‘The European Cannabis Industry Has Passed The Point Of No Return’

In a Q&A with BusinessCann looking ahead to 2022 Lino Cereghetti, Chief Operating Officer at Swiss company Pure Holding says it is only a matter of time before other countries follow Germany with progressive regulations 

BC: What developments should we expect to see in the European cannabis industry in 2022? 

LC: There have been some recent regulatory changes that will have a positive impact on the European cannabis market in 2022. Due to the long-awaited opening of the cannabis market in Germany, a domino effect will spread through Europe. 

The point of no return has been passed and it is only a matter of time before other countries follow up with progressive regulations. In Switzerland, the opening of the medical market is expected in mid-2022. 

It will allow simplified pharmaceutical dispensing by all doctors without limitation to specific medical conditions and enable the cultivation of THC cannabis in Switzerland for export to target medical markets. 

Pure Pharma AG is optimally positioned to play a leading role in this market and has set itself the goal of supplying as many patients as possible with high-quality yet affordable medical cannabis. 

The pilot projects also mark the start of the distribution of recreational cannabis for experimental purposes in Switzerland. Various cities in Switzerland are conducting studies in which they are allowed to distribute recreational THC cannabis to up to 5,000 participants per city via different distribution outlets like dispensaries, social clubs, pharmacies and others. 

Pure Production AG, which has already been conducting research and variety evaluation trials with THC cannabis within the framework of the pilot projects for two years with an exceptional permit from the FOPH, will provide the THC material for the majority of the cities. 

In addition, Pure Production AG will launch a new B2C product line in retail at the beginning of 2022, which will also underline the trend from B2B to B2C shift after the commoditisation of the raw materials market. 

After three years of basic research in the field of molecular cannabis breeding, we are now at the point in 2022 where we can apply the knowledge we have gathered in a targeted manner. 

Through the world’s largest cannabis field trials in 2020 and 2021, we have been able to map over 350 cannabis plant traits such as active ingredient concentrations, pest resistance, yield, plant architecture, genetic stability etc. to the corresponding DNA sequence. 

This knowledge now allows us to cross specifically according to the needs of our customers, in order to provide them with tailor-made genetics for their requirements. That is why we are currently setting up breeding centres around the world together with partners, in order to continuously incorporate innovation and improvement into their breeding programme directly on site. 

BC: How did you see 2021 for the industry? 

LC: Due to the progressive cannabis regulation in Switzerland and the 1% THC limit, the Swiss cannabis industry has been able to take a pioneering role within Europe over the last couple of years. 

However, as this locational advantage was of a regulatory nature, it was always obvious and only a matter of time for us until other countries with lower production costs would also raise their THC limit to 1% and thus reduce the production advantage of Swiss producers. 

That’s why we started early to diversify our company away from production and founded Puregene AG in 2018 to research cannabis genetics in order to build a stable backbone for the whole industry and to bring cannabis breeding to the scientifically founded level of research that has long been the case with other crops. 

In addition, we have already secured very large production capacities in South Africa in the middle of 2020 in order to remain competitive in the future. 

Even though we always knew that the moment would come when supply would exceed demand, the whole industry was surprised by the speed and scale of it. 

In early 2021, Switzerland was flooded with cannabis from cheap production countries overseas within months and prices plummeted. As in many other young industries before, we have reached the consolidation phase in the Swiss cannabis industry in 2021 after the hype of the last years. 

In 2021, the wheat was separated from the chaff, all Swiss cannabis companies that only specialised in production or were generally on shaky ground are history. Only those who work professionally and according to standards, who have diversified areas of activity and who have already demonstrated the necessary agility to be able to react to rapidly changing market conditions will survive this phase. 

But Swiss politics also reacted in 2021 and set a clear course for the future. 

With the Medical Cannabis Act, which will allow the direct dispensing of medicinal cannabis by doctors in mid-2022, and the start of studies on the dispensing of recreational THC cannabis, the next steps in a progressive Swiss cannabis policy have already been taken and Switzerland is ready to take on the next pioneering role in Europe. 

However, I sincerely hope that politicians have learned from their mistakes and will not gamble away this pioneering role a second time. 

Lino Cereghetti, COO, Pure Holding