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Medicinal cannabis company Cannatrek Limited today announced it has entered into an exclusive agreement with Chemist Warehouse, Australia’s largest pharmacy chain, to supply medicinal cannabis products and services to treat illnesses including pain, inflammation, anxiety and insomnia.
Chemist Warehouse is Australia’s largest pharmacy chain network by total sales, with more than 450 stores in Australia and New Zealand under the Chemist Warehouse and My Chemist banners. Chemist Warehouse has over $6 billion of Australia's $16 billion retail pharmacy market.
Under the agreement, Cannatrek will work with Chemist Warehouse to develop and bring new products to market, including low-dose cannabidiol (CBD) products on an exclusive basis under one of the Chemist Warehouse brands.
Scheduling is a national classification system that controls how medicines and poisons are made available to the public. Medicines are classified into Schedules by the Therapeutic Goods Administration (TGA) according to the level of regulatory control over the availability of the medicine. Presently, patients can only access Schedule 8 and Schedule 4 medicinal products through a script from a doctor or specialist under the SAS-B approval system or from an Authorised Prescriber, however these products can now become available over-the-counter to the public in 2021 through a pharmacist, with the recent decision by the TGA to down-schedule certain low dose CBD preparations from Schedule 4 (Prescription Medicine) to Schedule 3 (Pharmacist Only Medicine).
Cannatrek’s agreement with Chemist Warehouse covers Australia and New Zealand, but may be expanded to include stores in China, Ireland and other countries where Chemist Warehouse operates. Under the agreement, Cannatrek will also train and educate Chemist Warehouse pharmacists about the benefits, any potential issues and applicability of medicinal cannabis products for a range of illnesses including, but not limited to pain, inflammation, anxiety and insomnia.
Under the agreement, Cannatrek intends to install iPads or similar devices in Chemist Warehouse stores to provide an instant touchpoint to consumers’ enquiries about their eligibility to access medicinal cannabis. Cannatrek will also become Chemist Warehouse’s exclusive telehealth partner for medicinal cannabis, working alongside their current general telehealth partner, Instant Consult.
Tommy Huppert, Cannatrek CEO, said the agreement with Chemist Warehouse represented an exciting evolution in the growing medicinal cannabis industry, and was a game-changer for both Cannatrek and Australian consumers. “We are thrilled that Chemist Warehouse has seen the value in entering a strategic partnership with Cannatrek as its medicinal cannabis partner,” he said. "It means that not only will we provide Chemist Warehouse with low-dose CBD products to be sold to consumers over-the-counter given the recent decision by the TGA, but we will work with them to develop new products. The ultimate winner will be Australian consumers, who will get access to high-quality medicinal cannabis products via a visit to Australia’s largest pharmacy chain, which has Australia-wide distribution.”
Mr Huppert said his company would continue to educate Australian doctors about the benefits and limitations of medicinal cannabis. “We will continue to run education programs in Australia together with our partners including Chemist Warehouse. This is all about raising the comfort factor among doctors and specialists in Australia, to make medicinal cannabis more mainstream and available to patients.”
Jack Gance, Chairman and Co-Founder of Chemist Warehouse, said the partnership with Cannatrek was an important step for his organisation. “We are firm believers that the creation and dispensing of over-the-counter medicinal cannabis products is a natural progression for Chemist Warehouse. Low-dose cannabidiol (CBD) is used to address conditions such as stress, pain, anxiety and insomnia. I am delighted that the TGA has agreed to allow CBD to be sold overthe-counter in a controlled environment via pharmacies. Unfortunately, CBD’s reputation has been tarnished over the years. Importantly, CBD has medical properties without the level of psychoactive properties of Tetrahydrocannabinol (THC). We are delighted to be able to be leaders in this area, selling therapeutic CBD over-the-counter in our pharmacies. Our goal is to be able to provide the best, safest and best priced medications to help our loyal customer base.
“We have seen what has been happening in this space in the USA and Canada; it is important that we partner with a reliable medicinal cannabis producer with whom we can work to develop new products. We are excited to be partnering with Cannatrek as they are one of the leaders of the fast-growing Australian medicinal cannabis industry. Estimates are that there are upwards of 1 million eligible patients in Australia. It is important to us and our customers that we sell, where possible, Australian-made products. Cannatrek is currently growing product at scale under permit at its facility in Brisbane and will dramatically increase production from its proposed facility in Shepparton, Victoria. Cannatrek represents a reliable supply partner for us, and we hope to sell its products into other countries in the future.”
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ANTG was founded in 2015 by former Corporate Travel Management chief operating officer Matt Cantelo, after he had seen first hand the health and socio-economic benefits of legalising medical cannabis in Denver, Colorado, while working in the region.
Mr Cantelo told The Australian Financial Review this deal was more than two years in the making – pre-pandemic travel restrictions – and represented a significant milestone not just for the company, but the local industry.
"We flew to Germany and got to know Cannamedical Pharma's CEO David Henn and realised he had similar values. In the next six months, he flew to Australia and inspected our site before we finished construction and gave us advice on how to be Good Agricultural and Collection Practices (GACP) and Good Manufacturing Practices (GMP) approved.
"At the time there wasn't anyone certified under that regulation in Australia and David helped us build this facility to full GACP European standards, as well as Australian standards, and that put us in good stead to sell dry flower to Germany.
"We are the first local growers to crack the EU market, which currently receives the majority of imported products from Canada and The Netherlands."
Without GACP certification, growers can only export oil or other secondary products in Germany.
Germany is the third-largest market for medical cannabis, behind the US and Canada.
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Australia has broken into the European medicinal cannabis market with the first batch in a decade-long, multi-million deal on its way to Germany.
The $92 million export agreement marks the start of a trade partnership with the region, which is forecast to become the world's largest legal market.
Health Minister Greg Hunt says Australia is poised to become a recognised leader in the global supply of the highest quality medicinal cannabis products.
"Australia's gold-standard regulation of medicinal cannabis products, coupled with a premium agricultural and manufacturing industry, means we are well positioned to become a preferred supplier," Mr Hunt said on Thursday.
"This has the potential to create jobs and boost economic growth in Australia as we look to new and different export channels."
The 10-year deal will initially see about two tonnes of locally grown and dried cannabis flowers shipped over the next 18 months.
"This is a major win for the industry in Australia," Australian Natural Therapeutics Group chief executive Matt Cantelo said.
"While the German cannabis industry is still in its infancy, it is (already) the third-largest market globally behind the US and Canada".
ANTG are the first local growers to crack the EU market, which currently receives the majority of imported products from Canada and The Netherlands.
"Now that we have the gold standard in growing and manufacturing medicinal cannabis - in line with the most stringent in the world - it means our product also qualifies for export to every other nation," Mr Cantelo said.
The market for medicinal cannabis in Germany is expected to grow rapidly in the next decade and reach $12.4 billion by 2028, according to ANTG.
Mr Cantelo said Australia's tough regulatory framework had set the local industry up as the best in the world.
"Australia also has the reputation and climate for growing excellent produce in general - it makes sense that we would produce the highest quality, non-irradiated medicinal cannabis product as well," he said.
Federal parliament in June passed legislation authorising the export of medicinal cannabis and hemp into more overseas markets.
It gives farmers access to export opportunities in Southeast Asia, China, Canada and the lucrative US market, along with Europe.
The new laws also mean Australia will be able to certify legitimate exports of narcotic products, helping producers export to countries and regions that need government approval, such as the European Union, which holds the strictest regulations on imports.