Exclusive Interview: Surveying Europe’s Legal Cannabis Landscape with Sanoid Isolates’ Harry Wildschut
By Oliver Bennett, Special Contributor to New Frontier Data
In an acquisition making headlines over the summer, British medical cannabis company Grow Group bought out Spain-based producer Sanoid Isolates, thereby positioning itself as an integrated cannabis production, R&D, and distribution company. In an exclusive interview with New Frontier Data, Sanoid Isolates’ co-founder and CEO Harry Wildschut discusses topics including attaining consistency in medical cannabis, pending legislation, and the industry’s forward-facing trends.
New Frontier Data: How do you go about establishing and maintaining consistency in medical cannabis?
Wildschut: “Consistency is key, and we’re aiming for this in two ways. Our hybrid greenhouses in the south of Spain allow us to cultivate large quantities of cannabis for medical purposes through the cloning and cutting of mother plants, which are registered in the European plant variety office.
“As we always work from the same mother plant (rather than from seeds), this gives us maximum consistency, and in a full crop of four hectares we generate about 35,000 cuttings from the same mother plant — which is itself cloned and renewed. This way, the numbers of cuttings don’t have a big impact in the consistency of the plant. Secondly and most importantly — as the name Sanoid Isolates suggests — we believe that in the future medical cannabis patients won’t consume plant material.
“So, our premise is that we’ll be moving sooner or later to pill and tablet products that will have far greater consistency. These will work far better with doctors (who hate to prescribe plant material because it varies so much), and as medicine they will be more reliable and consistent. Because of this, the cultivation factor will become less important. Whether I extract and purify a kilo of cannabinoids from an indoor crop in Europe, or from the hills in Colombia, that kilo of purified cannabinoids will have to be the same. Cannabis-based products will have to both reduce inconsistency and allay doctors’ fears about consistency.”
New Frontier Data: Have you trialled any pharma-style pills yet?
Wildschut: “Not yet. We’ve built our cultivation facilities, we’ve done our first trial crops, and with the acquisition by Grow, we are now in a position to actually build our extraction facility. We hope to bring our first extraction isolates to markets by the end of 2022-early 2023, and together with Grow we’re introducing our final formulations of producing pills, potions, or tablets.”
New Frontier Data: Will the whole European legislative framework catch up as the biotech changes?
Wildschut: “Yes, I think there are huge opportunities for that to happen and cross-border opportunities will follow. I’m not sure if the EU is itself going to make a big difference, but the key should be to ensure that cannabis is accessible for patients, as we need medicinal cannabis programmes in every country.
“Things are moving in the U.K., Germany, Italy, and we have a long history in the Netherlands. One by one, countries are slowly moving towards having proper medicinal cannabis plans. It’s not totally coordinated, but there’s a domino effect as countries put it on the political agenda. The other aspect is that there should be sufficient cross-border supply chain opportunities, so that (for example) Germany is allowed to import, and Spain is allowed to export.
“I believe that as those boundaries open up, economics will drive the supply chain. But longer term, I don’t see serious supplies coming from expensive, unsustainable greenhouses in Denmark, U.K., or Germany. It’s economic common sense to go to low-cost production areas. As to demand, even in positive places like the Netherlands, there’s a problem as with medicinal cannabis as there’s only one producer – Bedrocan. Allegedly, 90% of the Dutch medicinal cannabis patients buy their cannabis in a coffee shop, because it’s so horrendous to try getting it through the official route. Therefore, there’s a growing group of customers and patients who use word-of-mouth support for self-medicating cannabis for pain relief. They’re part of a countermovement, and fear chemical painkillers as being addictive, like opioids. From a consumer point of view, that’s where we see momentum growing.”
New Frontier Data: What about cannabis linking with Big Pharma industries?
Wildschut: “There’s a real development in that pharma is getting interested. We have GW Pharma being acquired by Jazz Pharmaceuticals, and Tilray partnering with a pharmaceutical company [Novartis subsidiary Sandoz]. That said, we don’t want cannabis to be dragged into typical pharma-style, 10-year trials before we can bring it to market. Within the industry, we want it to be available on prescription, or even over the counter, instead of being an expensive pharmaceutical product.
“But the fact that the pharmaceutical industry is slowly stepping in helps raise general awareness, and a legitimacy that brings cannabis to another political and economic push factor: that legalising the market is going to bring in tax revenues for governments, provided we can move beyond the old stigma.”
New Frontier Data: What of recreational cannabis?
Wildschut: “I think recreational cannabis is the second wave following the medical market. Every country starts with the medicinal part; then — slowly — the recreational discussion pops up. For governments, medicinal markets are easier to control with distribution through health agencies and pharmacies with doctors’ prescriptions. Medical cannabis is also more politically safe than having to allow coffee shops or social clubs. Recreational conversations come second.”
New Frontier Data: Which European country is the most forward-thinking in cannabis?
Wildschut: “From a quantitative point of view, I’m very encouraged by Germany. They more or less lead already, as the biggest market in Europe. Then there’s the U.K., France, Spain, Switzerland, and Italy, which are all onboard. If these countries put their shoulders behind this, then others will follow. I don’t think that medicinal cannabis is quite on the European political agenda, so for the time being we need to stimulate regional initiatives and get it moving. More pan-European legislation could be useful, although we already have the EU GMP guidelines.”
New Frontier Data: Has the investor environment changed?
Wildschut: “We saw the big hype in 2018, where billions of dollars went into Canada, particularly from large corporations, the most famous being the deal between Canopy Growth and Constellation Brands. But of course, in 2019, the whole market then dropped. The industry was building greenhouse like there was no tomorrow and I understand that in Canada, [CAD] $14 million greenhouse facilities are being sold for [CAD] $2.5 million, because there was simply overcapacity.
“Last year was a tough year, and corona [COVID-19] was a big part of that. But I now see now that mid-market investors are moving in, attracted by public listings such as the London Stock Exchange, which recently opened up for cannabis companies to list. That helps, as do banks that are slowly being more accommodating in credit lines for cannabis companies.
“But at the end of the day, it’s all about legislation. For example, a particular problem has been getting this [Sanoid Isolates] facility and its crop insured, because it is not recognised as an official crop as it’s not legalised.
“I think we really need legislation to open up. That’s when banks will follow and when investors will be even more interested — because at the end of the day, investors are looking for an exit. At present, you need to have a fair level of imagination, confidence, and faith to see an exit for your investments in the cannabis industry. It will come.”
