Alfredo Pascual of SEED Innovations has been in cannabis since its early days.
Alfredo Pascual was knocking on the door of opportunity in the cannabis industry from the very beginning. His journey has taken him across Germany, Uruguay and North America and today, he is vice president of investment analysis at SEED Innovations.
SEED Innovations, headed by Ed McDermott who is also managing director of EMMAC Life Sciences Plc, has investments across medical cannabis and CBD, having started out in 2015. To date, the company has been involved in promotion and discussions around medical cannabis with UK and European policymakers and advocacy groups.
The beginnings of cannabis
Originating from Uruguay, Pascual studied business administration, then moved to Germany in 2013 to do a masters degree in public policy. It was during this time that Pascual became fascinated by drug policy reform.
“When I finished in 2016, I wanted to connect the dots and work doing something related to drugs,” said Pascual. “Cannabis was the first thing that came to my mind because of how things were evolving, particularly in North America.
“Outside North America back in 2016, there was not a lot going on. There were some very small medical programmes, but that was before Germany changed. One of the countries that were a pioneer was Uruguay where I’m from. The law was changed in December 2013 when cannabis was fully legalised for medical, recreational and industrial uses. Things evolved quite slowly, but started to take more shape towards 2016.”
During 2016 there was a cannabis company from Uruguay, ICC, listed on the Toronto Venture Exchange – giving Pascual the inclination that the industry may develop internationally.
He said: “I was on vacation visiting my family in Uruguay and I knocked on the door of that company. I just finished my degree in public policy in Germany, which was then debating a change of the law that would significantly improve access to medical cannabis there.”
Pascual believed he could help the company if it was planning to export to Germany, and keep track of policy developments across the globe.
“I started working at the end of 2016, then in 2017, when the CEO left, I left as well because I was working very closely with him. He ended up in Canada with another Canadian company,” said Pascual.
Over his career, Pascual went on to work as an international analyst at US business news and data resource MJ Bizz, and VP corporate development at FoliuMed, a producer of pharmaceutical-grade cannabis extracts.
“What I realised back then was that there was a desperate need for quality information. Not simply propaganda, but really professional information that would be useful for companies to make decisions,” commented Pascual.
“I was at MJBiz Con in 2017 and I proposed to start writing every now and then about what was happening outside North America.
“What I did there was to cover the industry market and regulatory developments in Europe and Latin America, which were the two continents that I am familiar with. A lot happened during those years from mid-2018 until a year ago.”
Throughout his time in the industry, Pascual has seen global medical cannabis gain a more credible reputation, maturity and increase in market value. In 2016 Canada had a medical programme, and Germany also had a very small medical programme with around 1000 patients.
“There was the Israeli medical cannabis programme which is quite old,” said Pascual. “Australia also had a very small medical market by the end of 2016, and little else. Since then, I would say that many things have happened, including the industry becoming much more professional.
“I think we’ve come a long way – Canada legalised recreational, and one thing for sure is that the sky didn’t fall apart. You could say certain things could have been done better – that is always the case, but the Canadian legalisation was no disaster.
“I think that is really important because of Canada being a G20 country. The other interesting thing is that you don’t have a big movement in Canada trying to go back to prohibition for example. That’s not existent.”
Pascual highlights that things are continuing to evolve in Europe. Last year Malta became the first country on the continent to legalise recreational cannabis, and there were changes to Cannabis regulation across Switzerland and Luxembourg.
“Germany has been in a way the centre of attention because of how the market has been evolving,” said Pascual. “It was never the intention of German legislators to have other countries legalise cannabis to export to Germany, but in practice that’s what happened because the German market started to grow and policymakers saw an opportunity there in terms of exporting to the country.
“There was a wave of legalisation from 2017 to 2019 in particular that many countries were legalising medical cannabis, but they were putting the emphasis on the potential economic opportunity of exporting – in particular to Germany – and not providing access to their local population.
“So, again, in Europe, we have many examples of countries that barely have access to medical cannabis. Germany pulled many other countries into legalisation because of the opportunity that it created because the German market is so dependent on imports – there’s very limited domestic cultivation in Germany.”
The European opportunity
Pascual highlights that as well as Germany, the current markets seeing meaningful are Israel and Australia, with the UK trying to catch up, and that the potential opportunity for investment in cannabis is a matter of how different companies approach it.
Pascual said: “You could you could first consider the North American companies that have already invested in Europe because they not only they saw an opportunity on in the medical cannabis sector, but because they also see it as a natural development that eventually those medical markets will also turn into recreational opportunities.”
Highlighting Curaleaf as an example, Pascual says, some companies have a positive outlook on the European opportunity in Germans of both medical and recreational cannabis.
“Curaleaf didn’t wait for Germany to have legalisation promise,” Pascual commented: “They already entered the European market through because of the medical opportunity that it represents, but also because of recreation.
“There are also companies that were hesitant about Europe but now there is the promise in Germany, they may be more interested in investing in Europe because they see it as a more tangible opportunity.
“Thirdly is companies that continue to be hesitant because they still don’t see that much of material development when it comes to the prospects of recreational legalisation in Germany. What we have to date is a promise but we still have no timeline or regulations. It is not guaranteed – they will probably face several difficulties throughout the legalisation process, and how exactly the final law and subsequent regulations and implementation of that legislation will look like is anyone’s guess.
“So, there may be some companies that are following closely but not yet investing and waiting until they have more clarity.
“When it comes to medical cannabis, I think things have been going quite well,” he said. “We have made some significant investments in the past year.
“SEED Innovations significantly increased our investment in Little Green Pharma, which is an Australian based company listed on the ASX. They have been pioneers in Australia and also have global goals. They bought the subsidiary of Canopy Growth in Denmark which was a big acquisition. The company has products in the German market, the France pilot project and in other European countries.”
Most recently, Little Green Pharma made further strides in Europe having been awarded an Italian Government tender for the shipment of medical cannabis into the country.
Pascual added: “Another one that it’s also quite important in size for us is Eurox that specialises only in manufacturing here in Germany. Their set up is that they are developing their cultivation in Portugal, but they already have the manufacturing capabilities here in Germany.”
Eurox has also already launched products in the market, including full-spectrum extracts that are available in German pharmacies, and in November 2021 started the white label sale of its dronabinol products to a number of select customers.
Pascual says that SEED Innovations is positive about European cannabis, with its investments in medical only, as per current legislation. However, the company is also looking towards the wellness market in CBD.