Pete Patterson, Chief Executive Officer of Valcon Medical, reflects on 2021 and looks ahead to the challenges and opportunities that lie ahead in 2022
BC: What are the main opportunities and challenges for the European cannabis industry in 2022?
PP: WE are witnessing an overall change to the industry as our colleagues and partners are transitioning into education and revenue engines, a transition much needed for the cannabis space.
As such, we move into 2022 with a cautiously optimistic frame-of-mind. The discussions around adult-use markets are exciting and welcomed; however, there is still lots of work to be done in the medicinal markets.
It will be critical for organizations to prepare for the upcoming changes in legislation while continuing to provide product to the growing population of medical cannabis patients across Europe.
The European cannabis industry still faces several challenges which must be addressed in the short term. First, shipping cannabis into and around the EU is a regulatory obstacle course that leaves very few companies standing.
As we see more countries adopt a medical cannabis program, some level of EU harmonization with regards to cannabis definitions, quality, and delivery will have to be adopted.
Furthermore, as the patient base matures, we will see an increased demand for a diversification of product formats beyond dry flowers and tinctures.
Finally, the risks associated with prescribing medical cannabis still falls on the physician, which is a risk many are still unwilling to bear. These hurdles will remain for cannabis companies operating in the EU market for 2022.
While the challenges mentioned above will add complexities to the daily operations of our EU cannabis company, 2022 does look promising.
The EU remains relatively underserved with regards to cannabis extracts; yet, there is legislation to support further deployment. 2022 could also be a banner year with additional EU nations on-boarding a medical cannabis program.
With the announcement of Germany’s adult-use program, the EU market should see an influx of capital to support that market development.
This capital will most likely favour those organizations already established and positioned to execute. Overall, we anticipate continued growth in the European cannabis markets and new expansion opportunities in some of the developing markets.
BC: How did you view industry developments in 2021?
PP: We invested into the European cannabis market back in 2018 and have patiently participated as the market has evolved.
Since our initial investment, the Valcon Medical team has built an extraction facility, developed a Quality Management System (QMS), purchased and installed equipment, and trained staff.
In 2021, conversations shifted from hopeful concepts into realistic progress, as Valcon Medical received its EU-GMP certification for manufacturing extracts, the team validated several products, initiated ICH stability studies, and onboarded new team members.
With the initial shock of Covid-19 behind us, the European cannabis industry learned to operate during the pandemic. 2021 brought the largest influx of licences granted across all verticals and we saw the evolution of the regulatory markets.
The European Cannabis industry was not operating in a bubble; it was proving to be, in fact, a highly resilient industry. Online access programs launched while the cannabis production and manufacturing community navigated additional complexities.
The cannabis conversation continued to spread across Europe and regulators and policy makers appeared more open to providing access to this much needed medicine.
The increase in licences and product distribution has helped to support a growing population of patients seeking medical cannabis. It is possible governments, and the EU, may see tax revenues from cannabis as a viable means of paying back some of the costs incurred to prevent the spread of Covid-19.
Supply chain issues were arguably the greatest challenge of 2021, making it difficult for companies to consistently supply products into the European markets.
We saw lots of one-off shipments and impressive press releases, but also saw a lack of consistent execution. Valcon Medical believes strongly that the consistent delivery of quality medicinal products will build trust with patients and ultimately develop the market.
I believe it’s safe to say that while the European cannabis industry faced strong headwinds in the last five to 10 years, we now have some much-needed momentum.
The cannabis companies who were able to endure the challenges brought by 2021, like Valcon Medical, are now positioned for a head-start for tremendous growth in 2022 and beyond.
For example, Denmark has moved from a pilot program into a permanent commercial program; Germany, Malta, Luxembourg, and Portugal all announced steps towards more liberal access to cannabis, and countries such as France have launched their own pilot programs to explore how medical cannabis will become a part of their society.