Curaleaf International’s Strategic Moves in Europe: Exclusive Insights from Juan Martinez

Curaleaf International is already one of the most prominent cannabis companies in the world, with a presence in the UK, Germany, France, Italy, Switzerland, Spain, Portugal, Poland and the Czech Republic. 

Despite its significant existing global footprint, the company has had a busy start to the year, seeing a near 60% growth in revenues over the first quarter, as it continues to make strategic acquisitions to bolster its position in the flourishing European medical market. 

Ahead of Cannabis Europa next week, where Curaleaf’s Executive Chairman, Boris Jordan, Curaleaf International’s Managing Director of the UK & Nordics, Jonathan Hodgson, and the head of Curaleaf International, Juan Martinez, will be speaking, we caught up with Juan to discuss the company’s progress in Europe and what he expects for the future of the rapidly growing market. 

BofC: Curaleaf International has had a busy start to 2024, can you give us an overview of your activities throughout Europe so far this year?

Juan Martinez: It’s been a fantastic start to the year for us at Curaleaf. Our international business saw a 59% year-over-year revenue growth in the first quarter, thanks to the strong medical cannabis markets in our key regions such as the UK, Germany, and Poland. We’ve also been building brand awareness in emerging markets like Switzerland, Czechia, and Sweden.

We kicked off the year with a really positive rebrand of our UK clinic from Sapphire Clinics to Curaleaf Clinics. The UK has also seen strong patient reception to our expanding product offering including pastilles and vapes.

In February, we completed the acquisition of Can4Med, a major pharmaceutical wholesaler in Poland. With a population of 38 million people, Poland is proving to be a strong market for us as the country is witnessing a political and societal shift towards cannabis increasingly accepted as a medicine by patients and doctors alike.

To further bolster our position in Europe, in late March, we announced the acquisition of Northern Green Canada, an EU-GMP certified producer of high-quality indoor flower. Not only is NGC transaction accretive to our international gross margins, but it also ensures the stability of our supply chain into Europe. An added benefit from this transaction is the ability to study 2 other high-growth medical cannabis markets NGC currently sells into, Australia and New Zealand. This acquisition represents another key pillar in the development of our global brand strategy.

In Sweden, eligible patients can now access medical cannabis through Sapphire Clinics for the first time this year. The clinic specialises in cannabis-based medicine and will contribute patient data to a new study at the Karolinska Institute, Sweden’s largest medical research university.

Of course, in Germany, the enactment of Pillar 1 legislation, decriminalising cannabis by removing it from the narcotics list, is a significant domino to fall. In the first few months since the law took effect, we have seen a substantial increase in patient counts which have surpassed expectations. And while still early, the signs are very promising for Curaleaf. We anticipate other EU regions will follow suit and foster a more enlightened approach to cannabis legislation.

We are a leading global operator and will continue to press our advantage to drive further market share gains. It has certainly been a busy start to the year as we continue to develop a global brand strategy which uses our experience, medical research, and unmatched global supply chain to lead in Europe and beyond.

BofC: Has this activity been driven by a growing sense of momentum and acceptance of cannabis throughout the continent?

Juan Martinez: As part of the largest cannabis company, our long term vision is to consistently deliver superior products and to help drive the global acceptance of cannabis. The cannabis market in Europe has evolved a lot in recent years and we will continue to expand and increase patient access as regulations evolve both in Europe and internationally.

Changes in law in countries such as Malta, Luxembourg, Switzerland, the Netherlands, Czechia, and most significantly, Germany, have demonstrated this trend. There have been some notable events, including Switzerland’s first regulated sales of adult-use cannabis and Malta’s first legal non-profit cannabis club which opened in January 2024. Over 20 European countries now allow medicinal cannabis use in one way, shape or form, with Germany taking the pole position. This growth presents big opportunities for companies like us at Curaleaf International to meet the rising demand for medical cannabis products and services.

Curaleaf is strongly supportive of the movement toward cannabis legalisation across the continent, it is a positive development for the industry and public health.

BofC: Let’s start with Germany. The removal of medical cannabis from the list of narcotics has, according to numerous sources, driven rapid growth in the private market, is this something you’ve seen at Four 20 Pharma?

Juan Martinez: Yes, as one of the largest wholesalers and brands in the market, we have seen exponential growth at Four20 Pharma since the removal of narcotics list.

Online teleclinics such as Algea Care, have treated over 100,000 patients in the first two weeks since the reclassification, and pharmacy re-orders continue to grow as they adapt to the changing supply chain – with Four20 Pharma as one of the leading consistent quality wholesalers in the country, we have certainly felt that increase.

With the dramatic increase in accessibility and the amount of telemedicine clinics offering affordable consultation and product prices, patient numbers are increasing, and we are continuing to see a sharp increase in demand since April 1.

BofC: Are there plans to build on your presence in the market now that CanG has been passed?

Juan Martinez: Curaleaf is always looking for ways to increase shareholder value, deliver product excellence and increase patient access.

Germany’s highly anticipated ‘Pillar 2’, is now being worked on by the German government and we are also expecting further changes to the Pillar I via proposed amendments. These changes in regulations will certainly lead to us having an increased presence in the German market. We’ll keep investing in infrastructure and services to meet the increasing demand and make the most of the growth opportunities from the new Cannabis Act

BofC: What impact do you think CanG has had on the wider attitudes to cannabis among European policymakers?

Juan Martinez: The passage of the Cannabis Act (CanG) in Germany has certainly had a significant impact on the wider attitudes toward cannabis among European policymakers. As Germany is one of the largest and most influential countries in Europe, its progressive stance on cannabis legalisation is already setting a powerful precedent. Europe’s largest economy could also create momentum to change the UN convention that restricts the cultivation of the plant and also puts pressure on neighbouring European states to follow Germany’s lead. European countries that have a bigger problem with illegal cannabis use and the failed war on drugs, like France, are watching very closely what Germany is doing at the moment.

CanG has shown that a major European nation can successfully implement a regulatory framework that balances public health, safety, and market growth. This move is likely to inspire other European countries to consider similar approaches, viewing the German model as a viable template for their own cannabis policies.

We anticipate a wave of policy re-evaluation across the continent, with more countries adopting a liberal approach to cannabis. This should result in harmonising cannabis laws within the European Union, promoting easier cross-border trade and the standardisation of quality and safety standards.

It is no surprise to me that as the world rolls back the ineffective war on drugs, and as patients increasingly have legal access to cannabis as an option, the usage in this population is increasing. At Curaleaf, we are dedicated to collecting and providing evidence-based information for patients, researchers and medical practitioners so they can make informed decisions about using cannabis-based medicines.

One week to go!

We are gearing up for @cannabiseuropa, the conference that brings together the brightest minds and most influential voices in the cannabis industry.

As headline partner, our team will be well-represented with four outstanding speakers:

– @Boris_Jordan, Chief… https://t.co/oY1ZQCmelw

— Curaleaf International (@curaleafint) June 18, 2024

BofC: Prohibition Partners recently reported that the ‘UK is now the primary driver of growth in Europe’s medical cannabis market’, largely due to ‘unusually high’ consumption rates, what do you think is behind these levels of consumption?

Juan Martinez: The beginning of 2024 has already shown significant growth, with a record number of UK private clinics now providing medical cannabis treatment for lower appointment costs than ever before. More formulations and dosage forms have entered the market, such as pastilles and liquid vape cartridges, broadening the treatment options available for specialists to prescribe to patients.

At our own clinic, we have not seen ‘unusually high’ consumption rates, and actually, consumption rates are lower than those in Israel and Germany, for example. However, patient advocacy is boosting awareness and making cannabis more accessible, while better supply chains ensure it’s always available. Investment in R&D is leading to new forms of cannabis treatments, increasing the range available and improving patient choice.

BofC: Unlike Germany, the UK seems to be much further away from enacting any major cannabis reform. As its biggest operator, what attracts you to the market?

Juan Martinez: Curaleaf was the very first clinic in the UK to be given approval by the Care Quality Commission (CQC) to prescribe cannabis based medical products and we have always been committed to improving access in the UK market. We’re proud to have the largest and highest-rated medical cannabis clinic in the UK. Curaleaf clinic is all about making medical cannabis more accessible for patients, educating the public and medical community, and utilising data-driven insights to support this mission.

Given its rich history of biomedical collaboration, the UK particularly excels in real-world data collection. Through patient registries and facilitating drug development, the UK is in pole position to lead the change. For instance, our initiative of creating the UK Medical Cannabis Registry provides valuable insights into patient outcomes, informing clinical trials and pre-clinical research to improve cannabis-based medications. This positive feedback loop is unique in drug development and can help overcome the inherent research challenges in developing cannabis based medicines, hopefully leading to more licensed medications and benefits to a larger patient population.

However, there is still a lot of work to do in terms of awareness. We estimate there are over 45,000 medical cannabis patients in the UK, which represents less than 0.1% of the population. However, over 1.8 million Britons are estimated to be using cannabis in the illicit market. To put that into context, Florida, a US medical market, has almost 900,000 patients, or 4.0% of the population.

We’re excited to announce that we’ve become a founding member of a new task force, called the UK Cannabinoid Research and Development Group (CRDG), which aims to make the UK a global leader in cannabis and cannabinoid research. Led by George Freeman MP and Professor Trevor Jones, this initiative will bring together universities, research institutions, investors, businesses, and the NHS to deepen our understanding of cannabis. The task force is currently working on the country’s first comprehensive cannabinoid R&D strategy, filling a big gap since medical cannabis was reclassified in 2018. Right now, there are only three licensed cannabis-based medicines in the UK. With backing from industry partners like Curaleaf International, we look forward to the task force sharing its plans and releasing its initial strategy paper in July.

BofC: Curaleaf recently acquired Northern Green Canada (NGC), which was billed as a ‘significant milestone in Curaleaf’s expansion strategy’. Can you walk me through how this is driving your European expansion?

Juan Martinez: Curaleaf’s recent acquisition of Northern Green Canada (NGC) significantly bolsters our global expansion strategy.

NGC was the first privately-owned Canadian licensed producer of cannabis to have EU GMP certification and in 2023 over 95% of their Revenue was attributed to international markets. Their best-in-class indoor facility ensures a secure and consistent supply of EU-GMP cannabis that adheres to high-quality standards. This is crucial for the continued success of our Four20 brand in Germany, guaranteeing product availability to meet patient demand and maintain one of the leading positions within this rapidly evolving market.

Second, as NGC was already a key supplier to both our Four20 Pharma brand in Germany and our Curaleaf UK brand, the integration of NGC into our supply chains increases gross margins through vertical integration, allowing for strategic reinvestment to further propel our expansion and R&D efforts.

Finally, an added benefit from this transaction is the opening up of new markets to Curaleaf including Australia and New Zealand.

BofC: In the announcement, there was mention of capitalising on your first mover advantage in Poland, can you tell me about the opportunities in this market?

Juan Martinez: Poland’s medical cannabis market is expanding rapidly, and our partnership with Can4Med allows us to better serve patients while driving growth across Europe. This acquisition allows us to efficiently distribute products and solidify our presence in this exciting market.

Data from Polish health authorities shows a dramatic increase in medical cannabis prescriptions since legalisation in 2017, and this trend is expected to continue. For example, data from the Polish Ministry of Health indicates a threefold increase in the market between 2022 and 2023.

We are also focused on doctor education and have been seeing an increase in the number of doctors who are prescribing cannabis-based medicine.  By bringing Can4Med and NGC into Curaleaf International, we will be able to assist patients more effectively, ensure continuity of high-quality supply, and expand our product offerings to serve a population of nearly 1.3 million cannabis users expected by 2026.

BofC: Similarly, Curaleaf recently announced that it was moving into Sweden for an observational study with the Karolinska Institute, could this potentially open up the market?

Juan Martinez: Our recent expansion into Sweden via Sapphire Clinics, holds significant promise for opening up the medical cannabis market there and allows us to leverage the expertise and insights gained from our presence in other medical market.

The observational study, in partnership with the Karolinska Institute, will gather crucial data on the safety and efficacy of medical cannabis specifically for Swedish patients. This information is vital for shaping future policies around medical cannabis use. With growing evidence and the development of international clinical guidelines, the use of cannabis-based medicines as a treatment option is increasing around the world.

Cannabis Europa is set to bring over 1000 influential leaders from the world’s largest cannabis companies to London on June 25-26, where the latest developments in regulation and research will be discussed in detail. Get your tickets here now.