US cannabis brands embrace international expansion opportunities

Increased demand for U.S. cannabis products and emerging opportunities in Europe are driving some American brands to expand internationally.

The roster of companies targeting international growth represent a small but growing cross section of the industry, from established category leaders such as Jeeter and Wana Brands to infused beverage manufacturer Lehua Brands.

Surprisingly, some American marijuana operators are finding global expansion easier to navigate than the complex patchwork of state regulations in the United States, where rules vary by market.

The U.S.-based operators share some traits that make them good candidates for international expansion – including sustained success stateside, category specialization and a push to become one of the sector’s few true global brands.

Perennial challenges in their home markets also are prompting a few marijuana brands, such as King City, California-based Lehua, to seek a more welcoming path to growth elsewhere.

“California is going through a tough time: Overtaxation, the persistent strength of the illegal market, distributor challenges and market oversaturation are taking a toll on everyone who is passionate about cannabis,” said Sierra Elaina, CEO of Lehua Brands.

“It’s hard not to feel worn down. I’ve seen great brands pull out, shops close and many talented people leave the industry or face long periods of unemployment.”

The vibe, according to Elaina, couldn’t be more different in Canada, where Lehua recently launched its sugar-free, zero-carb and zero-calorie infused sparkling water at more than 100 stores in Ontario.

“They’re truly interested in our California experience,” she said.

“It’s refreshing to see beverages bought by the case in many dispensaries – something I rarely encounter in California.”

New York-based marijuana multistate operator Curaleaf Holdings has been prepping expansion across Europe since its 2021 acquisition of Emmac Life Sciences.

Two years later, it purchased a processing facility in Portugal for roughly 2.5 million euros ($2.7 million) from Colombian producer Clever Leaves.

The MSO, which has been exporting flower from its Portugal facility to the United Kingdom, recently began exporting cannabis to Germany, according to Curaleaf’s newly minted chair and CEO Boris Jordan.

Jordan, a longtime figurehead at Curaleaf who previously served as executive chair, took over leadership on Aug. 16 from Matt Darin, who is retiring at the end of the year.

“We’re constantly looking for new opportunities in the German market, and we’re putting money behind that,” Jordan told MJBizDaily in an interview at Cannabis Europa.

“Germany is going to be the biggest market in Europe,” he said at the time.

On April 1, when Germany’s landmark recreational cannabis law went into effect, Curaleaf expanded medical sales throughout the country.

The legislation that ushered in a limited recreational market in Germany essentially decriminalized cannabis, allowed home grows and laid the framework to establish “cultivation social clubs” – nonprofit organizations where members can acquire marijuana for adult use.

Three weeks after the seminal policy shift was enacted, Curaleaf closed a $16 million purchase of Northern Green Canada, a vertically integrated Canadian operator with established business in Germany, Poland and the United Kingdom.

Though the law stops short of creating adult-use stores akin to the retail programs regulated in 21 U.S. states, the new policy is expected to boost Germany’s already thriving medical cannabis market.

According to a report released in late July by Frankfurt, Germany-based medical cannabis company Bloomwell Group, the number of MMJ prescriptions issued since March have skyrocketed 400%.

Internal data, including comprehensive evaluations of tens of thousands of prescriptions issued via its medical cannabis platform between January 2023 and June 2024 also revealed a steadying supply chain with greater flower variety (237 strains) for patients and declining prices.

In its second-quarter investor presentation, Curaleaf noted its investment in Four 20 Pharma, a German medical cannabis producer and distributor with European Union-Good Manufacturing Practice (EU-GMP) certification.

The company is a market-share leader in Germany and Poland.

In a news release reporting earnings for the second quarter of 2024, Curaleaf cited international growth opportunities in Germany as a revenue driver in the second half of the year.

“We’re going to continue to put our heads down and work in the German market and continue developing our brands and our distribution channels to make sure we can have a strong position in that marketplace,” Jordan told MJBizDaily.

As Canadian operators increasingly diversify outside the local market amid marijuana sales declines, their U.S. counterparts are entering the field.

In the past few months, U.S.-based cannabis operators Beard Bros Pharms, Jeeter and Lehua Brands all have made the jump across the northern border.

A few U.S. businesses, such as Oregon-based edibles maker Wyld, already have been operating in Canada for years.

Desert Hot Springs, California-based Jeeter, a market leader in pre-rolls in Arizona, California and Michigan, expanded into Canada in March.

Sebastian Solano, co-founder and co-CEO at Jeeter, described the process as a bit of a culture shock.

“As you learn more about it, you realize how involved the government is,” Solano told MJBizDaily during a phone interview.

“It creates a lot of red tape and a lot of restrictions – and, obviously, higher taxation.”

Higher taxes squeeze margins, but Jeeter is attracting loyal customers in Canada as it has stateside.

Jeeter partnered with Vancouver, British Columbia-based Final Bell Holdings International in its first licensing deal to manufacture products in the Canadian market.

The brand launched its first products in Ontario, followed by British Columbia.

“You’re only selling to the government, so that’s another really interesting thing about Canada,” fellow Jeeter co-founder and CEO Lukasz Tracz said at the time.

That model eliminates distribution, delivery and fleets, another major contrast to operating in most U.S. markets.

“You can produce everything in one facility in one area and be able to distribute to the whole country – as opposed to the United States, where every state feels like a country,” Tracz added.

The brand has seen significant product adoption since March, ascending the leader board in pre-roll sales in Ontario, the country’s most-populous province.

Jeeter appears poised to challenge the market-share leader, General Admission, in the infused pre-rolls category.

“It’s exceptional to see how what we’ve done in the states is translating in this new market,” Solano told MJBizDaily via email.

“We are selling out across the board and have our eyes set on launching in all of the other provinces within the next year.”

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In Switzerland, Colorado-based marijuana edibles maker Wana Brands plans to participate in a few pilot programs in the emerging cannabis market.

Under that country’s developing model, every city or canton (think U.S. state or German Bundesland) can apply with the Federal Office of Public Health to establish its own pilot program.

“There’s no rules around how you roll out a pilot program; all you have to do is a make a compelling case to the government,” according to Wana CEO Joe Hodas, who succeeded Nancy Whiteman in May to take the Colorado-based brand’s top post.

The pilot programs can accept as many as 5,000 consumers, depending on the designated area’s population, and Swiss programs must contain some research component.

Research can vary and cover an array of areas, such as:

“It has to be data-driven, but it doesn’t necessarily dictate what kind of studies or what kind of outcomes you’re looking for,” Hodas said.

And there’s one more caveat.

“This is the most interesting thing: You have to be an existing cannabis consumer to be a participant in the pilot program,” Hodas said.

“They will literally take your blood to ensure that there’s THC in it.”

Hodas expects Wana to participate in a few pilot programs across the country by year’s end.

“We’re also looking at this wholesale model where we can work with existing pilot programs that don’t have gummies or edibles and provide our product to that pilot program,” he said.

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.