Italian Ministry of Defense Tender Update

Update on Italian Ministry of Defense Tender and Media.

On the 18th of June 2019, the Italian governments Ministry of Defense (MOD) announced a new tender for the supply of 400kgs of medicinal cannabis estimated at US$1,700,000 to supplement what the country is currently cultivating.

The MOD called for three lots in the tender of medical cannabis and defined the quality and amount of supply. Bidders were able to submit their offers for a single batch or all of the following batches:

  • Lot 1 - dried cannabis flowers with high content of THC (320 kg);
  • Lot 2 - dried cannabis flowers with similar content of THC and CBD (40 kg);
  • Lot 3 - dried cannabis flowers with high content of CBD (40 kg).

The main technical requirements to participate:

· the pharmaceutical production of cannabis must be made exclusively using plants reproduced by agamic reproduction systems to ensure maximum uniformity and standardization of the products obtained;

· starting material must be cultivated and harvested according to the Good Agricultural and Collection Practice (GAPC);

· starting material must not be treated with a pest control product (pesticides and /or fumigants);

· active substances must be manufactured by a licenced producer according to EU GMP Guidelines;

· the product must comply with the general monograph of the European Pharmacopoeia;

· if cultivated in a third country, the product must be imported in the EU by an authorized company responsible for conducting tests and batch certification of the imported products in the EU.

Medicinal Organic Cannabis Australia (MOCA) participated in the tender and was the only non-Canadian company involved, and only one of four companies that passed the stringent interrogation to proceed into the final round of selection.

The four companies reviewed by the Italian Military were Tilray, Medicinal Organic Cannabis Australia (MOCA), Aurora and Canopy Growth.

Tilray is a Canadian pharmaceutical and cannabis company, incorporated in the United States with primary operations headquartered in Toronto, Ontario. Tilray also has operations in Australia & New Zealand, Germany, Portugal, and Latin America. https://www.tilray.com

Medicinal Organic Cannabis Australia (MOCA) is a privately held Australian based company with offices in Sydney and Auckland. The Company is developing a CBD cultivation network in Italy and THC cultivation facility in New Zealand. https://www.medicinalorganiccannabis.org/

Aurora Cannabis Inc. is a Canadian licensed cannabis producer, headquartered in Edmonton. It trades on the Toronto Stock Exchange as ACB. As of late September 2018, Aurora Cannabis had eight licensed production facilities, five sales licences, and operations in 24 countries. https://www.auroramj.com

Canopy Growth Corporation, based in Smiths Falls, Ontario, by April 2019, Canopy was the world's largest cannabis company, based on the value of all shares, or market capitalization. At that time, Constellation Brands Inc. controlled over 35% percent of the company, which had approximately 3,200 employees and is valued at over US$18 billion. https://www.canopygrowth.com

As a finalist in the tender, MOCA proceeded to the final review with the Italian Military. The three Canadian companies each relied on their own cultivation to win the tender, whilst MOCA was able to work with its international networks.

During the final round of the Tender and in grading their submissions, the Ministry of Defense said:

· Canopy Growth failed to satisfy requirements for the microbiological testing of products.

· Tilray submitted parts of its application after the closing of the tender window and failed to provide adequate documentation necessary to supply active substances.

· Medicinal Organic Cannabis Australia, on the other hand, contacted the Ministry and decided not submit the relevant paperwork based on the commercial reasons itemized below.

Medicinal Organic Cannabis Australia (MOCA) had three opportunities to meet the technical requirements, considered the most stringent on the planet. The three supply options in MOCA’s tender where;-

1. A cultivation partner in Canada, with a GMP certified cultivation facility that however lacked a GMP certified importer in Europe that could fulfil the requirements of the MOD in the time frame specified.

2. The second option available to MOCA was a partner based in Italy for Lot 3 (CBD). This partner was able to meet all the criteria except for the GMP Gamma Irradiation of the cannabis within the deadline of the MOD Tender.

3. The third option available to MOCA was its cultivation partner in Northern Europe, a solution that met all the technical specifications set forth from the MOD for all three lots. MOCA made a commercial decision not submit this option as the northern European partner did not meet the price point required for the Tender. This option was not a commercially viable business choice for MOCA, even though it did meet the entire requirements for GMP.

The winning bid for the tender came from Aurora Cannabis. According to the MoD, the state will pay the following prices for the supply of Aurora’s cannabis:

· Lot 1 - €1.78 per gram for 320 kilograms of high-THC flower, representing a 55.5% discount on the original proposed price.

· Lot 2 - €1.29 per gram for 40 kilograms of THC/CBD-balanced flower, representing a 57% discount on the original proposed price.

· Lot 3 - €1.77 per gram for the third lot of 40 kilograms of high-CBD flower, representing a 41% discount on the original proposed price.

At the beginning of last year (2018), the Ministry of Defense launched a similar tender for the supply of a stock of medical cannabis (for a total of 100 kg) to the MOD via the Florence Pharmaceutical Chemical Plant. This tender was awarded Aurora Cannabis Inc. together with its German subsidiary (Aurora Deutschland GmbH), which offered an average of EUR 3.2 per gram. Aurora has roots in Italy, having won a contract to supply the MoD in 2018. It supplied 100kg of dried flower imported from Canada through its German subsidiary Pedanios.

MOCA is extremely pleased with the opportunity to compete with the largest companies in the world and gained considerable professional expertise in the process.

The Italian Ministry of Defense tender generated considerable media for MOCA.

MOCA mentioned in these publications

MEDIA

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The MoD surprised the market in June by announcing a two-week open tender to supply medicinal cannabis, as it sought to address a shortfall in production at the Florence Pharmaceutical Chemical Plant.

https://prohibitionpartners.com/2019/07/17/aurora-wins-race-for-italian-medical-cannabis-tender/

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Aurora Cannabis ACB, -1.61% ACB, -1.35% was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://www.marketwatch.com/story/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multi-state-operator-2019-07-17

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Aurora Deutschland – the German subsidiary of Alberta-based Aurora Cannabis – won all three “lots” to supply Italy with a total of 400 kilograms (880 pounds) of medical marijuana over two years, the Italian government announced. But the award may come at a cost for the Canadian company: The average price it offered – 1.73 euros per gram ($1.94) – was less than half the tender reference prices and only slightly above the company’s latest reported average “cash cost of sales per gram of dried cannabis sold.”

https://mjbizdaily.com/aurora-sole-winner-of-italian-medical-cannabis-tender-but-average-price-is-low-by-most-standards/

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Aurora sole winner of Italian medical cannabis tender, but average price is low by most standards.

https://www.investank.com/news/detail/316133?from_channel_id=37

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https://www.reddit.com/r/weedstocks/comments/ce0ulk/aurora_sole_winner_of_italian_medical_cannabis/

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Aurora Cannabis ACB, +3.98% ACB, +3.42% was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://finfeeds.com/2019/07/17/cannabis-watch-cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator/

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Aurora Cannabis ACB, +3.67% ACB, +2.77% was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

http://stockinvestors.net/cannabis-watch-cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator/

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The average price it offered – 1.73 euros per gram ($1.94) – was less than half the tender reference prices and only slightly above the company’s latest reported average “cash cost of sales per gram of dried cannabis sold.”

https://freshcannatimes.com/aurora-sole-winner-of-italian-medical-cannabis-tender-but-average-price-is-low-by-most-standards/

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German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://weedmagnates.com/cannabis/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator/

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Cannabis stocks led higher by Curaleaf after company buys Chicago-based multistate operator

https://www.cryptomoneynew.com/2019/07/18/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator/

http://www.worldpronews.com/4964/1182/290/d2d088938995ab66e367b66c18fb4ba6fea5c7d0

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Aurora sole winner of Italian medical cannabis tender, but average price is low by most standards

https://hempifarm.com/best-medical-cannabis-cbd-oil-and-isolates/

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Aurora Cannabis (ACB.T) (ACB.T) was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported (link). Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://www.morningstar.com/news/marketwatch/20190718108/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator

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The prices Aurora offered for the tender suggest that the higher margins enjoyed in Europe by international companies won’t be the norm unless cultivators find a way to produce at substantially lower costs.

https://www.moneyworksmagazine.com/aurora-sole-winner-of-italian-medical-cannabis-tender-but-average-price-is-low-by-most-standards/

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The award criteria was the lowest offered price for each individual lot. Companies needed to qualify for their offers to be considered, something only Aurora achieved.

Five companies originally applied:

· Aurora (through its German subsidiary)

· Canopy (through its German subsidiary)

· Medicinal Organics Cannabis Australia

· Tilray (through its Portuguese subsidiary)

· Wayland (through its Italian subsidiary)

https://www.ethnopharmgroup.com/news/aurora-sole-winner-of-italian-medical-cannabis-tender-but-average-price-is-low-by-most-standards/

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Aurora Deutschland – the German subsidiary of Alberta-based Aurora Cannabis – won all three “lots” to supply Italy with a total of 400 kilograms (880 pounds) of medical marijuana over two years, the Italian government announced.

https://mjbizdaily.com/aurora-sole-winner-of-italian-medical-cannabis-tender-but-average-price-is-low-by-most-standards/

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Aurora Cannabis ACB, -1.61% ACB, -1.35% was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://www.marketwatch.com/story/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multi-state-operator-2019-07-17

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It also appeared in the news, after its German subsidiary won the three lots to supply medical cannabis to Italy for the next two years. As reported by the Marijuana Business Daily news site. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://businessenligne.info/index.php/2019/07/17/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator/

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5 sociétés avaient originellement postulé pour l’obtention de ce contrat : Canopy Growth, Medicinal Organics Cannabis Australia, Tilray, Wayland, et Aurora. L’Italie avait indiqué que le critère d’attribution principal serait le prix le plus bas offert pour chaque lot individuel. Pour remporter ce marché, l’entreprise canadienne a donc dû faire des concessions. Aurora va ainsi vendre un gramme de cannabis à 1,73€ en moyenne, ce qui limitera très fortement sa capacité à dégager de la marge sur sa production.

https://www.newsweed.fr/italie-aurora-remporte-la-production-de-400-kilos-de-cannabis-medical/

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Aurora Cannabis ACB, +3.77% ACB, +3.63% was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://headtopics.com/us/cannabis-stocks-led-higher-by-curaleaf-after-company-buys-chicago-based-multistate-operator-6942693

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Aurora Cannabis ACB, +3.77% ACB, +3.63% was also in the news, after its German subsidiary won all three lots to supply Italy with medical cannabis for the next two years, as news site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.

https://www.deraktionaer.de/artikel/aktien/deutliche-erholung-bei-den-cannabis-aktien-aurora-cannabis-und-canopy-growth-wars-das-mit-der-korrektur-20188689.html?feed=ariva

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Aurora German subsidiary received all three heaps to produce Italy with medical hashish for the following two years, as information web site Marijuana Business Daily reported. Aurora was competing with Tilray, Canopy Growth, Wayland and Medicinal Organics Cannabis Australia.But the deal which includes 400 kg of hashish could value the Canadian firm as the typical worth of 1.73 euros per gram ($1.94) was lower than half the tender reference costs and solely barely above the corporate’s newest reported common “cash cost of sales per gram of dried cannabis sold,” Marijuana Business Daily reported.

https://talkmoneynews.com/cannabis-shares-led-larger-by-curaleaf-after-firm-buys-chicago-based-multistate-operator.html

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