EMMAC Life Sciences’ Antonio Costanzo discusses the booming medical cannabis industry in Europe and EMMAC’s role in its future.
As investment and interest in the medical cannabis industry continues to grow, Health Europa Quarterly profiles EMMAC, the European independent medical cannabis company. Combining cutting-edge scientific research with the latest innovation in cannabis cultivation and production, EMMAC is fast becoming the leading player in a market forecasted to be worth some €55bn in the next decade.
Here, Antonio Costanzo, CEO of EMMAC, shares his vision for the company, predictions for the industry, and why the medical cannabis market will continue to bloom over the coming years.
How did you find yourself working in the cannabis industry?
Two years ago, I co-founded a Canadian company called Nuuvera, where I was head of international development. Nuuvera was one of the very first Canadian companies that really developed quickly on an international scale, rather than just domestically. Prior to Nuuvera, I typically worked across other regulated industries; for ten years I was in charge of international development at bwin, an online gaming public company, before I joined Uber, where I headed up regulatory affairs and government relations in Paris. The common thread has been working in industries in transition, caused by either new technologies, new regulation, or both. And that’s what we’re seeing in the medical cannabis industry now. It’s an incredibly exciting time for the industry.
What are the challenges in entering a highly regulated market like medical cannabis?
In highly regulated markets, the devil is in the detail. They are typically highly competitive, so those companies which are able to successfully navigate the different regulatory environments and different legislations are the ones that become successful. In order to do that, it fundamentally comes down to people.
You need people who have a great deal of experience and, as a company, you need to think local and take a different approach to each market. That means you need to be able to speak to the authorities in their own language, you need to be able to understand the culture, you need to be able to understand the business habits in a given country, and, most crucially, you need to be able to combine those with your central operations.
The potential opportunity, if you’re able to navigate those elements, can be enormous. In highly regulated markets, only a few brands will be able to grow and localise their businesses, and so if you’re able to do that, you can find yourself in a position that is very interesting from a business perspective.
How have you seen the cannabis market change over the past few years?
The cannabis market has developed at a pace that no one has ever seen in any other regulated industry. We are witnessing the end of Prohibition 2.0. A hundred years ago it was about alcohol, another drug that became legal. Five years ago, there were only five countries in the world that allowed the use of medical cannabis. Today there are more than 40 countries that do so, and almost every week a new country opens up its legislation.
We’re also seeing countries starting to legalise recreational use of cannabis, and that will also probably increase in the coming years. And all of this is something that we’ve never witnessed before in our lifetime, and we will probably never witness again. It unfolds because of a bottom-up social movement: patients and doctors demand access to cannabis for medical purposes, and they push politicians to open up those markets.
On top of that, scientific research showing the medicinal benefits of cannabis is coming in very quickly, and although a lot more still needs to be done to understand exactly how every component of this plant works, we’re already pretty far down the road. It’s an incredibly exciting time to be in the industry.
What lessons have you learned over the past couple of years?
It’s vital to know everything when it comes to regulation and legislation. If you don’t understand all the details you’re going to waste a lot of time, waste a lot of money and you’re not going to be able to do what you have planned to do.
That’s why we believe strongly that you need people on the ground from different countries if you want to be a multinational company, particularly in Europe where there are over 700 million citizens across more than 40 countries. Each country has very different rules and laws, so as a company you have to be extremely local in order to succeed.
Why is medical cannabis having such a moment now?
First and foremost, we shouldn’t forget that cannabis has been used for medical purposes for more than 5,000 years. Back in the 19th Century cannabis was a very popular product that was used to treat many conditions and in many everyday products. It’s only over the past 60-70 years that it has become a totally illegal substance, and then it disappeared from the radar in terms of medicinal approaches.
Now it’s largely coming back because of the current changes in regulations and legislations. And that presents a huge opportunity, an opportunity that’s almost unlimited in the sense that we are turning an industry that’s been illegal for over 60 years into a legal industry. That situation is very rare, and when that happens it creates a fantastic opportunity. And the potential audience is huge. If you look at the numbers of people who currently use cannabis for either medicinal or recreational purposes in Europe alone, we’re talking about some 90 million people.
The vast majority of those people will become legal users of the product as more and more countries develop their medical programmes.
Why does the European market present such a great opportunity?
We believe that Europe will become the largest medical cannabis market in the world. Primarily, this is rooted in the size of the market – around 700 million people – and the fact that the average age of the population is higher than in other areas of the world.
On top of that, in Europe, healthcare expenditure is the highest of any continent in the world, and the structure of the health system in most of Europe is based on public funding.
We believe that all of these elements combined will contribute to making Europe the largest market for medical cannabis in the next 5-10 years, and in monetary terms we’re talking about a market that could be in the region of €35-55bn in total.
How quickly is the industry growing in Europe?
It’s growing very fast. We’re now seeing that many of the major European countries already have a medical programme in place – the UK opened up a few months ago, Portugal is opening up its market for medical purposes, while Germany and Italy have been there for a while.
The only two large countries that are missing are Spain and France, and France is due to open by the end of the year, while Spain will most likely also open up by the start of 2020.
What is the main driver for change?
The main driver for all these changes always comes back to demand from patients. There is a strong demand for natural products to treat different conditions and cannabis is becoming more and more popular. So, it’s a completely bottom-up approach. Patients go to their doctors; they push to be able to get access to cannabis for medical purposes; in turn, doctors relay that to the regulators because they do not have access to that product; regulators relay that to politicians and eventually legislation starts to change. We’re also now seeing international bodies becoming more open to change.
The World Health Organization recently published its recommendations after a critical review of cannabis and CBD as a component, and when it comes to CBD, the recommendation is not to treat it as a scheduled substance. Similarly, when it comes to cannabis, the recommendation is to reschedule cannabis to make it a substance that is easier to use, easier to do research on and easier to move around. All of that echoes a general global movement that we are seeing.
How would you summarise EMMAC’s vision for the European medical cannabis market?
Our vision is clear: for EMMAC to become the European independent medical cannabis leader. There is a clear opportunity, in that most of the European market has so far been developed by Canadian companies and we are working to build a fully vertically integrated multinational European medical cannabis company.
What is the structure of the team at EMMAC?
We have a very strong team that covers multiple areas of the business. We have a very good scientific team led by Mikael Sodergren, the director of research, and Barbara Pacchetti, our chief scientific officer. Pacchetti is one of the most experienced scientists in Europe when it comes to medical cannabis; she’s been working on it for five years and has developed a number of different products.
We also, crucially, have a strong team on the financial side, as well as powerful local teams, as we believe it’s critical to have boots on the ground in every country in which we operate.
Currently we have operations in eight countries, and we have a country manager in every one of them. We strongly believe that will make the difference in the end.
Please note, this article will appear in issue 9 of Health Europa Quarterly, which is available to read now.