Global consolidation across the cannabis value chain is inevitable, says Cantor Fitzgerald’s Pablo Zuanic. However, the formation of transnational cannabis conglomerates that exploit global market opportunities face multiple challenges such as maintaining quality consistent and margins competitive across the value chain, finding the best partnerships and market niches and innovating their products.
Only those companies that are strategically positioned for global cannabis legalization will benefit from the first movers' advantage. Understanding the market strategies of these companies can provide valuable insight for cannabis investors interested in gaining smart exposure, diversifying and mitigating risk. Likewise for cannabis companies currently operating in state or national markets, finding the right partner can represent whether or not they expand their global footprint.
One question to ponder is which of these companies can connect cannabis producers and sellers across the globe?
One that stands out is the Alpen Group Inc. Born in Switzerland, at the foothills of the Alps, the Alpen Group is a cannabis multi-country operator (MCO), with end-to-end cultivation, genetics, extraction and distribution operations in Switzerland, Germany, the United States and Canada.
“We consider ourselves to be an MCO, which is different from the MSOs of the U.S. We're a multi-country operator,” said Todd Boren, CEO of Alpen in an exclusive interview with Benzinga.
Boren, who founded one of the first US cannabis funds, the MacArthur Fund and led one of the largest exits at its time by selling Form Factory to Acreage Holdings, along with Peter Glik, CCO of Alpen, and an experienced consortium of cannabis specialists, is building a nodal company for the cannabis industry in the heart of Europe.
“Switzerland is known for the highest quality products around the globe, best pharmaceuticals around the globe, a hub for distribution, not just through Europe, but really globally,” Boren said. “Peter and I do come from the U.S. cannabis space with deep backgrounds on the operational side… [and] a lot of the problems in the U.S. are answers that we found in Switzerland.”
The CEO explained that the main problems facing cannabis companies in the U.S. such as the lack of interstate trade and banking are not significant challenges in Switzerland.
“Banking is a complete issue in the U.S. [where] forming a large conglomerate type of company is completely impossible. In Switzerland, we can bank from country to country. We are really global with Latin America and Asia as a major component of what we're doing,” Boren said.
Peter Glik, COO of Alpen praised U.S. companies but acknowledged the shortcomings of operating there.
“There are a lot of great organizations [in the U.S.], great companies with great people. And Peter and I have seen the best and the worst of it. And we brought the congruence of that team to the leadership,” Glik said.
Referring to European marketplaces as “a bullet train,” Glik explained that Alpen’s team draws on lessons learned in the U.S. to navigate global cannabis markets and find advantageous business partnerships.
How To Tap Into The Global Cannabis Supply Chain
The Alpen Group covers all the bases. From financing to retail, Alpen has made strategic acquisitions that allow it to compete and operate efficiently along the supply chain.
“Alpen Group has a portfolio of brands launching Q1 of next year,” Boren said. “Alongside the portfolio of brands, WeGrow, which was previously cultivating GACP hemp flower will now transition to a EUGMP $25 million state-of-the-art THC facility that's in its final stages of being built out.”
The new Swiss facility will handle tissue culture and cannabis clones as well as growing psilocybin mushrooms.
“Bio Zu Farm Genetics was a very strategic acquisition for us as it is a genetic library and tissue culture program. It's a strategic acquisition because that's how we were going to tap into the global supply chain. So we'll micro propagate up to 10 million tissue culture clones annually and then we will sell those clones to the European markets as well as, you know, Latin America, Asia, etc,” Glik said.
“Tissue culture, clones. It's a proven concept here in the US. It's a great pathway for US genetics to enter into the European market. It's a great way for us to study the supply chain, and understand whether products will come from South Africa, will come from Portugal, will come from Latin America. There are a lot of unknowns when it comes to global cannabis. Right. And so for us to have the ability to tap into these supply chain solutions through our tissue culture cloning program it's a strategy and supply chain solution that we firmly believe in,” Glik added.
At The Giants' Doorstep
The localization of Alpen is not arbitrary. “Switzerland was a very strategic decision for us as it is the pharmaceutical headquarters of the world. It's centrally located in the EU but is not part of the EU. So it has its own direct relationships with the surrounding countries, which is very important for the ability to import and export. This is a major vertical within the Alpen Group,” Glik explained.
“Certainly Germany is a tremendous opportunity and looks to be leading the regulatory way. We believe we can be a huge support for that market,” Boren added.
“The scale and growth that will come from the recreational market there tap back into our tissue culture program and genetics library. [In terms of] scalability of genetics, we have no issue, no concerns, and we plan to by tap into, over 10,000 annual kg of production through our tissue culture program,” Glik continued and explained, that beyond scale and quality consistency the company is working on shaping future markets by diversifying its offerings.
“When you think of the current pharmaceutical markets, most are flower markets. Flower is the most inconsistent way to consume cannabis. But, who will be a pioneer in creating the rules and regs for what I call the 2.0 cannabis products? Who's going to be the leader in defining what these products will be?” Glik asked and highlighted that Alpen is geared towards being the leader in formulating 2.0 products for the European market.
“The relationship with Latin America is primarily focused around import export into the European markets as it's a low-cost producer of cannabis. We are looking at many groups who see Switzerland as the primary pathway into the EU,” Glik said. “We will be working with EU GMP certified cultivators out of Latin America as well as acting as an EU GMP producer ourselves.”
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