Aura Health Inc (CSE: BUZZ) recently sat down with Pat Beechinor of The Newswire to identify the market opportunity that the firm has ahead of themselves with respect to the German marketplace. Taking the format of a ten minute podcast, CEO Daniel Cohen covers all aspects of Aura’s business – including the status of GMP Certification in Canada, future potential markets, and the opportunity that exists amongst Israeli-based cultivators.
A copy of the podcast episode can be found below, along with the full transcript of the conversation.
[Pat Beechinor] From the newswire this is Market Radio, the podcast voice of the markets in Canada and the US. I’m Pat Beechinor. Dateline July 31, 2019 and on this edition, Daniel Collins CEO of Aura Health Inc, BUZZ on the Canadian Securities Exchange or co-listed on the OTC markets as symbol there as LMLLF.
Aura Health Inc is a Canadian company with global cannabis aspirations, in fact their target market is Europe. Germany in particular, with some very instrumental production ties to Israel. In May, Aura purchased German based Pharmadrug and that’s a major stepping stone to the company’s growth strategy, in that Pharmadrug itself not only allows for distribution of product into Germany but also allows for export from Germany into the rest of Europe as those markets open up.
Joining me is Daniel Cohen, CEO. Daniel give me a lay of the land on Europe as a whole.
[Daniel Cohen] The European markets are in their infancy. I mean, I would say that you know it’s not even first inning yet, its batting practice. CBD has been allowed in several countries. Italy has a THC lite products where it’s you know it’s mostly hemp. England has just allowed CBD and you’re getting the hemp there. But in terms of of THC cannabis the largest country by far and the most advanced is Germany and Germany itself is quite early. Germany allowed medical cannabis in 2017. So it’s only two years old. And at the current moment there is no medical cannabis grown in Germany.
They’re importing all of their product. The majority of our product in terms of flower is coming from the Netherlands because the Netherlands have only one licensed producer and that’s called Bedrocan. And some Canadian products have started showing up, however not much has actually shown up for several reasons. Number one Germany is a GMP jurisdiction so to be able to sell your product, register your product with the German authority and to get your product into Germany. It has to come from a GMP facility and Health Canada standards are not at the level of EU GMP.
There are only of all the facilities in Canada, there are only six facilities in all of Canada that have achieved EU GMP status and most of those are owned by the big guys. And the big guys, the Auroras, the Canopy’s, so on and so forth, they actually don’t have that much product to bring into Germany. With the product that they have that they’re able to send to Germany, they have to toggle that between the demand in Germany and the demand in Canada because there are shortages in Canada as well.
[Pat Beechinor] It’s just a quick side note for listeners as well, when Daniel is speaking of GMP that acronym is for goods manufacturing practices. Those are regulations in Europe guaranteeing quality, uniformity, conformity etc. So what applies in Canada, our regulations may or may not necessarily apply to Europe. Daniel back to Germany though, where you’re at right now, if you can explain that and where you foresee things moving forward.
[Daniel Cohen] To give you a little bit of a flavor of where we’re at, in 2018 a mere 2.7 tons of flower was sold into Germany. Two point seven tons. Now there was demand for more than that, but because most of the product is only coming from Bedrocan you’re limited by supply.
So two things are going to continue to happen. A) The demand is going to continue to grow just naturally inside Germany but, B) other products is going to start to show up. There will be more Canadians who get EU GMP status. Some European countries are already talking about producing cannabis, kind of like Portugal and Greece.
Israel, which is a key part of the story, just announced they passed their law in January to export cannabis, medical cannabis. They’re putting the framework together and Israel will be able to export to Germany. So it’s kind of a little bit of a chicken and egg thing that the market will really start to take off once there’s more supply. That supply should really start to pick up at some point in 2020 and to a large extent in 2021.
When we saw the Canadian Medical Market begin it started with about ten thousand patients, within five years it went to over 300 thousand patients. Germany is two and a half times the size of Canada. So you know over the next five years you can see a massive increase in the size of the cannabis market in Germany alone. That doesn’t even take into account all the other countries that will sooner or later allow medical cannabis on a THC level.
Our growth opportunity will be twofold. A – to bring in more products into Germany as we find more companies in Canada that get GMP status. Also we believe that Israel is going to be a major supplier of medical cannabis to Germany. That’s the first part. That’s our avenue for growth.
A second part of our avenue for growth is yes indeed, as more markets open up in the EU, we’ll be able to take the product that we bring into Germany and allocate some of that to other EU countries.
[Pat Beechinor] Daniel as I alluded to earlier on, there is also an Israeli element in Aura’s European equation. How does Israel tie in?
[Daniel Cohen] Israel is actually, arguably, the founder of the modern medical cannabis industry. It was actually an Israeli scientist who isolated, discovered and isolated THC back in the 1960s. There was another Israeli scientist who-who discovered the anti inflammatory properties of CBD that was in the 1970s and they also have a great history of creating commercial products. The first medical cannabis company in Israel was called Tikkun Olam and they developed several strains. And those strains were the strains that Medrelief licensed two years ago and brought to Canada and those are the products that won all the awards for Medrelief and made Medrelief who they were.
So they have a history of developing high quality strains as well. They have probably one of the largest centers of R&D for medical cannabis and that’s one area why I think that Israel is an important country for cannabis. [It] was extremely important, and specifically for Europe, is that as you know right now outside of the Netherlands, Canada is the only real exporter of cannabis. Canada, not all of the growth in the majority of the drugs in Canada don’t have EU GMP status. Then you look at other countries who are talking about exporting at a certain point in time like Colombia, they don’t really have a GMP culture and they’re not really a GMP jurisdiction.
Israel is a country that is known for advanced agricultural sciences and technologies. They’re also a pharmaceutical country and it is a GMP jurisdiction. To be able to build a grow now and get licensed means that you have to build your grow to GMP standards, to GMP specs. And what’s very important is that Germany and Israel have a bilateral agreement that recognises each other’s GMP. So with a product that’s going to be delivered from Israel, will be product that is geared to the International Medical markets and that is at the standard that the Germans will accept. There’s no other country right now that has actually built its infrastructure especially for that.
And that’s why I think Israel is going to be a major supplier to the European markets. They passed their law for exporting in January. They’re putting the framework together right now and we expect the first product to be shipped at some point in early 2020.
[Pat Beechinor] Daniel we’re up against the clock a bit here, but this is a fascinating story. For those that want more information on Aura Health and to follow the story and follow the stock, where do folks go? Who did they get a hold of?
[Daniel Cohen] Well you can go to our website, it’s AuraHealthInc.com or Daniel Cohen, DCohen[@]AuraHealthInc.com or Howard Brass, HBrass[@]AuraHealthInc.com.
[Pat Beechinor] Daniel Cohen, CEO of Aura Health Inc. BUZZ on the CSE, LMLLF on the OTC markets. Daniel, thanks.
[Daniel Cohen] Thank you, take care.
[Pat Beechinor] And this has been another edition of market radio. We hope you enjoyed the program, we hope you share it. Market Radio is the exclusive property of thenewswire.com and available on Apple Podcasts, Spotify, Google Podcast, Tune In, Cass Bach, Stitcher, and wherever you find your quality podcasts. I’m Pat Beechinor. Until next time, so long.
FULL DISCLOSURE: Aura Health is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Aura Health on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.