Canada’s THC-infused beverage market is about to get more crowded.

Jones Soda, the beloved soft drink company known for its quirky flavors, said on Tuesday that the arm of its cannabis business, Mary Jones, “has been approved to operate in Ontario, Canada, with additional provinces to follow.” 

“Starting with their THC-infused beverages, the products are currently slated for Ontario availability in Q1 24,” the company said in a press release.

Jones is eyeing an additional expansion into other cannabis categories within the Canadian market in collaboration with Tilray Brands, the Canadian cannabis company. The company said in the press release that Tilray handles its manufacturing and distribution in Canada.

“Jones was originally founded in Vancouver, BC. Canada and Tilray are a natural fit for our first international expansion for Mary Jones following the incredible success we’ve had in our U.S. markets,” David Knight, CEO of Jones Soda, said in a statement on Tuesday. “Canada’s recreational cannabis sales increased $466.1M CAD in July, up 1.9 % from June this year. We’re looking forward to bringing Mary Jones to Canada’s THC retailers and consumers.”

Blair MacNeil, President of Tilray Canada, said that the company is “excited to partner with Mary Jones and to produce their one of a kind beverages at our state-of-the-art London, Ontario facility.” 

“The Mary Jones brand has seen enormous success in the United States and we look forward to being a part of their rapid growth in Canada,” MacNeil said. 

Jones will “launch in Ontario with its 10MG THC-sodas in a variety of Famous Jones flavors, including Berry Lemonade, Boot Rear (Root Beer) And Col.Ahhhhh (Cola), uniquely labeled for Canadian cannabis packaging and naming requirements,” the press release said. 

“The sodas use the same pure cane sugar recipe as mainline Jones, adapted for cannabis. Cannabis consumers in Canada can enjoy Mary Jones THC-infused sodas alone, mixed in craft cocktails, floats and much more,” the press release continued. “Mary Jones is also exploring future expansion into other cannabis categories in the Canadian market, bringing the beverage flavors into other product formats.”

The cannabis firm Green Hedge “will support sales and field marketing in Canada for Mary Jones,” according to the press release.

“Infused Beverages are growing at a rapid pace in Canada and around the world, including an increasing number of consumers who are shifting to it over alcohol,” said Andrew von Teichman, CEO of Green Hedge. “It creates a highly lucrative opportunity specifically for Mary Jones craft sodas and syrups. Cannabis consumers in Canada are going to love Mary Jones!”

For Tilray, Tuesday’s announcement marks another significant development within its beverage portfolio. Last year, Tilray acquired eight beer and beverage brands in a deal with Anheuser-Busch. 

Tilray CEO and chairman Irwin D. Simon said at the time that the deal with Anheuser-Busch “both solidifies our national leadership position and share in the U.S. craft brewing market and marks a major step forward in our diversification strategy.” 

“We are excited to work with the teams behind these iconic brands that command great consumer loyalty and have a history of delivering strong award-winning products with tremendous growth opportunities. Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base,” Simon said in a statement.

The deal gave Tilray a number of notable brands, including Shock Top, Breckenridge Brewery and Blue Point Brewing Company. It also included 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy.

In his statement at the time, Simon said the move gave Tilray “national distribution to coveted markets across the U.S. and internationally.” 

“In a matter of three years, Tilray has solidified its leadership position in the craft beer industry, and we fully intend to be that change agent that reinvigorates the sector. Upon federal cannabis legalization, we expect to leverage our leadership position, wide distribution network and portfolio of beloved beverage and wellness brands to include THC-based products and maximize all commercial opportunities,” Simon said.

In 2020, Tilray engineered a similar deal, acquiring craft beer company Montauk Brewing.

“Tilray Brands continues to strengthen our U.S. footprint and operations through investments in and growing our portfolio of leading lifestyle CPG brands that resonate powerfully with consumers,” Simon said at the time.

“Montauk Brewing is an iconic brand with leading market share and distribution in the northeast. Tilray Brands intends to leverage SweetWater’s existing nationwide infrastructure and Montauk Brewing’s northeast influence to significantly expand our distribution network and drive profitable growth in our beverage-alcohol segment. This distribution network is part of Tilray’s strategy to leverage our growing portfolio of U.S. CPG brands and ultimately to launch THC-based product adjacencies upon federal legalization in the U.S.”

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Chile, the country, not to be confused with Chili (the food), is the longest north/south oriented country in the world, stretching across 39 degrees of latitudes, giving it plenty of climates for growing cannabis, and the traditional drug of choice, coca leaf. While Chile legalized medical cannabis before any other country in Latin America and has the highest rate of cannabis use on the continent, they have not managed to finalize plans to decriminalize cannabis for non-medical use. 

Can You Bring Cannabis to Chile?

Before getting into Chilean cannabis laws, let’s talk briefly about if you can bring cannabis to Chile. While technically, it is legal to import cannabis to Chile for medical use, that exemption is really intended for Chilean citizens importing their medical cannabis; it is not an exemption to bring cannabis with you on a plane. While currently Chile’s Anti-Narcotics Law is being updated, with a November 23rd deadline for updates to be made, there is no expectation that it will become legal to bring personal-use cannabis to Chile from other countries. 

Long History of Hemp and Cannabis in Chile

Cannabis was not native to the “new world,” and the indigenous peoples of the Americas had no idea what hemp was until colonists and conquistadors brought it with them, originally for cultivation for fiber to make ropes and sails (critical for repairing damage their ships may have suffered on the Atlantic crossing). According to the book Marihuana: The First Twelve Thousand Years, “As early as 1545, hemp seed was sown in the Quillota Valley, near the city of Santiago in Chile.” Most of the hemp fiber produced in those initial cultivation experiments became rope for the army stationed in Chile, with any remaining fibers going to replace worn out rigging on ships that docked in Santiago. Eventually, there was enough of a surplus to send hemp fibers as far away as Lima, Peru, which was critical to the colonists there, as attempts to cultivate hemp in Peru and Colombia were failures. 

It is possibly due to this long history of hemp cultivation and use that Chile has “the highest levels of marijuana use in Latin America,” with 14.5% of residents saying they consumed cannabis in the past year (compared to 18% in the United States). 

Limited Medical Cannabis Program

Chile was the first South American country to have a medical cannabis program. In 2014, the Daya Foundation got approval for a trial grow of 850 plants to make medicine for 200 patients. The following year, Daya was able to scale up their cultivation to nearly 7,000 plants with the goal of producing medicines for 4,000 patients. With those additional plants, Daya’s cultivation is now the largest medical cannabis grow in all of Latin America, and is being tended to by over a dozen full-time gardeners. They anticipate harvesting over 2,000 kilos of bud, roughly 1/3 kilo per plant (almost a pound). 

Now Chilean medical cannabis patients have alternate options to the medicines produced in the country by Daya, and they can pick them up at two pharmacies in Santiago. The pharmacies are selling two products made in Canada by Tilray, distributed to Chile through a partnership with Chile’s Alef Biotechnology. Patients also can grow their own, but what they grow must be used exclusively for personal use by the patient.

Decriminalization in Limbo

Following quickly on the heels of Daya getting the green light to start the largest medical cannabis cultivation in South America, the lower house of Chile’s Congress voted on a bill to decriminalize cannabis for personal consumption. Before becoming law, the bill needed approval from a health committee and then would go to the Senate for a vote, but it has been stalled. Despite the lack of clarity around whether or not decriminalization was approved (some sites imply it was, others do not), medical use of cannabis in private is legal and there seems to be an attitude where if consumption is discreetly done in private, it likely will not result in legal issues. 

A New Constitution, New Chances For Legalization?

Following massive countrywide protests that rocked Chile in 2019 and 2020, Chileans voted for a new constitution convention. The goal of that convention would be to pass a new constitution to replace the one created in 1980, a holdover from Pinochet’s dictatorship. Cannabis legalization activists and observers have noted that the constitutional convention who wrote it appears to be supportive of cannabis decriminalization. According to the Daya Foundation, over two-thirds of the delegates at the constitutional convention “support effective decriminalization … of cannabis and home cultivation.” Unfortunately, Chileans voted no on the new constitution, leaving the old one in place for now.

Coca Leaf and Coca Tea Legal in Chile

Chile is one of the only countries on earth where coca, the plant from which cocaine is derived, can be legally used in the unprocessed form (the raw leaves are legal, cocaine is still very illegal). Chile has a long history of coca use, going back thousands of years. Traditionally, coca was consumed either as a tea or by simply chewing the leaves, these days it is most commonly drunk as a tea. Coca was ancestrally used as a treatment for altitude sickness by the people who lived around the Andean mountains and is still used by hikers and backpackers today. 

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The Canadian cannabis company Tilray Brands announced on Tuesday that it is expanding its beverage portfolio with the acquisition of popular New York-based craft brewer, Montauk Brewing.

“Tilray Brands continues to strengthen our U.S. footprint and operations through investments in and growing our portfolio of leading lifestyle CPG brands that resonate powerfully with consumers,” said Irwin D. Simon, chairman and chief executive officer of Tilray. “Montauk Brewing is an iconic brand with leading market share and distribution in the northeast. Tilray Brands intends to leverage SweetWater’s existing nationwide infrastructure and Montauk Brewing’s northeast influence to significantly expand our distribution network and drive profitable growth in our beverage-alcohol segment. This distribution network is part of Tilray’s strategy to leverage our growing portfolio of U.S. CPG brands and ultimately to launch THC-based product adjacencies upon federal legalization in the U.S.”

For Tilray, the acquisition provides another foothold into the coveted United States market. Like other international cannabis brands, Tilray is circling the U.S. ahead of an anticipated change to the country’s federal marijuana laws.

President Joe Biden last month announced pardons for all individuals with simple cannabis convictions. In the announcement, Biden also signaled a change to federal marijuana laws, saying that he had directed “the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”

“As I often said during my campaign for President, no one should be in jail just for using or possessing marijuana,” Biden said in the announcement, “Sending people to prison for possessing marijuana has upended too many lives and incarcerated people for conduct that many states no longer prohibit. Criminal records for marijuana possession have also imposed needless barriers to employment, housing, and educational opportunities. And while white and Black and brown people use marijuana at similar rates, Black and brown people have been arrested, prosecuted, and convicted at disproportionate rates.”

Tilray’s announcement on Monday said that following “federal legalization in the U.S., Tilray plans to take full advantage of its strategic infrastructure, operations and consumer loyal brands across beer, spirits, and snack-food categories to parlay into THC-based products and further expand its commercial opportunities.”

The acquisition also helps Tilray expand its collection of alcohol brands.

In the announcement on Monday, the company said that Montauk, billed as the “the #1 craft brewer in Metro New York,” “joins Tilray’s growing U.S. beverage-alcohol segment, which already includes SweetWater Brewing Company, the 10th largest craft brewer in the nation with distribution across more than 40 states, the Alpine and Green Flash iconic Southern California brands, and its leading lifestyle bourbon and spirits brand, Breckenridge Distillery.”

Montauk “has enormous potential to expand its customer base and grow throughout the U.S. as a true national brand,” Tilray said in the press release.

The announcement said that Montauk Brewing, SweetWater Brewing, Green Flash and Alpine now serve as “the cornerstones of Tilray’s coast to coast craft beer segment and further strengthens the Company’s net revenue.”

In addition to the acquisition of Montauk Brewing, Tilray said that it is also appointing “veteran beer and beverage industry executive Ty H. Gilmore as President of Tilray’s U.S. beer business, a newly created position.”

“We are excited to welcome Montauk Brewing’s founders Vaughan Cutillo and Eric Moss, as well as Terry Hopper, Montauk Brewing’s General Manager, to the Tilray Brands family and I look forward to working closely with Ty Gilmore to maximize the performance of our enormously powerful craft and lifestyle beverage brand portfolio,” Simon said in the press release on Monday.

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Canada-based cannabis company Tilray Brands, Inc., announced on July 19 that Tilray Medical has launched a new platform called WeCare-MedicalCannabis to provide education about the benefits of medical cannabis. The WeCare-MedicalCannabis website launched with tabs available for patients, caregivers, and healthcare professionals to seek out information about medical cannabis.

Tilray Europe Managing Director Sascha Mielcarek released a statement along with the announcement, expressing the need for a clear source for information. “As global pioneers in medical cannabis, we are aware of the lack of access to science-based, medical cannabis education,” Mielcarek said. “WeCare-MedicalCannabis was created to bridge that gap and help provide the needed resources to helping patients, caregivers, and healthcare professionals with the information they need to make informed decisions on medicinal cannabis. As cannabis legalization continues to expand across Europe, Tilray Medical is dedicated to help provide informed and trusted guidance for those interested in learning more about medical cannabis.”

The website organizes these resources in a “who, what, when, where, how, why which” format in order to address and organize the information. Everything from the history of medical cannabis to evidence that showcases its unique properties and recommendations on how to consume is available. “WeCare-MedicalCannabis provides science and research-based cannabis content tailored to healthcare professionals, caregivers, and patients to help them make informed decisions about medicinal cannabis and assists them along their path to discovering how medicinal cannabis can support daily wellness and health,” the Tilray press release stated.

WeCare-MedicalCannabis provides information based on four European markets: France, Germany, Portugal, and the United Kingdom.

“Medicinal cannabis is not something new. It has been used for thousands of years. But we realize that for many people, whether patients, caregivers, physicians, pharmacists, or other healthcare professionals, it is something new, potentially confusing, and even concerning,” the WeCare-MedicalCannabis website states. “The WE CARE platform was developed to become the most trusted and respected resource on the Internet for questions about medicinal cannabis. Whether you are just learning about medicinal cannabis, or if you already have a foundation of knowledge, this website can serve as your one-stop resource for further insights about many aspects of medicinal cannabis.”

Tilray is one of the largest cannabis companies in the world, and the first company in Canada to export medical cannabis to the U.S. for use in clinical trials in 2018. Over the past five years, Tilray has continued to grow exponentially. Tilray Medical in particular recently expanded its medical cannabis product portfolio for the U.K. in June. As of July 12, the company had just announced the closing transaction for its acquisition of Hexo Corp.

Tilray CEO, Irwin Simon, was featured in the High Times 100 of 2021 for his 30 years of experience leading in consumer packaged products. Earlier this year in April at the Benzinga Cannabis Capital Conference, Simon made a bold keynote speech about Tilray’s current footprint in Canada. “Tilray will own Canada. It’s the largest in Canada today, and it will get bigger,” he said. “This is an industry that is three-and-a-half years old and because cannabis is not legalized in the U.S, you can’t bring in the institutional shareholders (…) and I love retail shareholders. Today they are probably about 80% of the shareholder base of Tilray. We’ve traded 25, 30 million shares today. If I was on the Canadian Stock Exchange I might have traded 200,000 shares today. This industry is going to continue to take off.”

Education has been a paramount concern across the world, and states in the U.S. such as New York have also recently launched an effort to provide information to consumers. The Cannabis Conversations campaign brings attention to driving while impaired, tools for parents, and much more. “Education is the best tool to keep New Yorkers healthy as we continue to ramp up this safe, inclusive, and equitable industry,” said New York Gov. Kathy Hochul.

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For those watching the swing of European states into the pro cannabis column, the developments in Portugal have been a source of both optimism and frustration for the past several years.

The production of cannabis for medical export purposes was initiated by Tilray as they looked for a country more open to cannabis cultivation than Germany in 2017. Since then, commercial cultivation and extraction has blossomed domestically. Indeed Portugal is now seen as one of the most important feeder countries for the German medical cannabis market.

As a result of this as well as the general tolerance of cannabis in the country, the legislature was widely expected to introduce and pass formal recreational reform legislation late in 2021 or at the latest, by early this year. However, the issue stalled when the sitting government failed to pass the 2022 budget and a snap election was called for the end of January. The swearing in of the new Parliament was also delayed by a month and a half due to controversies that arose from the counting of overseas ballots.

In such an environment, cannabis reform is not going to be the priority.

European Cannabis Reform Is a Zeitgeist Topic

However, those advocating for reform have not just gone away. Further, it appears that as of this summer, the prioritization of legalization has re-entered the political room.

The Left Bloc party, one of the political groups that helped bring about the fall of the old government by voting against its budget, is renewing its calls for cannabis legalization—even if it is of the personal, home-grow variety. However, they also are expecting support from the ruling Socialist Party in going a bit further than this—namely the establishment of a formal industry.

According to Left Bloc member Catarina Martins, “One year ago this week the initiative of the Left Block was debated in the parliament: the legalization of cannabis. As you know, this process did not come to an end.” The party believes that this is the time to push for reform because of a collective agreement amongst elected officials (if not Portugal, traditionally beyond this) that Prohibition has never worked.

“To defend public health is to end hypocrisy,” said Martins. “And we believe that there are now all the conditions to end this hypocrisy in Portugal. We know that there are so many people, on all sides of the parliament, which have already realized that the hypocrisy of prohibition has been a way of putting young people at risk.”

Further, in what seems to be a page out of the developments in Austria right now, the Left Bloc is pressuring their colleagues to pass this reform based on the principal of personal freedom.

Serious Momentum or More Stalling in Portugal?

For those following the political particulars on the ground, this is apparently the beginning of a new domestic momentum to finally pass meaningful legislation. This is the case because of Portugal’s history on drug use. The country infamously decriminalized the personal use and possession of all drugs in 2001 (which as a byproduct also influenced the Oregon decriminalization measure in Oregon in 2020).

The legitimacy of this call for legalization may also sound a bit strange to foreigners because of who is pushing for the reform to progress. The Left Bloc party is a product of the merger of several groups on the left side of the political discussion including the Marxist People’s Democratic Union, the Trotskyist Revolutionary Socialist Party, and Politics XXI.

Mention the word “socialist” much less terms like “Marxist” or “Trotskyist” in any political debate in the United States, and one is laughed out of the room.

This is, of course, also quite different in Portugal, where the party has elected members in the national legislative body.

While the constituent parties that have made up its base sound radical, particularly to Americans, the party also has a reputation as the country’s largest supporter of women’s and gay rights, with a strong civil liberties platform that takes vocal stands against racism. In Portugal at least, they are seen as “socially libertarian.”

“Controlling the risks and putting an end to hypocrisy is public health policy and this is also the commitment that the Left Bloc is making in a month in which we celebrate the 20th anniversary of the national strategy to combat drugs,” said Martins.

It will, as a result, surprise nobody watching this discussion, even outside of Portugal, especially considering Germany’s decision to legalize recreational use this year, if Portugal does the same this year—even, despite all the delays, beating Deutschland to the punch.

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Ever since Tilray decamped for Portugal during the early days of the German cannabis cultivation bid circa 2017, the country has been touted as “the place” within the European Union (EU) for the German distributors to source their product.

That said, the actual progress of the industry has been a little slower than that—in part because of the length of time it takes for legislative change to happen. Indeed, it was not until April 15 of this year that Ministerial Order No. 83/2021 was finally published. According to local legal practitioners, at least, this order also has clarified a great many practical aspects of the application process. This includes reference prices.

Looking at the progress of cultivation licenses, however, and the proof is in the pudding. To date, there have been 114 applications for the cultivation of cannabis to the National Medicines Agency (Infarmed). Of these, just 23 are “under analysis,” 11 are awaiting a response from the cultivators, and 61 are waiting to be inspected (a major issue facing almost every budding cannabis cultivator thanks to COVID.)

Here are a few more dampening statistics. Of the 19 currently operational cannabis cultivation facilities, only three can manufacture medical grade extracts and products. One of these is in business solely for the purposes of providing “quality control.” The remaining facilities are in business to cultivate the plant as a “raw material,” or, of great interest of course to every German distributor looking for new sources of EU cultivated product, “active substances.”

What, exactly, is going on?

EU GMP Is Not an Easy Certification

Despite its reputation to the contrary, including the now pending legislative move to formally legalize adult-use cannabis, the medical authorities here are very strict. They must be. They are the country’s version of the Federal Drug Administration (or FDA).

Indeed, it was only this February that Tilray announced that it had received the first and only market authorization for medical cannabis products in Portugal. This means that everyone else is cultivating for export to other countries (notably Germany). Many German distributors (for starters) are currently importing raw flower (or flos) as “Active Pharmaceutical Ingredients” or APIs. There is clearly a market for the same.

Getting a medical license also takes capital. And it is also very clear that Portugal is also not the only game in town. Greek, Macedonian and, as of this year, African cannabis is also starting to enter the room.

Further, while there is a great deal of enthusiasm, generally, about the coming cannabis revolution on the recreational side, the medical game remains, as always, a difficult nut to crack, even after the capital has been raised. This is not always a popular task to take, but it is clear that when the dust clears, Infarmed is not interested in being just a pass-through agency.

According to Rob Smallman, a highly experienced Canadian cultivator who has been involved in multiple European projects, including in Portugal, “experience and a focus on the actual business in the room is a far better strategy than just satisfying investors.”

Michael Sassano, CEO and founder of SOMAI Pharmaceuticals as well as the recent recipient of an innovative product grant by the Portugal 2020 committee, concurs. “Cannabis entrepreneurs need to know exactly what they are doing to succeed and receive full certification,” he said. “Medical cannabis growing, and manufacturing requires more than just a lot of capital. It requires deep knowledge of regulations and GMP standards plus serious knowledge of the cannabis plant to surpass timely building, operational, and international sales goals.”

Portugal 2020 is a partnership agreement between Portugal and the European Commission to fund policy goals of interest to both member states and the EU as a whole.

Domestically, however, there is another catch. In a land known rather infamously if not accurately as “anything goes,” on the “illicit drug” front, cannabis as medicine is just as foreign here as it is everywhere else. Not to mention, just like everywhere else, medical cannabis is very expensive. The monthly price tag of about $600 is out of reach to most, if not many.

What Impact Does Pending Recreational Reform Mean for Portugal?

There are several answers to this question. The first and most obvious one is “nothing” since Infarmed only regulates a medical market, not a broader consumer one (more like BfArM in Germany than the FDA in the United States).

However, this is also not the only answer. Forward reform of Portugal’s legislative approach to recreational reform has repeatedly stalled, even as both Switzerland (outside of the EU) and Luxembourg (within it) have progressed.

There is of course this twist. Just like the Czech Republic (and Switzerland) have now started to discuss (and Holland has been in the midst of the same since 2017 when Dutch insurers stopped covering the drug the same month the German Bundestag or Parliament, voted to cover it under Deutsch public health insurance), the entire discussion of “medical” cannabis is coming under scrutiny. Particularly for domestic use, rather than foreign export.

This is a simmering issue. But it is bound to stay in the room, particularly given the advance of overall cannabis reform across Europe.

In the meantime, it is clear that Portugal is proving to be a stringent port of call for all things medically cannabis related—and far from just a pass-through cultivation or extraction state.

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