UK-based Cannabis start-up AltoVerde is aiming to not only take on the industry big guns but to de-stigmatise and promote the acceptance of a the cannabis plant. Jane Hall speaks to company founder and chairman Mitesh Makwana.
MITESH Makwana appears on the Zoom screen engulfed in white light.
The shutter behind him is failing to keep out the sun with the result that Makwana’s head is bathed in an almost Biblical halo.
It’s very apt. Because Makwana through his new company, AltoVerde, is on a mission to destigmatise and promote the acceptance and use of a plant that has been with us almost since the dawn of time: cannabis.
Time For A Change
Makwana – a veteran of the industry – says the time has come for a sea change and is banking on London-based AltoVerde being a key player.
He aims to achieve this through scientific research and innovation, and by producing high quality cannabis-based medicinal, wellbeing and recreational goods.
Makwana has pulled together a team of 22 professionals to help him reach this goal.
They include vice chair and CEO Bryan Willis, previously from a corporate background holding senior management roles, who is now the owner of Leeds-based SeedMadness, which trades in more than 2,500 varieties of cannabis seeds.
The managing director is Justin Rudd, who has more than 20 years’ distribution experience in the field, including with Basil Bush Ltd, which is one of the largest wholesalers of smoking paraphernalia in the UK.
The executive director is Lindsey Cunningham, who has worked for more than 30 years in the fast-moving consumer goods sector with clients such as Unilever, Danone, PepsiCo and Barilla, for the global brand consultancy, Landor.
Then there’s marketing director Bev Morris, whose experience includes time working with Trafalgar Scientific Ltd, Molnlycke Health Care and the Insulin Dependent Diabetes Trust.
No-One Taking Salary, Yet!
Makwana explains: “I have got together a small but good mixed team which is a broad spectrum from clinical to branding and marketing expertise, extensive horticultural and genetics know-how, food formulation, processing, cosmetics and shipping. The core team is made up of nine people but there is 22 in total with further collaborative advisors and partnerships.
“I’m in Spain, one is in Germany, but most of them hail from the UK. These are people I have worked with or known for many years and who together combine unbeatable individual experience as trailblazers in their respective fields.
“They share my ethos and we know that by working together we can achieve far more than we ever could do alone.
“As such, we are confident that we will grow AltoVerde into the leading, vertically-integrated, horizontally-diversified cannabis company in Europe.”
As yet, no-one is taking any salaries. “We are all in it to take the company forward,” Makwana says. “But once we get activity started we can offer salaries to those people we want working full-time. We have been careful not to jump the gun. We are thinking properly about which way to pick our battles.
“We want to be taken seriously, hence we have the right team to make a splash. But it is not about being in the industry just to make money. It is about educating the industry, the media, and ultimately the consumer about cannabis, showing it off and really getting the best out of it, which I don’t believe is out there yet. There is a lot more to be pulled out from this plant,” Makwana adds.
Two-Years In Planning
It is a big ask getting people to work for nothing. But Lindsey Cunningham says: “I don’t mind investing in the business by giving my time, because I believe that one day we will all reap the rewards.
“Meanwhile, the enthusiasm rubs off on everyone and the work is interesting and enjoyable.”
Justin Rudd adds: “After working in the industry for over two decades, AltoVerde seemed like a natural progression to further the goals of the cannabis industry. I have known Mitesh for nearly a decade and worked closely with him over that time in various ways, and I strongly believe in his outlook for the future of the industry and our place in it.”
AltoVerde is setting its sights high as the European cannabis sector opens up with a slew of countries either easing drug regulations, expanding patient access, or even potentially looking to unlock adult use markets.
It took two years to get the right team together and assess the route to the rapidly changing European cannabis arena, with Prohibition Partners estimating it will be worth €403.4m by the end of 2021 and develop at a compound annual growth rate of 67.4% between now and 2025, to reach €3.2bn.
AltoVerde was officially launched last year and raised £150,000 in an initial seed funding round. “We reached out to the team’s contacts and like-minded businesses and friends and family, and that has been our first seed funding round that has got us through,” Makwana clarifies.
Targeting £13m Investment
A £500,000 next investment round is on the cards, which Makwana says will potentially be a mix of private and crowdfunding. Equity fundraising will follow at some point. The five-year growth plan is targeting £13.1m in inward investment.
AltoVerde has wasted no time in moving forward with its “organic and close knit team.”
It has recently announced two partnerships with manufacturing operations in Macedonia – medical cannabis producer A&J Green House and Marijupharma D.O.O – as it sets out to make its market presence felt.
AltoVerde is currently concentrating on selling American derived ethanol, CO2 and water distillate extracted CBD wholesale as a raw ingredient, and working on getting its first cosmetic consumer brand to market this October.
A mint flavoured toothpaste containing 300mg of CBD formulated by dentists and marketed under the CB Defence label, it will in due course be joined by a mouthwash.
Other cosmetic-based and vape lines will follow.
The tie-in with A&J Green House located in Gostivar in North Macedonia, will open up new avenues, however. AltoVerde has entered into a 38% stake partnership. The deal equates to one of the largest sole supply agreements in Macedonia and sees A&J become the home of AltoVerde Genetics.
A&J will adopt AltoVerde’s grow room design, genetic breeding programme and grow techniques – including up-to-date hydroponics, soil and plain water with optimum nutrients – across 2,500m² of the facility’s greenhouses to breed, cultivate and produce precise cannabis-based and prescribed products and specials.
An additional area of more than 500m² will be for drying, packing and extraction operations.
Seed Strain Supply
Adding to the portfolio, AltoVerde has negotiated and agreed North Macedonia’s largest sole supply agreement with Marijupharma. Situated in Bogdanci, the partnership with see AltoVerde implement its grow room design and choice of hydroponic systems across 15,000m².
AltoVerde will initially supply 20 seed strains under the partnership to be used for medicinal product development.
Macedonia was a deliberate choice. Makwana says: “It is one of the few countries in the world with the legal right to grow and export medical cannabis, and the free-market approach makes it a very attractive place to do business.
“At AltoVerde we have acknowledged this potential and have strategically partnered with A&J Green House and Marijupharma D.O.O to develop a world class genetic breeding programme and deliver high-quality standardised products.”
Together, Makwana says, they will work to produce a variety of proprietary compounds for Active Pharmaceutical Ingredients (APIs) and medicines.
Makwana, who has more than a decade of horticultural cannabis experience specialising in hydroponics, indoor cultivation, selective breeding, and plantation management, is looking to take on the big North American companies such as Tilray and Aurora, who have got their foot in the European door via company buyouts and through their own operations in the likes of Portugal and Denmark.
‘Our Team Sets Us Apart‘
Whilst on paper AltoVerde is very much the new kid on the block, Makwana says: “It is our team and our roots that set us apart from the rest of the industry. Many of the people involved with AltoVerde have been active in this sector for several years and have spent considerable time honing their expertise in everything from cultivation to breeding, plantation management, clinical trials, chemistry and extraction.
“Cannabis has a lot of amazing properties, and here at AltoVerde we are passionate about unlocking its potential for both patients and consumers.”
Makwana’s own area of knowledge is in genetics and the medicinal side of cannabis, something he has picked up over the years. “I have been involved in horticulture and hydroponics since 2000. I moved to Spain, met a group of people who are of the same ilk, worked with them, and that is where it all started.
“We are all more or less self-taught. Spain is a very tolerant country and the people I met, their parents, uncles and grandfathers, had been doing it for ages gone by, so genetics and breeding is what they know.”
He says it is not easy working on genetics. “To get it spot on is very difficult. I have high standards and we work with a pool of people who have high standards too.”
AltoVerde is working with a current seed bank of around 50, although Makwana says it could be endless. He believes in working with other seedbanks and breeders, and deems it one of the main strengths AltoVerde can bring to the table, along with the firm’s ability to adjust to whichever way the market goes.
Whilst AltoVerde is ultimately looking to take on North America and Europe’s established cannabis giants, in the short term the venture will concentrate on the UK market. Makwana says: “I think currently, the medicinal cannabis side in the UK has just over 6,000 patients, and the suggestion is that by 2025 there will be hundreds of thousands prescribed.
“The UK is currently struggling to supply the 6,000 patients it has, so just in that regard we see that avenue as being the one to pursue.”
Growing is expected to start at the two Macedonian facilities within the next few weeks. “Then it will be full steam ahead with growing and looking for medical cannabis specials to put into the UK market.
“Just last week we more or less agreed collaborations with suppliers to do research into cultivation trials. Something should be available by the end of 2022 beginning of 2023. We are not just going to grow something and release it.
“We are going to be about the quality. We are going to be centred around the plant. It is not going to be about cutting corners in producing the end product.
“Why would we skip corners on making a good quality product when that is what we can really show off?”
Makwana explains that all of AltoVerde’s CBD is rigorously tested. “We first test internally for potency, heavy metals, pesticides, residual solvents and microbials, then test each batch again with a third party for total assurance. Certification is supplied to our customers.
“We work with a number of ISO certified labs in the UK for the cannabinoid mixing.”
AltoVerde’s clinical team is currently putting in place scientific trial and research and development plans and strategies, but nothing has as yet been finalised on how these will work.
The current aim is to generate sufficient initial profit through the wholesale distribution of CBD, backed up with fundraising in the first year of operations, to support the creation of AltoVerde’s own extraction facility, laboratories and growing operations.
Makwana says: “With our expertise we know we can satisfy demand from the medicinal and wellbeing markets. What we are doing is positioning ourselves to take advantage whichever way the market and regulations go.”