Cannabis and corporate finance and banking industry executive Tej Virk recently joined African medical cannabis company Akanda as CEO, where he will be leveraging his wealth of experience to disrupt the UK and European cannabis market.
Tej Virk has joined Akanda as CEO from Khiron Life Sciences, where he was President and Managing Director for Europe, establishing Khiron’s medical and consumer packaged goods business in the European cannabis market. Prior to this, Virk was Managing Director for Europe at Canopy Growth Corporation, where he was responsible for driving the multinational expansion of Canopy’s European operations.
Although not currently involved, Virk is also one of the first executives to push for and fund Europe’s largest medical cannabis patient registry, Project Twenty21, for which he was an advisor – driving the opening of the medical flower market in the UK.
The appointment of Virk comes as vertically integrated multinational cannabis company, Halo Collective recently announced the reorganisation of its international assets, Bophelo Bioscience & Wellness Pty. Ltd, and Canmart Ltd., into the newly formed Akanda Corp.
Akanda is currently a 100% owned subsidiary but, as Virk highlights, is independent within Halo. The first assets pulled into the company in the UK is its distribution business, Canmart, which is fully licensed by UK regulators and working with multiple LPs in order to import EU GMP medicines, as well as distribute them to clinics and patients in the UK. It will also be utilising the scaled production capabilities of Bophelo, Halo’s Lesotho-based cultivation and processing site, which is located in the world’s first Special Economic Zone (SEZ) containing a cannabis growth operation.
“That is a rare business within the UK, and has so much potential to scale. With my unique capabilities I’m in a position to do so,” says Virk. “Pair that with the absolutely massive grow in Lesotho – which has the potential to be the world’s largest cannabis grow as it is currently licensed for 200 hectares, which is a massive amount of land – over 700 football pitches. Lesotho is a beautiful, pristine country with all the natural sunlight needed to bring quality medical cannabis to the market at a very attractive cost point.”
By utilising Halo Collective’s ecosystem, Akanda has positioned itself to disrupt the UK, European, African, and other international markets. Virk highlights that as a combined company, the focus was split on two markets – recreational and medical.
“I think the focus was split on two markets which shared a similar product – they are sort of the same thing at the end of the day, but with some very important differences when it comes to regulations within international markets – Europe and Asia Pacific medical markets are highly regulated.
“Europe must follow and comply with all of the same types of regulations that you would see with any sort of over-the-counter medicine in a pharmacy or behind-the-counter medicine. This includes safety standards and testing, it is about creating an incredible consistent product within a very tight range of variables – they must be shelf life stable and almost the same quality you would attribute to box of paracetamol. So, while products have these regulations attached to them, in the US and other markets, where you have adult use recreation, it is a different business, probably closer to consumer packaged goods business.
“Lesotho will provide the start of the supply chain and provide high-quality dry flower for inhalation and flower for extraction to create medicines, then we have the distribution business in the UK. So, we are going to be taking flower from Lesotho and importing it to the UK. We have already seen the first medical cannabis coming from Lesotho from a competitor about a month ago, so this pathway of bringing cannabis from Lesotho to Europe is open, which is a massive de-risking for us. In terms of expansion we will be focusing on distributors in other markets that would help us get to market faster, and looking for distributor partnerships in the near term.”
Leveraging HALO’s heritage to disrupt European cannabis market
Akanda will be providing medical cannabis products for patients worldwide by leveraging award-winning genetic strains from Halo, DNA. Combining this with ideal conditions for outdoor and greenhouse-based cultivation in Lesotho, and the country’s low energy cost and competitive labor market, Akanda will be able to produce high-quality medical cannabis with ultra-low production costs.
“We are leveraging our heritage of being part of the Halo collective and what Halo has done is incredibly well is grow cannabis for the recreational market at scale. I think they have won the war of attrition on the US West Coast – there was a big pricing war from which Halo has emerged victorious, and, in doing so, has established relationships with some of the top brands in California and West Coast markets.
“Those brands and strains are the ones that have survived really difficult markets with some of the most discerning consumers and patients in the world – so, we are actually leveraging those relationships and growing those strains in Lesotho,” commented Virk.
“The ones we are starting with are DNA Genetics – which has won over 200 awards and is the same company that Canopy Growth partnered with in Canada when they launched into the adult use markets. What I like about DNA Genetics is that these are well known strains that have well observed outcomes – yes they are recreational market position, but a lot of the outcomes are medical, which we can see from self reporting of patients and consumers citing same sort of the effects for patient.
“Anxiety and pain relief two are indications in the medical market, so we are taking the data and well known strains and bringing that to the European market as you cannot export to international or European markets because of the federal legality, so we have bridged that gap. We have leveraged the incredible climate which is really like California but with little to no pollution, and we are growing those strains at scale and delivering that at a great price point.
“Europe and Asia Pacific are the first two core regions we will disturb, and really, any market which does medical cannabis which is in our remit. We are trying to narrow our focus on those two, but if we were to sum up all medical cannabis markets we would have an addressable market of over $70bn, so there is quite a lot of potential – including the UK.”
Committed to ESG practices
Akanda’s commitment to environmental, social, and governance practices broadens its potential investor base, while advancing Lesotho’s and the UN’s Sustainable Development Goals.
“We are committed to ESG principals – if there were three things to hone in on, it would be the medical focus within international markets, the high quality that comes with scale, and the way we are defining quality through those trusted brands,” said Virk.
“I think we are uniquely positioned to take some of the best practice in the cannabis space and wrap them in ESG, so part of it starts with our social equity initiative in Lesotho, which is a developing country with a small population. This industry has the chance to bring massive change to the community there in the Mafateng province. We are helping to uplift and install resilience in that local community and this is partly thanks to the initiative of executive chairman, Louisa Mojela, who is a most accomplished business woman having sat on the board of Southern Africa’s top companies, and really brings with her a background of working with charitable organisations.
“We are bringing this industry to people in a region where there is a lot of unskilled labour and teaching them skills in cultivation of cannabis and taking that through to advance roles. We are seeing some people go from working as a grower to working in more complex roles such a regulatory compliance – there are real success stories there.
“The environment is another impact area we are really focussed on such as having neutral carbon footprint, so we have some initiatives around that and zero-carbon cannabis is something that we think is is within our grasp. We are also trying to achieve as many of the UN Sustainability Goals as we can which includes everything from ending hunger to improving education. As a company, we are probably able to achieve 12 of the 17 of the goals, and we are at eight right now. We cannot do all 17 as some depend on government, but as a single company I think we are doing an amazing job.
“We have a charitable trust attached to our subsidiary in Lesotho which is dedicated to donating 10% of our profits to the Mophuthi Matsoso Development Trust which goes towards uplifting the community, building schools, providing education and helping to develop proper programmes. We have already built one school which is incredible to see and it is having a real impact on peoples lives – it is really a driving force for change and a win-win situation for all, benefiting the community, the patients with constant quality medical products and the shareholder because the returns are there.”
Virk added: “I’m really excited to join Akanda – it is probably one of the most exciting companies to be a part of in the space, which I say with some objectivity as I am still new to the role – with this particular company there is so much potential.”