica, South Africa, Lesotho or Australia would probably suffice);
- Find a country that allows medical cannabis imports (there are quite a few, especially in the E.U.);
- Strike a deal and acquire import and export permits; and
- Report all imports and exports to the International Narcotics Control Board (INCB) as required.
That last step is worth a paragraph. The INCB is the United Nations’ independent control body for international drug conventions. In the context of cannabis, the 1961 Single Convention allows cannabis to be produced and administered for medical and research purposes under certain conditions. The required controls include that a government agency designates the area where cannabis can be cultivated, licenses producers, and has the exclusive right to import, export, trade at wholesale, and maintain supply. Each of the export countries listed above has taken steps along these lines.
Of course, exports will always be driven by demand. And demand is not solely a matter of quantity; product categories are also dispositive. To date we have seen medical cannabis import/export in categories including whole flower, oil, topicals and capsules. Some of this cannabis has been exported for research purposes, but the majority seems to have shipped for medical application. This is generally because the importing countries allow medical marijuana or cannabis consumption, but do not license production and do not tolerate home grow.
The medical cannabis import/export market is very new. This means that aside from the legal complexities, there are practical matters to work through. Foremost among these are quality standards. Although good manufacturing practice (GMP) adherence is required to ship medical cannabis to the E.U., for example, there are no standardized regulations between and among countries for medical cannabis quality control— including for content, composition, adulterants, potency and even levels of toxic residues. (Think about that… for a “medicine”!) Another critical issue is supply chain integrity. Finally, a thicket of political and policy considerations must be navigated, extending to social responsibility and end-user frameworks.
Firms pressing into the medical cannabis export space typically describe their efforts as long-term investments rather than one-off projects. This makes sense given the capital requirements for entry and the political wherewithal needed to gain international footing. Indeed, the quantities of cannabis shipped will be sizable and spaced at irregular intervals: this is not an area for dabblers.
Ultimately, exporting medical cannabis from places where it grows best, like Columbia, to places it might not, like England, seems natural – just as it does for Columbia to grow and send coffee overseas. Today, Canada has a big head start on export; however, one wonders whether it makes sense for cannabis to be grown north of the 42nd parallel long-term. At some point, the legal regime will settle out and market efficiencies may follow.
In all, legal and political factors that once made medical marijuana export unthinkable are changing, and changing very fast. The international distribution channels being built today will one day serve as conduits for the recreational cannabis trade as well. Until then, we will continue to monitor and report on developments in this fascinating space.
For more on the international cannabis trade, check out the following: