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CLICK HERE to access the replay of our Speaker Call |
We are very excited to have hosted a call with the CEO of Akanda Corp, Tej Virk. Akanda is an international medical cannabis platform company headquartered in London. Akanda's mission is to provide high-quality medical cannabis products to patients throughout the EMEA region - Europe, the Middle East and Africa. The company is vertically integrated across the supply chain with a “seed-to-patient” model that includes a powerful set of assets that was assembled in a short amount of time. These include a GACP qualified cultivation campus in the Kingdom of Lesotho in Southern Africa; a Portugal-based cultivator, manufacturer and distributor with a prized EU GMP certified indoor grow facility; a UK-based fully licensed pharmaceutical importer and distributor that supplies pharmacies and clinics within the UK; and partnerships with one of the first fully digital pain clinics in the UK and other third parties for bringing medical cannabis to Europe. With these resources in its portfolio, the company aimsto meet the growing demand for medical cannabis and with the ability to hyper-scale for adult-use markets as regulations evolve.
Through the recent acquisition of Holigen, Akanda gains two key operating facilities in Portugal and direct market access to Europe, specifically large emerging markets such as Germany as well as the UK. Holigen’s facilities include a 20,000 square foot indoor EU GMP certified grow facility located near Lisbon (in Sintra) dedicated to the cultivation designed to produce two tonnes of high-THC premium 1P cannabis annually and to toll another eight tonnes of 3P cannabis annually via its manufacturing capacity, as well as a large seven million square foot (180+ acres) outdoor facility located two hours south in Aljustrel. The acquisition comes with more than 300 kilograms of high-THC premium medical cannabis in current inventory that Akanda is actively marketing to buyers. Akanda also gains Holigen’s genetics library, consisting of over 40 strains. Overall, Holigen advances Akanda’s goal of becoming a leading 1P/3P platform in the EMEA region and sets it up for accelerated growth and profitability.
Topics we discussed:
- The European opportunity
- The current growth strategy of Akanda
- How does the acquisition of Holigen shape the future of the company?
- Current revenue drivers across the different
- Costs of production
- The road to profitability
EUROPE IS LARGE, AND MOVING FORWARD
We believe that Europe is the next frontier of cannabis, estimated to be $37 billion by 2027, driven by Germany, the UK, and France. Just last week, the justice minister in Germany said that he wants to push legalization up to 2023, whereas it was anticipated to come out in 2024. We still think it is more likely to be a 2024 program, but there seems to be tremendous pressure in the German market to launch adult-use sales. Currently, the medical market in Germany is small, with about five or six other players participating in that marketplace. The UK market seems to be growing even faster than the German medical market. Still, the German market overall is expected to be approximately €12 billion - more significant than California and Canada put together. At this rate, there is a chance that cannabis will become federally legal for adult use in Germany before the United States and other European markets such as Portugal could be right behind. The UK medical market is anticipated to be about a $1.3 billion market in two years. As of December 2021, Malta became the first European country to legalize recreational cannabis fully. Three other countries have also started the process towards legalization, and several others are expected to legalize in the next few years, namely:
- Germany
- Portugal
- Luxembourg
- The Netherlands
- Spain
- Switzerland
- UK
On average, 1 in 10 Europeans uses cannabis every year. With little legality for recreational cannabis, this high demand has to be met by the illegal market. As a result, yearly illicit cannabis market sales are estimated at around €11 billion (US$13 billion)—representing significant untapped potential.
