Following its recent launch in Europe, Curaleaf International CEO, Antonio Costanzo, discusses the growth of the cannabis market on the continent.
Formerly British cannabis company, EMMAC Life Sciences, Curaleaf International was acquired by Curaleaf Holdings in March 2021 to build on the momentum of the European medical cannabis market.
Curaleaf International’s products are sold in five countries in Europe including Germany, and the company has seen revenue from its medical cannabis products skyrocket due to increasing demand.
With a population of 740 million in Europe, the European adult use market is projected to reach €800m by 2025. Costanzo, co-founder and CEO of EMMAC Life Sciences, says it now has the potential to exceed the North American market due to decreasing stigma around the medicine.
“We are now part of the largest cannabis group in the world,” says Costanzo, who has been in the cannabis industry for five years. “We decided to focus on Europe and started building EMMAC Life Sciences, which became Curaleaf International. Today, it is the only vertically integrated multinational cannabis company in Europe.
“It is a perfect platform in our view to make the most out of the opportunities that we are going to have in front of us in the coming months and years around Europe – both on the medical cannabis side and the recreational cannabis side.
“We have our cultivation facility in Portugal and have two pharmaceutical labs, one in Spain and one in the UK, which comply to with EU GMP standards. Through these three assets, we are able to distribute the products that we manufacture in different countries in Europe and in the UK – including Germany, France, Italy and Switzerland. As we progress, more countries are coming on stream – Israel is another country where we have shipped a lot of our medical cannabis flowers in the last 24 months.”
Curaleaf International is part of the Curaleaf Group, a combination that Costanzo says are complementary due to the high demand in Europe for medical cannabis and the expertise from the recreational markets in the US.
“The two are very complementary in our view because on the one side you have the high demanding landscape of Europe, which has taken us into a pharmaceutical route, combined with a more consumer goods approach in the US.
“We feel like we can combine the best of two worlds so we can bring all the standards that we have implemented here in Europe and all the research and development that we’ve done in Europe into the US, and we can take expertise from the US to Europe.”
Europe is seeing a number of markets opening up across the continent, including recent announcements from Switzerland, Luxembourg and Germany, which are all moving toward introducing new cannabis legislation to allow citizens access to the plant.
“When we started in 2018 only a few countries had a medical cannabis programme in place. Today, there is more of those countries, and the most important thing is that all the main countries are moving forward with the deployment and opening of medical cannabis programmes. So, it is not a matter of if they want to open, just a matter of when they implement those programmes.
“We have seen the number of patients in the UK multiply by five in the last 12 months and we are also seeing numbers going up in Germany and in Italy. We think that is going to continue happening on the medical cannabis side as we progress and more countries open up.
“France has introduced a pilot project, which will convert into a full opening at the beginning of 2023. Spain is currently going through a parliamentary process to open up a medical cannabis programme, which we think will happen by the end of 2022, and there is also ongoing political discussions around recreational cannabis which are picking up very rapidly in some jurisdictions. In the coming 12 to 24 months, we will start seeing countries opening up in that segment as well.
“The potential is huge in Europe. There are more countries that need to legalise in Europe compared to North America, but, that being said, I think if you look 10 to 20 years ahead the potential is fantastic.
“There are always barriers when you are talking about something that has been illegal for 70 years and treated as something that should not be touched, should not be made available to people, not even for medical purposes. Now that has changed in the past 10 to 15 years, and it is even changing for adult use or recreational use. So, there are barriers and they need to come down.
“For example, in certain countries there is still a stigma around cannabis. That has been removed very quickly, largely because of the work that has been done around research and medical use. Once a product has value as a medical product, then the conversation completely changes. So there are steps that need to be taken – there are still people that need to be educated about the reality of cannabis, politicians that have to come to terms with the change in the view of something that they have never questioned within themselves – but that is happening and we are seeing the results of it already here in Europe.”
Curaleaf is putting a strong emphasis and focus on research and development, including clinical research, having a number of ongoing relationships with Imperial College London and universities in Italy and Spain. The research is centred around how to best use cannabis and its active pharmaceutical ingredients to treat different conditions, specifically focusing on cancer, inflammation and the treatment of chronic pain.
“It is early stages, but it is something that we are very committed to and, in the long term, will inform not just how we develop products for medical use, but in my view will also inform how we develop products for adult use consumption, which is something that we are already seeing happening in the US. We want to provide products to people that are safe to consume. That is the end goal for this industry – we need to make everyone comfortable with these products and one of the ways to do it is by investing in research and development.
Curaleaf has the benefit of having complete control over its entire supply chain, which Costanzo says helps the company bring products to patients at an affordable price point.
“By being in control of the full supply chain, we are also in control of the costs. That has resulted in us being among the first companies to bring prices down. One of the issues that we had in Europe around medical cannabis at the beginning was that the pricing was very high. It was difficult for patients to pay 15 pounds for a gramme of medical cannabis when they could find a similar product, although not with the same safety standards, on the black market for six pounds.
“Because it [cannabis] is not reimbursed – taking the UK as an example – it really had an effect on their personal wealth. We managed to bring that pricing down because we are vertically integrated, so we compressed the pricing. We compress the margins and we are today able to sell products in the UK at a cost per gramme which is lower than the average cost per gramme of the illegal market. This accelerates the growth of the market and now eases access to the product for patients.”
Costanzo added: “We are very excited because we think it is still very early stages in the development of this industry. We think that we are very well positioned to take advantage of that opportunity that is coming our way and that the next 24 or 36 months are going to be a key moment for the European industry.”
[activecampaign form=31]
