Increased demand for US cannabis products and emerging opportunities in international territories are spurring many American cannabis brands to expand their rosters overseas. Many are finding great success, as the legalization of cannabis on US soil has had a tremendous impact on the global market at large.
The roster of companies targeting international growth represents a small but steadily growing cross-section of the industry, from established category leaders such as Jeeter and Wana Brands to infused beverage manufacturer Lehua Brands.
To their delight, 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. While the US is still a bit of a ‘wild west’ scenario when it comes to the legal sale and distribution of cannabis, given how new it all is, this is not true of international territories, which essentially have a much more streamlined and efficient system in place.
These US-based challenges in the home markets are also 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: over-taxation, the persistent strength of the illegal market, distributor challenges, and market oversaturation are taking a toll on everyone 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.”
According to Elaina, the vibe 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.
What makes brands like these commonplace in California is what makes them unique in international territories. “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 policies are 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 has skyrocketed 400%. Internal data, including comprehensive evaluations of prescriptions issued via its medical cannabis platform between January 2023 and June 2024, also revealed a steadying supply chain with greater flower variety 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. This company is a market-share leader in Germany and Poland and demonstrates an immense appetite for these kinds of products in those areas.
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 year’s second half. “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 said.
As Canadian operators increasingly diversify outside the local market amid marijuana sales declines, their US 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 US 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 Arizona, California, and Michigan pre-rolls, expanded into Canada in March.
Sebastian Solano, co-founder and co-CEO at Jeeter, described the process as culture shock. “As you learn more about it, you realize how involved the government is,” Solano said 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 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 said 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.”
