Lesotho now firmly on the world stage
Akanda’s CEO Tej Virk is crafting a competitive cannabis vision for Europe based on ethical sourcing. The new London-based company consists of Halo-Collective’s non-North American assets, primarily Bophelo Wellness in Lesotho and Canmart in the United Kingdom. In an exclusive interview with Cannabiz Africa, Virk said that compared to the first few months of 2021 where the international cannabis industry was “hard-pressed by regulatory headwinds, it was now being swept along by continual tail winds”. He said a new market momentum was developing in Europe in the wake of the pandemic and that reform was gathering pace in Switzerland, Italy, Luxembourg, Portugal, Malta and Germany, while one third of the Canadian and United States markets were now legal.
“Lesotho’s definitely on the world map this year which is a good testament as to how the private sector and the government have worked together. Lesotho has first mover advantage in Africa; it benefited from the initial green boom and even though mistakes have been made, the infrastructure is in place and a lot of legal medicinal cannabis is being shipped out. Virk said regulatory harmonisation between Lesotho and South Africa was the next logical development in the southern African cannabis market. “You have to have good partners in this market and South Africa is a good one for Lesotho. The National Cannabis Master Plan is definitely a step in the right direction and there are many international precedents to learn from since Canada showed the way”.
Ethical Cannabis Sourcing to Influence Patient Choice
He said Akanda was distributing Lesotho cannabis into the UK through Cannmart and was targeting the growing number of medicinal cannabis patients. “Our vision for the UK is to create a marketplace where we are democratising medical cannabis. If it’s all about patient choice then ethical sourcing becomes a powerful differentiator” said Virk. “We’re hearing loud and clear what’s been coming out of the Cop26 climate talks and the company has set out its own plan to achieve 12 of the 17 sustainable goals set out by the UN. We’ve adopted ESG (ethical social governance) as a central policy and are monitoring a range of things from monitoring water usage to ensuring gender equality”.
Virk said Akanda’s plan was now falling into place and that the company was valued at US$30 million. “We’ve engaged a lead advisor, Bousted, and we’re hiring more people to help us deal with the new commercial opportunities. We’re working on some exciting new channels and have been approached by various UK clinics. We’ve cemented access to Europe through Cantourage who will take Bophelo dried flower into Europe. Cultivation at Bophelo is going to be ramped up; we got our GACP certification in August (2021). It was a long time in coming but that enables us to increase our production and we’re in the process of taking the outdoor/nethouse grow up to producing 10 tons.
SA can ‘not rely on export only’
Virk said Akanda was “definitely paying attention” to what was happening in South Africa, “and if we have the financial flexibility, we’ll get in”. Virk said Akanda would probably look higher up the value chain if it invested in SA. We’d be looking for optimisation, probably getting involved in extraction. At the end of the day it’s all about returns”. He said that he expected SA to eventually get round to a local legal adult-use market. “In the long run you have to have a domestic market, you cannot rely on export only”.
“South Africa should look at Stellenbosch to see what the wine industry has done to get an idea of where the new cannabis industry could go” he said.
Virk appears ambivalent about Africa’s apparent “lowest-cost producer advantage”. “The low cost idea gets thrown around a lot but it doesn’t necessarily come with high quality. You get what you pay for and in the medicinal cannabis space you have to go for quality; to do this you need control and control increases costs”.