Johnny Green: Green, Green Grass Of Rome

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From top Aurura cannabis products; Johnny Green

Last week we introduced Tilray who it was just reported had been lobbying the government for its license for over a year, according this piece….

While Tilray have had certain cannabis oils approved, the group had been building relationships with the Irish government over the last 12 months and other producers will likely experience challenges in getting their product to market .

Regarding the questions about Irish market size a recent report estimates it could be at full maturity a market worth 2.3 Billion,which somewhat explains the intense lobbying efforts by Aurora,who last week won a tender to supply medical cannabis ‘flower’ to the Italian government.

This week we are going take a look at Aurora and the Italian tender as it gives us some great pricing benchmarks.

The Irish Times in April this year outlined Aurora’s lobbying:

The company, which has 11 production sites in Canada alone, as well as operations in 24 countries internationally, has already held meetings with department officials, as well as the Health Products Regulatory Authority (HPRA).

No minutes, no records of who attended and its only from the media reports arranged and facilitated by Aurora,that we even know these high level meetings have being taking place, this further confirms the calls on here for an independent and transparent cannabis regulatory authority.

It is widely expected that this intense lobbying by ‘Peppermint Paddy’ will result in Aurora receiving a license, which we may or may not find out about, as we had to rely on Tilray, a public company’s press release to find out about their license.

This cloak and dagger nonsense is extremely disingenuous by the government and has created considerable confusion with when these products will actually be available and how much they will cost, Tilray has stated that it has shipped products, are they sitting in a warehouse somewhere…

Aurora is a Edmonton, Canada based cannabis company listed on the NYSE (ACB), the second largest shareholder if he exercises all his options will be current strategic advisor and activist investor, Nelson Petlz.

It was Peltz that fully exposed the fake empire built by Lord O’Reilly, forcing Heinz into a merger with Kraft . In Europe Aurora has decided to locate its headquarters outside Leipzig, Germany and was just awarded a cultivation and distribution license there, it also has a greenhouse growing facility in Denmark.

It was announced last week by the Italian government, that Aurora had won all three lots to supply the Italian Govt with 400 Kilograms (880) pounds of medical grade cannabis flower over 2 years.

In January 2013 Italy legalised medical cannabis and in 2014 the Defense Minister announced that the army would be exclusively growing it.

This approach is quite similar to the the cross-party support and kite flying for Bord na Móna to grow cannabis in Ireland, the outcome for Italy has been extremely disappointing.

The army has repeatedly failed to meet govt output targets,it also considered very poor quality and low grade cannabis.

The facility situated on military land outside Florence has the only license to grow cannabis in Italy, Italy has had to rely on very expensive imports from Holland to fill domestic demand.

National consumption of medical cannabis is about 880 to 1,000 pounds a year according the military, with the military only able grow about 200 pounds a year.

The average price offered by Aurora was 1.73 euros per gram only slightly above the cash cost of sales per gram.

Aurora in a previous deal sold 100 kilograms to the Italian govt for 3.2 euros per gram and agreed in April to supply Luxembourg with 20 Kilograms for 2.5 euros per gram.

Aurora has reported cost of sales at about 1.40 per gram so this is not far above break even, Canopy and Tilray had also bid but lost out on technical grounds or paperwork issues and did not make it to the final round.

The pricing breaks down as follows, it’s just above cost andessentially Aurora is buying market share, Italy is a major European market for medical cannabis with a population of 60 million.

The decision to involve the govt (army) has been a failure as they have not been able to satisfy demand with a waiting list of 20,000 patients and should be a lesson for the Irish govt.

1.78 euros per gram for the first lot of 320 kilograms of high-THC flower, totaling 569,600 euros, a 56% discount over the tender reference price.

1.29 euros per gram for the second lot of 40 kilograms of THC/CBD-balanced flower, totaling 51,600 euros, a 57% discount over the tender reference price.

1.77 euros per gram for the third lot of 40 kilograms of high-CBD flower, totaling 70,800 euros, a 41% discount over the tender reference price. (

The Italian ‘green gold rush’ or cannabis light craze sweeping Italy since a law change to facility hemp production has been deliberately ignored, its basically junk or decaf weed.

It is however illustrative of the demand in Italy for recreational cannabis,even bad weed sells.

Italy by holding an open tender and publishing the pricing has laid out a path for Ireland, let’s hope the government follows this example.

The experiment with the army growing has been by any metric a disaster and perhaps some type of JV may be a better solution in Ireland with Bord na Mona.

The Roll Up column by Johnny Green will attempt to keep Broadsheet readers up-to-date on the growing cannabis industry worldwide. Follow Johnny Green on twitter for even more updates.

8 thoughts on “Johnny Green: Green, Green Grass Of Rome

  1. eoin

    “The average price offered by Aurora was 1.73 euros per gram only slightly above the cash cost of sales per gram.”

    A gram of saffron will cost you €10 in Tesco. What Aurora is doing in Italy looks like predatory pricing and it would be interesting to see what the EC Competition DIrectorate has to say.

    Fascinating though to see prices laid out like this. Why can’t Harris do the same in Ireland?

    1. Johnny Green

      That cost I used Eoin and hi, includes ALL weed grown by Aurora, its cost base for this weed is much higher, as my number includes non EU GMP grows.

      “Aurora will supply a minimum of 400 kg of medical cannabis over the two-year contract with the cannabis coming from its Canadian EU GMP certified facilities and imported to Italy through Aurora Deutschland, its wholly-owned European subsidiary. The cannabis will be sold to Agenzia Industrie Difesa (an agency of the Italian Ministry of Defense) for distribution to local pharmacies, who dispense directly to patients.”

      https://www.newcannabisventures.com/aurora-cannabis-selected-as-sole-winner-in-italian-cannabis-tender/

      Here is a tour of that army facility-costs 7 per gram, imported over 80 per gram.
      https://www.pbs.org/newshour/show/italys-only-medical-marijuana-producer-cant-keep-up-with-demand

  2. Cian

    Wow. So the Irish market has grown from €784 million on your first article on 18th June. To €1.5bn two weeks ago , to €2.3 Billion this week (according to “a recent report”). That is FG-scandal levels of inflation – are you looking to become Minister for Health?

    Each week I’ve questioned the amounts you share – specifically that they include both medicinal AND recreational (with recreational being the lions share – about 80%). At the moment in Ireland we are only talking about medicinal licences – so these numbers are all moot.

    1. postmanpat

      It’s Geldof/Bono math! million/billion tomayto/tomato. These articles are all tldr for my little stoned mind. The gist , I think, is evil money people in suits cornering a market and overcharging for a harmless substance that grows everywhere and was demonized, and still is, depending on the context. Look at that poor Cork fella in the USA who has to leave his family because of past convictions from an overzealous garda who should have been chasing real criminals instead. Ill stick to the illegal home grown thanks anyway Evilcorp or whatever your name is. Ill youtube a ‘how to’ remove the THC and still keep the seizure control benefits if I ever have to administer to a loved one who is suffering, and thank god don’t have to.

    2. Johnny Green

      -“Research conducted for The European Cannabis Report™ 4th Edition reveals a fully mature Irish market could be worth €2.3 billion annually”-
      link to report and its free.

      https://prohibitionpartners.com/reports/#european-cannabis-report-fourth-edition

      Cian I appreciate and welcome your comments,but I have been using 1 Billion,its in FG’s interest to dismiss this as merely a few kids who are resistant to conventional drugs, so what’s all the noise about.
      The reality is it’s a potential multi billion market with a completely incompetent minister in charge who hasn’t a clue, why is he meeting in secrecy with all these companies, why are no minutes kept, why do we have rely on the companies press releases and PR dept’s to find out about all this lobbying….

      1. Cian

        Johnny, firstly thanks for including the link.

        Secondly, you still are missing my point. At the moment Ireland is only talking about medicinal cannabis. You keep talking about medicinal and recreational. There is a massive difference.

        You may be correct in what you are saying about the various companies/meetings.

        1. Johnny Green

          -it was included above:)
          No Cian,everyone in the cannabis industry fully expects the EU to legislate for rec in next few years, its just going happen,in my opinion Italy will be the first,the tax and estimated impact on economic activity is just too large ignore.At one point Italy was the worlds second largest hemp producer,they have by far the best in the wold extraction techniques due to olive oil,Italy could become a major player in the EU weed space, if the govt got out the way !

          “We created an awesome phenomenon,” said Luca Marola, who is widely credited with kick-starting the cannabis-light boom, thanks in part to extensive media coverage of his company, Easyjoint Project. As of February, he said, he had sold 17,000 kilograms, over 37,000 pounds, of flowers — a project that Mr. Marola, a longtime activist for marijuana legalization, calls a “form of civil disobedience.”

          https://www.nytimes.com/2018/04/21/world/europe/italy-cannabis-flowers.html

    3. V

      Ah calm down Cian

      Even if that 2.3 billion is 50% off
      It’s still a billion euro industry
      Start looking up and ahead for once
      All this eyes down looking for stones to throw
      At anything that paases
      Makes you look more and more like the village simpleton

      I have an awful feeling now that we know each other from back in the CH.com early days

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