Ep 27: Europe’s Medical Cannabis Market: Growing, But Growing Up? — The Shift

with Benjamin Rigodin · The Shift, a podcast by Headquarters

Europe’s medical cannabis market is booming - but is it maturing? Benjamin explores quality standards, supply chains, and what keeps buyers coming back.

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Auto-generated from the episode audio and lightly edited for readability.

0:07 So the European medical cannabis industry is growing, but is it actually maturing? We're seeing more companies entering the market, increasing emphasis on pharmaceutical standards and countries taking very different approach to regulation.

0:25 But is this industry becoming better at operating like pharmaceuticals or simply better at talking about it? And beyond compliance and certification, what does it actually take to build a commercially successful cannabis

0:43 business in Europe? Today, we're exploring the realities of the European medical cannabis market. from Germany's growing influence to buyer expectations, commercial execution, and what the future might hold. Joining me is Benjamin Rigodin, head of sales and

1:02 business development at Alpha Pharma Operations, bringing firsthand experience from the commercial side of European Medical Cannabis. Benjamin, welcome to the shift. Happy to be here. Awesome. Uh so

1:21 let's just backtrack a little bit because I really want to uh just quickly recap of how you and I met. Do you remember do you want to do you want to talk about that very quickly? Sure. So we met well first you messaged me I forgot was whether it was via LinkedIn or email and you said that you were in Malta and you wanted to

1:40 understand more of the Maltese medical cannabis market and who and someone who could speak about that in terms of with let's say information that is one of the leading GMP manufacturers here and then I responded saying uh yes I would love to meet because education is one of the

1:58 key points here at Alpha Pharma that we try to advocate for and provide awareness for. Um, so I saw that as an opportunity, especially you coming from the United States. I believe that it was a lot to discuss and we had a lovely coffee about it and the next time that you'll be in Malta, we'll be sure to give you a site tour here to see what

2:17 we'll be working on. But yes, that was the first time I met and and it was very important what you said there because uh I reached out and I was like I need someone to educate me and you did really did educate me quite significantly on the European market and that's why we ended up being in this situation where I'm like all right I want you to share what you shared with

2:36 me further more so that people can also um get to be educated by you as well given your expertise and experience. So, um, yeah, that was and it was a pretty pretty nice coffee. Um, so, okay, let's let's dive a little bit, uh, into it. Uh, because you've been working on the

2:54 commercial side of European medical cannabis where companies are trying to expand across markets with very different regulatory frameworks and operating conditions. Now from your experience, are we getting better at talking like a pharmaceutical industry than actually operating like

3:13 one? And where do you see the biggest disconnect between ambition and execution? All right, that is a very interesting question and it was a very good one. Um just to provide some context uh in terms of Alpha Pharma, essentially Alpha Pharma is an EU GMP part one finished

3:32 product certified site here based in Malta. We do finished product for medical cannabis SKUs and we release them directly to the European market. Uh currently we import from five countries and we export to four. So we understand that each European market let's say holds a different regulatory framework

3:51 and understanding each let's say country's uh European domestic guidelines is very important in answering this question let's say so now to circle back to your question um in short I believe we are getting better at talking pharmaceutical terminology or

4:10 like proper pharmaceutical company coming from conventional pharma however where we currently are standing today is that we are not consistently operating like one. Um, and this stems from the fact that medical cannabis is a growing industry, a relatively new one within the European Union. Um, and how the

4:31 regulatory framework and certain regulations for on boarding and supplying let's say pharmacies and hospitals across Europe is still being written. So what this means to say is that even if you have good flour, competitive pricing, and even an EU GMP certification like ours, doesn't automatically mean that you can supply

4:50 these markets. Every country has different regulatory expectations, even those that all fall under the same European uh union, let's say, guidelines and laws. Um, and each country has their own commercial dynamics and roots to market. So at Alpha Pharma we focus

5:08 specifically on country by country understanding the supplier qualification the compliancy aspects processing product qualification supply planning and the regulatory expectations and requirements for that specific country with the ability to create a longlasting supply chain and adapting to that let's

5:27 say specific markets regulatory and pharmaceutical needs as well as their commercial patient needs. Um so in short we focus on building repeatable supply models then chasing short-term opportunities and you can only achieve this by understanding each domestic market or each European markets let's

5:46 say requirements. So on one hand we speak about Europe as one market but if we really look in let's say in further depth it's actually let's say one jurisdiction that is built on several different markets within it. So let's

6:04 say the regulatory market between Malta, UK, uh Germany, Poland, Czech Republic, all places that we're either currently active in or currently on boarded or in the process of on boarding and registering with all have different requirements. Even though they all fall within the European Union, each except for the United Kingdom, they all have

6:22 their specific requirements that allow that pushes us to either adapt to be able to enter the market or we shy away from it because they're just too different from their from that of their neighbor. Got it. Can let me follow up on that one because um I know as a fact this is an

6:41 extremely complex matter and uh obviously you guys probably do have a lot of you know lawyers involved in it people that really do understand uh and navigate through those regulations but can you give me an example of of the differences when it comes to these countries in EU what what is like the

7:00 difference when you want to work with let's say as you gave an example Czech Republic versus I don't know let's say Germany G give me one example of where where those differences are. Um okay I can uh perhaps I can pick countries where the differences are even more prevalent. So I would pick let's

7:18 say let's take the three largest let's say Europe markets. I won't say European Union markets because we're going to include the UK in there. So that being that currently it would be Germany as number one in terms of volume doing around 200 tons this year. Then we have the United Kingdom following up and currently it's only expansion phase. And then I would say the next emerging

7:37 market would be that of Poland. So Germany being the largest let's say highest value European market to date has in my opinion the least stringent or the less let's say regul less enforced regulatory framework than the rest. Um

7:55 this means that to be able to reach the patient there's a lot less regulation involved and for example this could be taken from uh the stability approach. So stability in long story short it is the shelf life we assign to the finished product uh for patient use in Germany

8:13 they accept let's say a range that covers let's say potencies between 14 to 36% under the assume that you bracket them within a certain percentage variance from each other. So you in alpha pharma we cover three sections which is low, middle and high. But then in comparison to let's say Poland the

8:31 requirement is that the shelf life assignment is done through a stability study that is what we classify as strain specific. Meaning that we cannot bundle let's say potencies under let's say a number of strains under the same potency range and use the same shelf life like we do in Germany. while in Poland each

8:50 specific strain requires their own shelf life uh or stability studies conducted and then you have UK which is in the between obviously to produce a stability studies to be able to assign a shelf life it is a costly endeavor um because we as we know this is an agricultural

9:08 product that has to be tested within let's say 3 to 9 or 12 months and we take it at different time points and uh it's not cheap to do this exercise so in terms of Germany the stability Like that's one example of the stability approach in terms of let's just say registration process between Germany and let's say Poland. Poland has a one-year

9:28 registration process by standard on estimate versus Germany it is ranging between two to three months. So also the time for route to market is a lot more let's say fast-paced and making it more accessible and because of let's say in comparison between the two examples

9:46 between Poland and Germany Germany has a more let's say relaxed regulatory framework allowing competition to enter easily uh allowing for let's say over supply of the current market right now which now it is currently which is now transition positioning into

10:05 a price compression which has been ongoing for the last 36 months versus Poland where their prices have remained the same relatively over the last 3 four years due to the reason that it's so hard to enter meaning that there's not enough supply to even push down the prices further down. So that that would be one comparison and then we have the

10:23 UK which is not part of the European Union. So technically they abide by their own domestic laws and they don't follow the European guidelines with the same full in effect or enforcement as the other European countries do. Why? Because they are not part of the European Union. So just to point pinpoint differences amongst different

10:41 countries even two of them following in the European Union one has a let's say simply a registration process that can stretch from two months to three months while another can stretch from up to one year as a minimum. Got it. Okay. And now that you since

10:59 you've mentioned UK and Germany, I wanted to to also sort of touch on Germany specifically because Germany has become one of the most influential markets in European medical cannabis and naturally a lot of companies are looking at it as a blueprint for expansion sort of. Um but from your perspective,

11:20 are we making the mistake of assuming that um what works in Germany will work everywhere else? What have you seen that suggests other European markets might develop differently? So I am 100% in agreement there where if someone were to take Germany as the

11:39 copy-paste blueprint to apply in other European countries, I believe this is the wrong approach. I do believe that Germany is the most important reference point for the European Union, but it is not a blueprint where you can copy and paste. Every market, as I mentioned before, has different patient needs, different let's say regulatory pathways,

11:58 distribution structures, and let's say price sensitivities against patients. So even though Germany is the leading market for in terms of volume value and the amount of patients that are being prescribed medical cannabis, each market

12:16 requires the same level of in-depth and understanding and you can apply the blueprint model on a country basis or country level. So if you look at Germany as a whole, I would look at at state level essentially and apply it in one state, copy paste to the next. I would not apply the blueprint of Germany to

12:35 other European countries because each has their own specific regulatory framework. Uh patient needs, patient demographic and just the relationship in terms of the stigma behind medical cannabis is uniquely different and acceptable at different levels between European countries. So you need to

12:53 approach it on a case- by case basis. At Alpha Pharma, we use our experience um in terms of understanding different established or emerging markets, understanding the patient demand, understanding what is required from a regulatory perspective and a commercial perspective and then and only then we

13:12 develop a sales strategy or market entry strategy to enter the market which has been quite successful to date. But we never compare we've never compared Germany to UK or UK to Poland or Malta to Czech Republic. We've all taken them as isolated countries that are completely different almost as if we're

13:30 comparing Germany to New Zealand for instance. So we really compare them as separate um let's say cases and we do our best to create a strategy that makes it commercially viable as well as regulatory viable for us. So in essence, we prioritize the sustainable expansion

13:48 over expanding fast into these quickly different countries uh by understanding the country on a case-by case basis. So we don't copy and paste markets. We replicate what works in Germany for example as a reference guide and then we adapt on what doesn't work in new countries. So Germany can teach you what

14:06 is possible but local execution determines what is commercially viable in the long term. Got it. So what I'm hearing is uh instead of copy pasting you would be looking at it from a perspective of we first examine then we copy then we paste

14:28 selectively while also altering if if that makes sense. Correct. We take we copy what is working in that country. We adapt to what needs to be amended in order to enter and then we create a commercial strategy that is long lasting as our partnerships they

14:46 range from three to 10 years. So we also we look at developing long-term supply structures that work in the basically for the long term allowing that the patients don't have any supply gaps as they get prescribed our product. But you're 100% right. Yes. Amazing. And what what you also said there which is very important is

15:05 obviously there's a difference between the actual consumers and patients. Um and this is something that also ties with um how everything is in the states as well both from the recreational and medical use too. Um, so here's what I wanted to check with you because working

15:24 in sales and business development at Alpha Pharma gives you direct exposure to what buyers are looking for and and while THC percentage and pricing might still be uh still open the door, what actually makes a buyer come back for a second order? Is it consistency, product

15:42 quality, reliability, or something the industry isn't paying enough attention to? This is something that we do have in the states as well where I'm having a lot of discussions with whoever I have on the podcast is what differentiates a brand from uh one brand from the other brand and uh um this is a question that also uh pops up quite frequently.

16:03 No, you you're right on the door there. Um so in terms of what drives repeat business and longevity THC percentage and price like you said might open the door but that doesn't guarantee patient loyalty or patient let's say repeat business buyers essentially and which is

16:23 becoming more prevalent today especially in Europe due to the change in constant change in amendments in regulation is consistency in meeting specifications of the flower uh reliability of delivery because in our industry especially In Europe, there's always delays. So, delivering as timely as possible is a huge USP factor. Um, having the correct

16:43 documentation and the transparent communication to, let's say, navigate through this complex industry with our suppliers and partners alike. So the one thing that we pride ourselves here at Alpha Pharma is that we take our let's say supplier qualifications very seriously because there is a clear let's

17:02 say quality expectation um been given by our customers that we have to apply to our suppliers and then in parallel we coordinate a let's say a production and supply chain planning that tries to minimize delays as much as possible but anyone knows in this industry um nothing

17:21 ever gets delivered on time. Now in terms of repeatable business um that is becoming the most important factor in the European market because of the let's say the huge level of delays and let's say supply shortages and let's say unsolidified supply routes the need for

17:40 let's say consistent supply to patient is now outdriving the importance of THC percentage um in the long term. So you may be able to get your first order which can prove a sale but then the second order proves whether you can deliver and while the third is there to prove the longevity of

18:00 the bu the business relationship you're trying to grow. Okay. So roughly after the third one we're talking about retention completion sort of in a way. Exactly. Got it. um retention completion but you would need

18:18 to do it in a consistent manner. So yes, you can get the third order but uh after let's say the second or the third the customers and the patients and the distributors or our business partners will start looking at how you can keep up this let's say consistent and reliable supply chain while the first

18:36 one it is simply on the product itself and the patient acceptance of that product. Got it. Okay. And I feel like you sort of answered this, but I want to just also touch a little bit more from the company's perspective as well because uh pretty much from from what you've experienced, I'd like to know where do

18:56 companies struggle most when translating pharmaceutical credibility into sustainable commercial relationships? It would be abiding by the regulatory framework with enough evidence that other authorities cannot question it in

19:14 judgment. Let's say the biggest the one thing that I've realized within this industry, it's one of the few if not the only medical let's say market that was derived of a black market. And because of that we need to understand that first to understand who are the players that

19:33 are in this industry. Are they all pharmaceutical professional or these are ex black market let's say business professionals that now want to do it in a white market but they may have the same mentality as they were in the black market. So this has caused a lot of let's say distrust in the industry

19:51 because you have half pushers and half pharmaceutical professionals. for example at Alpha Pharma uh aside from myself the rest of the team all comes from conventional pharmaceutical background who's been in this let's say in pharmaceutical industry for conventional pharma at least for the last 20 to 30 years me being let's say

20:09 of a sales background and the only one who didn't come from let's say the conventional pharma so they understand the regulation and what is required of them not because of it being medical cannabis but because of what was required of them when they were in traditional pharma now moving into medical cannabis All they have to do is now adjust their mentality towards

20:29 conventional monograph of pharmaceutical medicine to medical cannabis monograph versus other people in this industry have to transition from a black market mentality to a fully regulated medicinal cannabis let's say industry which then provides the biggest gap is going from

20:47 changing let's say a 10% of an angle to doing a full 180 and because of that people ultimately don't understand the industry struggles, uh don't understand how long it takes before you get your first return on an investment and because of the cash flow constraints and let's say business let's say on the on

21:05 the financial aspect of most businesses they need to drive value at the end of the day so they try to find interpretations in our guidelines find I would call them as cheeky loopholes and in order to get to the root to market faster the only issue with that it may work tomorrow but it may not work in the long term but that would be the biggest

21:23 gap I see is those who came from let's say not from a pharmaceutical background they don't understand or they are learning now what is required of them because we follow the same regulation as traditional pharma essentially if not more intense because this is medical cannabis with their social stigma around

21:41 that. Got it. So, you definitely have to adjust your mindset to fit the standards uh even though you're coming from a background that is not really tied to pharma at all. Otherwise, you're going to be in big trouble. Yeah. Exactly. Exactly. And then it

21:59 actually in turn hurt the industry as a whole. You know, people forget that at the end of the day, we're really trying to provide a better alternative medicine. We don't convert any new patients here at Alpha Pharma. We only take existing ones with selective let's say um medical issues like let's say

22:18 palliative care or chronic illnesses and we take uh let's say soldiers with PTSD and if their current form of let's say medication is opioids for example and that is the only let's say available let's say valid medicine for them to

22:36 take today. We believe that there is a better alternative medicine that can be supplied under the correct regulatory parameters. So understanding this and understanding that the priority is patients first, I understand that everyone needs to be commercially viable. But if that means jeopardizing the patient safety first, then we should

22:56 not be doing this in the first place because that was not what this mission is. And the people who try to rush to market, take loopholes or try to find different interpretation of the guidelines, it puts our entire industry in jeopardy. And if one day the European Union says no more because too many businesses have cut corners, then we put

23:16 the future of these patients at risk for the long term. Makes sense. Now, so you've given your experience, you've watched European medical cannabis develop from both an operational and commercial perspective. And let's try to to create this like

23:36 sort of a possible scenario. If we fast forward 5 years, um what's the one thing about this market that almost everyone believes today will turn out to be completely wrong? Um in my opinion um a big portion of how

23:56 the supply chains are set up today um for example it is what we specifically call the GACP transportation supply chain which is the transportation of GACP certified flour which GACP stands for good agricultural and collection practices. it is the cultivator let's

24:15 say requires certification um to cultivate let's say medical cannabis however and which now supplies around 60 to 70% of the European market in terms of transporting flour from overseas into Europe people have preferred this model for the longest

24:33 time both from a commercial aspect but from a regulatory perspective and also in the eyes of Alpha Pharma this has been a model that we never believed in um for example we've never imported a single gram of GACP flour into Malta uh due to our interpretation of the EMA guidelines

24:52 specifically of Annex 7 right and we are now hearing that government authorities across Europe would like to implement more stricter standards in terms of understanding how product is passed under GACP certification then GMP certification and then ultimately to a distributor who is a GDP

25:11 certificate And people believe that this model will last for the next couple years um due to the fact that too many patients are dependent on these supply chain models. But I believe that as soon as that there are enough certified EU GMP part one and part two certified sites that are

25:30 supplying to the European Union, then they will remove this route completely and entirely at all because how it's currently being used in our eyes goes against current regulation in my opinion. Um long story short there is how it says is that technically speaking under Annex 7 you have let's say a process or let's

25:52 say the final harvesting process that are done at the last stage of the GACP certificate which is essentially to reduce moisture content of the flower to allow the transportation of the flower to a processor or to a final drying process which should be done under a GMP procedure. Currently, people right now

26:10 are transporting overseas fully dried GACP flour which is illegal because it has not been done under the GMP procedures and because too many patients depend on this model. I believe G and we believe that current government

26:28 authorities cannot enforce it in full effect because this will put patients in jeopardy. But as soon as there's enough supply being done properly and routed to the European market, then they will close this route indefinitely. And this will in our eyes ideally create a price shock in the market allowing it to restabilize a bit.

26:48 Okay, that's quite interesting. All right, that's uh very eye opening also. Um, okay, one last thing that I have for you today and I so this is going to be like a one-word association game. I'm gonna tell you the name of the market. I want you to tell me the first word that comes to mind that you'd compare that

27:07 market to or whatever association you might have. All right. All right. Let's do it. All right. Let's start off with United States. Huge, largest market in the world. Okay. What about Germany?

27:25 Requires education. Okay. Interesting. Let's do UK. UK stubborn. That's a good one. Um, what about uh EU?

27:44 Emerging in the right direction. I know this is one word association. Okay, here. One word. Needs to be tougher. Needs to be tougher. Okay. And let's do one more. Malta

28:02 needs to move faster. Okay. I I I was actually expecting you to say Alpha Pharma, but Alpha Pharma, we're already running, but Malta needs to move. It's ironic because Malta was the first European country to legalize medical cannabis. That's why we built Alpha Pharma here to have first

28:21 mover advantage. but due to how the regulatory framework in my opinion sits between Poland and Germany. So it's right in the middle. So we're not the slowest, but we're certainly not the fastest. And we're I would say Malta as a country, it's losing its competitive

28:40 advantage to places like Portugal, Czech Republic, North Macedonia due to the fact that there is a larger initiative to bring medical cannabis business to these countries than that of Malta. Hence why we are going to try to uh do the title sponsorship event for the exposition next year which is the

28:59 Mediterranean Cannabis Summit in Malta in October next year which you are. I will invite you to come. Thank you. Appreciate that. Uh, okay. Benjamin, this was an absolute pleasure and honestly, I feel like you did really a good job of representing um the information about the European market uh

29:19 especially uh Germany, UK and uh and Malta now as well. So really do appreciate that. Thank you so very much. Can you tell me where can people find you on social media? You can share whatever you feel like. So you can follow us either on LinkedIn or if you

29:39 have business inquiries you can find us up uh on Google. You just search us Alpha Pharma Operations Limited. Uh and uh again we are a startup that has been around for the last six years but now we are on the aggressive expansion. So we are always looking for key industry

29:57 let's say individuals. We also provide let's say educational material to Southeast Asia in order to begin lobbying there. I'm half Indonesian by background. So, uh I'm a big advocate for medical cannabis and whatever. We're open to all collaborations both educational, commercial or even

30:15 consultancy and with those who are like-minded like us in order to drive the industry in the right direction. Perfect. That was that was awesome. Would you want to share your LinkedIn as well? Yes, please. You can uh also follow me and message me on LinkedIn. I'm always

30:34 up for chats. If you ever want to have a discussion like I'm having with Filip, then please by all means spam me and I will answer for sure. Awesome. Amazing. Thank you so much again. Uh I really do uh wish you have a great rest of the day and we're definitely going to meet in future especially for the upcoming events that you guys are planning and also uh for

30:53 some other European events as well. Sounds like a plan. All right. Thank you.