Curaleaf co-founder Boris Jordan has revealed why he decided to launch a huge expansion into Europe earlier this year.
In March, the US cannabis giant – which operates in the medical and recreational sectors – made waves by buying EMMAC Life Sciences in a deal worth more than £200m.
For a company doing pretty well out of rapid liberalisation at the state level back home, it seemed a strange time to be focussing on Europe to some observers.
But Jordan told Prohibition Partners Live that he believes now is the perfect time to invest in Europe’s nascent cannabis industry – and why he wanted to get in early.
Explaining the rationale behind the EMMAC deal, he said: “It was similar to the way we approached the US, we were early arrivals, we started buying companies across the US in 2014 and onwards.
“We felt you can’t build national or global brands unless you have the distribution and manufacturing capabilities in those markets.
“I always feel the costs of these business go up as these industries grow…so getting in early really gives you a head start in terms of knowledge but also before prices go up.”
As part of the deal, Curaleaf brokered a $130m capital investment in EMMAC from a confidential source. Jordan declined to reveal the funding source, saying only it came via ‘a very large institutional player that has made investments in all different kinds of businesses in Europe’.
EMMAC – which is to be rebranded as Curaleaf International – will be entirely ring-fenced from the US company and maintain its own board and finances.
Inconsistencies between US and European regulations mean there must be a strict firewall between the two businesses, despite sharing branding and R&D resources.
Federal restrictions on Curaleaf in the US meant the deal had to be structured through a Canadian subsidiary and funded entirely with European money.
Jordan said he hoped the company could become a base for activities across the EU, Britain and further afield in growing markets like Israel, Morocco and Egypt.
Commenting on the regulatory outlook in Europe, he said: “We feel that, like the US, a lot of countries will start to liberalise and expand programmes and start to grow their markets…[the European market] is starting to reflect what the US looked like in 2015.”
He said he was most hopeful about medical markets in the UK and the potential for adult use liberalisation in Spain and Germany, confidently predicting the latter could open up use by 2023 should Germany’s governing party lose the September election.
Jordan also said he expected further movement on medical cannabis laws as the pandemic recedes. He told the event: “Covid slowed a lot of things down, health ministries have been backlogged with Covid issues.
“I think that will change as we come out the covid situation and you will start to see an acceleration as health ministries look again at cannabis.”
[activecampaign form=31]
