UK-based start-up Panacea Farm is confident it will find a ready market for its North Macedonian cultivated cannabis as the landlocked Balkan state opens its borders to the export of dried flower.
The republic legalised the cultivation and sale of marijuana-derived medical products in 2016 as it looked to gain a foothold in the fast-growing European market.
But it left the nation’s cannabis cultivators unable to export their product and sell on the international market.
Following the decision last December by the United Nations to reclassify cannabis and recognise it as a therapeutic drug, the North Macedonian government agreed in July this year to regulate the export of dried cannabis flowers in line with both EU rules and international conventions.
Swiss Export Imminent
Now Panacea Farm, which has been operating in North Macedonia for the past two years, is preparing to export its first batch of THC bud to Switzerland, with medical cannabis set to follow in the next 12 months.
And the family-run enterprise believes with its state-of-the-art facility in Novo Selo near the Greek and Bulgarian borders in line to receive EU-GMP accreditation by the end of 2021, it can achieve its long-term ambition of becoming one of Europe’s leading suppliers of high quality medical cannabis.
Project manager Dominic John told BusinessCann: “The goal is to produce medical cannabis at the same quality as the leaders in Europe, but for a lower price. We are currently working on cultivating medical grade cannabis with a consistent cannabinoid profile and expect to be able to begin supplying into the German market and other EU jurisdictions within the next 12 months.
“We already have four greenhouses that were awarded GACP accreditation in April 2020 and received a GACP extension certificate in November last year at our as yet unaccredited GMP facility.
“This currently allows us to cultivate and harvest GACP-compliant product which can be sold into any jurisdiction permitting the import of medical cannabis.
“We believe there is an appetite for what we are growing. As long as you can grow to a consistent cannabinoid profile there is a market. After all, the market is not awash with EU-GMP products and we are confident we can compete.”
Father And Son
Panacea Farm is run by father and son entrepreneurs Howard and Ben White alongside their nephew and cousin, Dominic John.
Israeli-based Ben White is the brains behind the successful UK online beauty retailer HSNF Ltd, set-up in 2009. His father, who lives in the UK, has made his money from clean tech investment, whilst John’s background is in compliance, corporate governance and finance.
The move into cannabis two years ago came through a former work associate of Ben White who, having returned to his native North Macedonia to retire, was looking to invest in a business.
The laws around medical cannabis had just changed, and Robert Doncevski decided to put money into a family-run concern called King Fild (the North Macedonian spelling of field). Impressed with the set-up and people behind King Fild – businesswoman Meri Nadjeska, who also owns a wood burning stove company – he recommended it as a potential investment to Ben White.
Panacea Farm – which is a trading name of Brands Life Ltd – currently has a 5% interest in the 6.6 acre facility, but is looking to become a majority shareholder as the enterprise moves into the medical cannabis market.
They have already engaged UK-based Canna Consultants to provide expert guidance and oversight on the project, as well as Colorado-based NASDAQ listed Urban-Gro – which services the indoor horticultural market – to advise on controlled and homogenised environments as the company moves towards supplying medical grade cannabis.
The plan is to begin supplying the profitable German medical cannabis sector and other EU countries as Panacea Farm sets its sights on taking a share of a Europe-wide market predicted to be worth more than €3bn by 2025.
60 North Macedonian Ventures
Panacea Farm and King Fild are one of around 60 ventures that have been licensed by the North Macedonian government to produce medical cannabis since the country legalised its use in 2016.
The cannabis concern has been establishing early revenue streams using existing stock of approximately 300kg of GACP compliant THC flower and 10kg of CBD crude oil.
But John said: “It is not a commercial model with CBD, it is something that keeps revenue up and the place ticking over, but the aim is to shift across to medical bud as soon as possible as that is where the money is.”
The four licensed greenhouses currently in use each offer 500m² of space and approximately 200kg of dried flower from every harvest. The greenhouses are capable of yielding four crops a year.
But the project site has space and approval for a total of 37 greenhouses covering 27,000m² – of which 20,000m² is indoor cultivation space – making it one of the largest in North Macedonia.
The plan is to bring another six greenhouses online in the next 12 months.
The project is being built to comply with EU-GMP standards in order to meet the strict criteria needed to supply Germany and other EU countries which permit the import of medical cannabis.
The greenhouses have been designed to allow cultivation under a combination of sun and LED light conditions to keep production costs low, with the grow rooms set-up using the latest technology. Equipment has been sourced from Germany, Holland, Israel and the US.
Water – which comes from an artisanal well beneath the facility which is microbiologically tested and monitored for the presence of heavy metals – is fed through two reverse osmosis cycles to ensure high levels of purity.
Irrigation and feeding is fully automated along with temperature, humidity and CO2 control.
A Leap Of Faith
The business has been drawn to North Macedonia by its climate, King Fild’s setting in a UNESCO World Heritage area which attracts international talent, and low land and labour costs.
John admitted to BusinessCann that it has been a leap of faith for all concerned. “But there is the law change that has been a long time in the offing in Macedonia which is going to facilitate the export of dried flower. Whilst the law still hasn’t passed, because of the progressive political nature of Macedonia they have found a work around.
“When the UN reclassified cannabis the authorities in Macedonia took the opportunity to not only reclassify it at a local level but also to add in some additional notes to the wording that now allows you to export dried flower as long as it’s being shipped to a jurisdiction that permits it for medical purposes under license.
“There hasn’t been a huge market for it until now because we were only selling into Macedonia up until a few months ago, but in those few months the number of enquiries we have had from overseas people has grown.”
North Macedonian ‘Corruption Stigma’
But it is medical cannabis the business is keen to develop. John said: “We hope to have EU-GMP status later this year and we should have local GMP in the next few weeks, which then will give us the ability to export to other GMP jurisdictions.
“All the reports suggest the EU market is going to see exponential growth. The reality is that EU-GMP is going to be a pre-requisite for the majority of jurisdictions. We are going to be positioned in a location where our overheads and production costs are lower than anywhere else in Europe, so if we are able to meet the standards that other EU-GMP producers in Europe are producing to, then there is no reason we can’t succeed.
“The biggest thing we are going to have to overcome is the stigma attached to us being in Macedonia. You can’t get away from the fact that a lot of people associate Macedonia with corruption.
“We have spent a lot of time and effort making sure that the security of the site and the corporate governance are spot on so that when we have due diligence visits from prospective customers they are fully reassured that what they will be getting will be a product that stands should-to-shoulder with anything else on offer in the EU, but at a better price.
“We would like to think that our product will speak for itself in terms of the quality and the price, which will be a determining factor in making customers come our way.”