As reported by Cannareporter
TEJ Virk, CEO of Akanda Corporation, which recently acquired Portugal’s Holigen for €26 million , has gained a reputation in the global cannabis space in recent years after building a solid career in banking and capital markets. Having taken over the assets of Bophelo in Lesotho and Canmart in the UK, Tej is committed to transforming Akanda into the world’s leading medical cannabis company and Portugal is a strategic point for expansion. Anticipating the future, Tej already has his eyes set on the adult use market and has a message for the Government of Portugal: “Legalize it before Germany”.
We met Tej Virk at Holigen’s facilities in Sintra, where we also met Tom Flow from The Flowr Corporation, who sold the Portuguese subsidiary to Akanda.
How did you start working in cannabis, what did you do before and how did you end up buying a medical cannabis company in Portugal?
I was born in Canada, studied there and moved to the UK in 2007. This was part of my banking career, which I did for about 15 years, focused on capital markets and finance where I helped lead more than 100 IPO’s (Initial Public Offerings).
I’ve helped raise billions of dollars in funding for companies in the healthcare, technology, resources and consumer sectors, and I really came across the cannabis sector in 2017/2018. That’s when I was starting to monitor things like legalisation in the US and Canada, where I’m from, and I thought that was a big social change.
I am a believer in freedom of choice and having access to things like cannabis which has real medicinal healing value and an excellent safety profile. My previous company was very involved in the sector and in 2018 I started meeting the CEOs of some of these big cannabis companies. Canopy Growth in particular was a client I worked with and built a relationship with and that led to a job offer to leave the bank and move to Canopy Growth where I was General Manager of their European operation.
Was that when you started a new career in Europe?
Yes, first based in London, then I moved to Frankfurt in early 2019. It was at Canopy Growth in Frankfurt where I learned the cannabis pharmaceutical business step by step. Supply chain, go-to-market strategy, products and how to implement them in Europe.
At the time Canopy was building a lot of business in several European countries, so I developed a network across Europe, South Africa, Latin America, Asia-Pacific and North America, it was an amazing experience.
I left Canopy in late 2019 to join Khiron Life Sciences as President for Europe with the task of building Khiron’s business there from scratch. Khiron is a vertically integrated medical cannabis company from Columbia, where they have a growth operation with a factory and clinics where they can put their products in the hands of patients.
It was an exciting challenge and I am very happy with the progress that has been made. I left Khiron in mid-2020 to pursue this opportunity and Akanda was a company I helped to found.
Akanda is a very new company, how did it all start?
Akanda is an international company, a wellness and medical cannabis platform founded in mid-June 2021, that’s when I joined as a co-founder. Akanda has brought together different companies from the international cannabis space, Bophello in Lesotho which is a large scale cultivation asset and CanMart in the UK which is our importer and distribution company. That was the beginning of a company focused on Europe and Africa, vertically integrated, which means “from seed to patient”, in order to have full control over the ability to bring consistent products to patients. We are a platform, which means that we bring our own product (we call it a 1P product), but we can also bring from third parties (thus, 3P).
How did you finance the company?
We financed privately. We had pre-IPO funding of over $5m and in parallel we started the IPO process in the United States, which allowed us to successfully list on the NASDAQ in March 2022.
The timeline was extremely fast, from the idea to the IPO took just 9 months. In total, we raised just over 20 million in the US.
How did you come across Holigen?
When we were doing the IPO, we started to look closely at Holigen in Portugal and really saw it as the missing piece in our supply chain.
Holigen brings many benefits to our company, such as European Union GMP certification, so it fits like a glove with everything that is happening in our African operation.
It has its own product and a wonderful team, which is completely complementary to the team based here, a lot of pharmaceutical expertise.
It really is a unique asset and we can’t wait to start working together. We are starting this journey now and there are many opportunities to expand, both with the 1P (Akanda’s own first-party-products) and on a B2B basis, the 3P (third-party products).
This is exactly where I am interested in supporting other growers who want to bring their products to market through processing and our facilities. This is a service that we are interested in offering, not just in a certain field but extending beyond that.
Bringing this unit to full legalisation and being headquartered in Europe, having access to European markets that are growing fast… I think it’s extremely important to be close to the market.
Do you also grow cannabis in Lesotho?
Yes we do. If you look at all the cultivation at Akanda, we have sort of a complete portfolio. Lesotho is growing outdoors in some basic greenhouses and also doing some post-harvest processing – drying and preparing the product.
All of this has accelerated since August of last year when we achieved GACP qualification, and we continue to make rapid progress. Holigen is an indoor grow, and for this we source different types of products with different strengths, that gives us a lot of flexibility in the supply chain.
We also have the outdoor and greenhouses in Aljustrel across more than 180 acres. So what’s really interesting is that when we put together this portfolio, I think we’re one of the few companies in the world that has the ability to enjoy the outdoor seasons in two hemispheres.
Lesotho’s seasons are inverted in relation to Portugal, so when they are harvesting, you start to plant here and that is a very different flexibility which we will use to our advantage.
One of the problems facing Portugal is that despite having legalised medical cannabis in 2018, four years later there are only two cannabis derivatives in pharmacies (Sativex by GW Pharma and flowers with 18% THC by Tilray) There is no CBD, there are no oils, there are no other types of flowers… What are your thoughts on this situation?
We were well aware of this when doing our due diligence in Portugal to understand the market. We had several consultations to really understand what is happening here in the domestic market, and we said publicly that we intend to invest in the distribution of products and seek seed partnerships in Portugal.
We believe that there is currently unmet demand in the market. It’s clear. If you look at our management team we have experience bringing medical cannabis products to different parts of Europe, such as opening up early stage markets. I think we have all the tools in our skill set and our asset base to be able to do that. It’s just that it will take some time and that’s what we’re focused on right now.
Holigen is quite a big company, are you going to move to Portugal? And will you keep the Holigen name or change everything to Akanda?
Holigen is a subsidiary of Akanda, as are Bophello in Lesotho or CanMart in the UK. We will always do what’s right for the market and what’s best for patients.
Akanda is really our brand, even if we make some product labelled with something we haven’t decided on… but I like the Holigen name, I like the Holigen brand, I think it has recognition and we want to build on that.
How much will you produce this year and next in Portugal?
Well, what I can say is that we have publicly stated that the capacity of the indoor unit in Sintra is around 2 tons per year and then there is an additional capacity to process third-party products that is 7 or 8 tons.
And then the operations in Aljustrel can produce considerably more than 100 tons, so we have a lot of flexibility and it is really in our interest to grow as fast as possible to meet the market demand.
That gives you an idea of the numbers, when we could reach these really has to do with the market and demand. One of the things I’ve said publicly is that we want to build a company that is profitable in today’s growing medical market in Europe. This is still a market that is in the early stages on a global scale and we now have an asset base that we think can help us get to that point.
At the same time, we would like to have the option of hyperscaling for the opportunity that can come with adult use or the “recreational” changes, as we have the outdoor location with that ease and ability to scale.
It’s a complicated equation to solve, because the switch can just turn on and so we need to be able to supply that market, but I think with this asset base we can do it. We have the ability to operate and grow quickly because of all that extra capacity.
So at the moment Akanda is only medicinal, but they are also looking at adult use?
For sure! We made it clear that our model is premised on the global medicinal market, but European countries are looking to open up adult use markets and that is something we will definitely focus on looking at.
We are building a scalable supply chain and I think being a part of that is a natural fit for Akanda. What that means in terms of brands and commerce I cannot predict, but I know that we want to be a part of what is happening in Europe.
We are monitoring what is happening in Portugal as well. I am hopeful and we will be ready to make changes as the government changes.
If you had the opportunity to speak to the Portuguese Government what would you say?
Well I would say a few things. First, ‘congratulations on making Portugal, probably, the center of excellence for cannabis in Europe’.
This is a fast growing industry where the impact on GDP in countries like Canada and the United States with tens of billions of dollar is very visible and I think helping make that happen here, taking advantage of the skilled people, the weather, infrastructure, was brilliant… so ‘congratulations’ would be the first thing.
The second would be ‘grab that lead and extend it!’ This is a chance to continue to be an advanced thinker and I am very aware that Portugal decriminalised all drugs in the early 2000s and the social impact it had.
I’m also aware of the different programs the country is doing to attract investment and I think it’s clear that legalising cannabis helps the economy and the community on issues like taxation, security, reducing criminal activity… all these things are, I think , just proven, obvious results that we’ve seen in Canada and the United States, where this has already happened.
And so, there is a chance here that Portugal could pull ahead. Germany may legalise in two or three years, depending on how the laws fit together, but there is a chance Portugal could continue to lead so ‘legalise before Germany!’
Why before Germany?
I think it’s a chance for the country to continue to earn this investment, to be the center of excellence, to have the entire value chain here and I think this is the first step towards gaining an advantage.
And what would you say to sceptics?
I think for sceptics I would say look at the examples, look at the studies. I think there is still a lot of misinformation and past stereotypes, prejudices and stigmas. Someone who has spent a lot of time analysing facts and seeing real life examples, I think it’s important to look again at countries like Canada. It is an OECD country, which has legalised it for years. It is still standing, society has not collapsed.
No, and consumption among young people, for example, has dropped.
Exactly, exactly! So I think the trends are positive and there’s been tax revenue as well, I mean… I think with what we’ve seen in places like Canada, it’s a chance to emulate the success of those countries and again be aleader in Europe, gain from the investment now and keep that talent here.
Some countries, such as Canada, have also included the right to self-cultivate, not only for patients, but for small local communities so that they can also improve access and their economy. What do you think of the right to grow at home?
Well, ultimately it’s about meeting personal need, whether medical or not. I think this fits with the same kind of idea that I mentioned earlier that there are personal rights and that people feel they can do that better than a company.
I mean, it hits the same points I mentioned earlier about legalisation and the benefits associated with cannabis. I think it’s a personal choice.
I think the cannabis industry has a lot of parallels that we’re benefiting from right now in Europe with a lot of the experiences that the industry has had in Canada and the United States, where, probably, there’s almost 20 years of experience of industrialising growth. So it all affects the quality. I think that’s another reason why people want companies to do this too.
What will the transition from Flowr to Akanda look like?
Well, we’re at the beginning of that journey and I think it’s a really complementary management team. I think Holigen has a lot of leadership here and so do we and it fits together like two pieces of a puzzle.
I think going back to one of your earlier questions, which I may not have answered directly, I don’t know if we’re moving to Portugal anytime soon but it definitely is something that could be a pleasant experience. I intend to have a presence here, a regular presence, and that will also help in the search for the global culture of our young company.
And how has your experience been here in Portugal?
Absolutely fantastic! Really, from a personal perspective, I’m really enjoying it and for me, as someone who has lived in different parts of Europe and traveled a lot, I’m really excited about the possibilities for Portugal and what’s happening here.