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Canadian cannabis supplier Allied Corp has further expanded its foothold in Europe’s blooming medical cannabis industry, signing a new five-year forward purchase agreement in Poland.
It comes just weeks after it announced that the first batch of its Swiss-GMP manufactured crop had been launched in Switzerland, marking the third European market this product has been made available in this year.
While the influx of Canadian cannabis into the European market is nothing new, Allied Corp produces its product in Colombia, a country with a historically mixed reputation regarding the quality and consistency of its cannabis exports.
However, Allied Corp sees ‘enormous potential’ in the region, and hopes to be a leading force in shifting these perceptions.
Michael Moses, Allied’s Chief Business Development Officer, told Business of Cannabis: “Things are shifting. The stigma surrounding Colombian cannabis is fading, and we like to think that we’re contributing to this shift.”
“We’re now producing excellent genetics consistently, with monthly harvests, and our team has been impressed by the quality of our greenhouse-grown products. If you can hit the kind of margins we have with consistent, high-quality output, Colombia has enormous potential in the market.”
European expansion
Last week, Allied announced what it called a ‘major milestone in its international expansion’, having signed an exclusive multi-year supply agreement with Polish distributor Canpoland Spółka Akcyjna (Canpoland) worth an estimated €15m over 5 years.
This will see Allied supply 1.05 tonnes of ‘premium Colombian-grown cannabis flower’ annually to the flourishing Polish medical cannabis market, through Blossom Genetics (“Blossom”), its EU-GMP processing and manufacturing partner in Portugal.
It will also see the exclusive launch of three proprietary genetic strains, each of which will contribute 350kg per year supported by minimum quarterly orders to meet the rising demand in the market.
Last week, Business of Cannabis reported that Poland is set to raise limits on the total amount of medical cannabis permitted to be imported this year from 6 tonnes to just over 11 tonnes to meet demand.
If approval to its dossier is granted, Allied expects to deliver its first shipment in the third quarter of 2025.
The news came just weeks after Allied announced the launch of its GMP-certified cannabis flower into Switzerland through local partner PhytoXtract SA, seeing it strengthen its foothold in another exciting European cannabis market.
This marked Allied’s expansion into its third leading medicinal cannabis market this year, having signed a long-term agreement with off-takers in the UK and Australia in Q1. Allied is already executing on the first shipments as part of these agreements.
EU-GMP processing in Portugal
After being set up by co-founders Calum Hughes and Paul Bullock in 2019, the company embarked on a three-phase process to reach commercial activity.
“The first phase was site identification and setup. It’s important to note that Colombia is not uniform in terms of climate. Many people assume that any part of Colombia is good for growing cannabis, but the country has numerous microclimates,” Mr Moses explained.
Once a site was identified, the next phase saw Allied build out their infrastructure and secure the necessary licences.
Having obtained licenses for import, export, cultivation, and processing by the local authorities, the company became among the first in Colombia to legally export cannabis flower, beginning with CBD, in 2022.
“At one point, Colombia issued around 930 cannabis licenses, but in 2023, there were only approximately 57 active licences in the country, including around 30 psychoactive ones. Many companies didn’t survive, and a lot of investment in Colombia didn’t lead to success,” he continued. “Allied, among other producers, are still around and exporting, working together to positively change the Colombian perception across medical markets.”
In 2023, the company began shifting its focus towards commercial growth, identifying key target markets, sales strategies and establishing supply routes, including channel partners to enable its product lines.
“Even though we’re not yet GMP certified, we have our Colombian GAP/BPA certification, which has been widely accepted with equivalency to EU-GACP after several audits. This hasn’t stopped us from exporting and working with certified partners in Europe and Australia. Meanwhile, we are working towards our own full EU-GACP and GMP certifications.”
This strategy sees Allied export its cannabis flower to Portugal, where it is processed by EU-GMP certified partner Blossom Genetics, before eventually being exported elsewhere in Europe. Allied has a similar partnership with PhytoXtract in Switzerland.
Through these partnerships, among others, Allied is able to offer extracts and flowers to European markets and import flowers into Australia.
European opportunity
Mr Moses believes that Allied’s ability to produce cannabis at a far lower cost than the increasing number of Canadian and other international producers looking towards Europe’s medical market to shore up their margins is set to put Allied and other Colombian producers ahead of their competition in the long-term.
He explained that the ‘particularly exciting’ and rapidly expanding European medical cannabis market will enable the company to secure a consistent and stable cash flow, as patients require a reliable source of product.
“In contrast, the recreational market tends to be more variable, where customers frequently switch between products.”
“For Europe, we’re seeing the market grow with more countries coming online.The Colombian climate and location within Mesa de Los Santos offers the opportunity for rolling-harvests year-round and high-margin production.”
Allied’s ability to produce cannabis consistently at scale and at a much lower cost will be key in the coming months, he believes, as the European market endures natural price compression.
“For European and Canadian growers, the challenge lies in sustaining their costs as price compression continues. Many Canadian LPs are struggling by selling at a loss, and some of our clients in Australia have raised concerns about the sustainability of their Canadian suppliers.
“The craft and premium segments may have more resilience in this market, but the key question remains for others: how long can they endure this price compression?”
“For us, being in Colombia with our Canadian expertise and demonstrated success in production, puts us in a strong position. We can weather price compression, and thanks to our margins, it doesn’t take much for a Colombian company like ours to become cash-flow positive. This is our focus”
“}]] Canadian cannabis supplier Allied Corp has further expanded its foothold in Europe’s blooming medical cannabis industry, signing a new five-year forward purchase agreement in Poland. Read More
