Do you see a trend away from vertical integration in the European cannabis supply chain. If so, why do you think this is occurring?
No, not at all. Far from it, I see companies that are building new functions, and spreading across the supply chain. Vertical commerce is not just impacting on our industry, it is com- mon and admired in many other industries.
We are very much behind the curve. But let’s be clear about what vertical integration actually means in our market – owning the supply chain from seed to sale is the usual definition in jurisdictions like Canada but here in Europe due to the lack of grows in-country, the verticality usually starts from product finishing, and ends with sending a medical cannabis or wellness product to the consumer.
The mindset of the majority in Europe is that the grow is not a huge loss from the vertical, the product is commoditised, the price is tumbling, here in the UK medical cannabis is cheaper per gram than the black market – that’s more than 1.4 million potential medical users here that might now turn to legal medical cannabis.
Vertical integration for LYPHE is as follows: importing own label NOIDECS from multiple manufacturers, patients then meeting with out doctors online and finally cannabis being sent by our dispensary to the patient’s door.
When looking at the individual companies in the vertical for medical cannabis in Europe, you must pay attention to the profit margins. There are levers that generate demand, and there are levers that generate revenue – it’s a fine balance to have them all working in unison.
Many companies market cannabis produced in several locations and from different seeds as the same strain/brand. Does this introduce a level of variance in the branded product, taking into account a possible entourage effect?
Lots of brands get their genetics from the same place, so they have the same name. Medical cannabis usually focuses on showing the THC and CBD levels. These are the active ingredients that doctors care about. The ratio of the active ingredients is how doctors medicate their patients.
If it is EU-GMP that is fine, the name of the strain is not a prerequisite at all, that said, if the strain name is there for the patient that is fantastic. We know that there are some patients that have been self-medicating for a number of years – they usually know more than the doctors when it comes to the strains that work best for them.
Is there anything else you would like to add about Lyphe, what you’re focused on or regulatory developments you are looking forward to in the European context?
This is a golden age for European cannabis. We are opening the door to a completely different approach to medicine, and it will be felt deeply and for generations to come.
The European Cannabis Report: 6th Edition takes a deep dive on the current social, economic, regulatory and health trends. The report also includes sales forecasts of medical and adult-use cannabis in the US and Canada.