ATANN, a Portuguese company founded in May last year, is poised to become the country’s first cannabis contract manufacturer.
Its business model sees it offer an upstream and downstream ‘one stop shop’, from drying, packaging, curing, white labelling and storage all the way to extraction and purification for bulk API (Active Pharmaceutical Ingredient) supply. An onsite lab will enable rapid in-process checks and testing.
This will allow medical cannabis and CBD brands the ability to expand without the high capital-expenditure costs associated with developing their own facilities.
And, one of its prime objectives is to offer Portugal’s rapidly-growing cultivation industry a reliable pathway to the European market.
Atann was created by a core team of four cannabis industry veterans who met working for a separate company in Portugal, and identified a significant gap in the market.
Primarily this was the absence of a contract manufacturer which are favoured by large pharmaceutical companies in order to reduce risk and costs.
Atann’s CEO Edward Duffy, says there are around 80 cultivators in Portugal currently trying to attain GACP (Good Agricultural and Collection Practice) certification, with just 11 currently holding a licence.
On the manufacturing side, there are around five companies which hold GMP (Good Manufacturing Practice) certification, with just two of those in operation.
“And out of those two companies, neither of them are offering contract manufacturing services,” Mr Duffy told BusinessCann.
“So there’s a significant gap that we’ve spotted, and kind of that’s what we’re focusing the business model on is to be a solutions provider for the GACP industry.”
60 Years Experience
Its core team has a collective 60 years experience in pharmaceuticals and medical cannabis, including API contract manufacturing, extraction and purification, cultivation and genetics as well as the design and commissioning of GMP facilities across Europe.
Together Atann’s team have successfully attained eight GACP and GMP licences across different continents.
“There’s a lot of companies that don’t have the capex to go for GMP. It takes a lot of knowledge and a lot of experience. It’s a high barrier game to get into GMP.
“What we’re offering is basically a regulated pharma pathway to transform GACP compliant cannabis into GMP certified cannabis medicine,” said Mr Duffy.
While Atann will not be the European cannabis industry’s first contract manufacturing company, Portugal’s booming cultivation market puts it in a unique position.
Portugal is ‘fast becoming a home for the GACP industry’, says Mr Duffy, due to its ideal climate, low set-up costs and access to both highly skilled and low skilled staff.
“We see that there’s a significant opportunity to serve these GACP companies because we’re on their doorstep, they don’t have to ship their product to other European companies or other European countries.”
Many of these companies are growing product that is not meeting GACP specifications, meaning they are forced to either sell their crops as biomass or dispose of it all together. This is in large part because the growers are unable to access good genetics.
Atann intends to become the first company in Portugal to offer cryogenic freezing of these crops, as well as providing growers with certified first generation clones to ensure crops meet required specifications.
“If we can do those steps here in Portugal, it saves money, it saves time, it de-risks the transportation product from A to B to another European country,” Mr Duffy explained.
Opportunities For Overseas Companies
Alongside helping local growers find a route to GACP certification, its model also allows companies from overseas significant opportunities to break into the European market.
“Suddenly there’s a lot of opportunity for specifically Canadian companies, maybe South American companies and even African companies to ship their product up here,” he continued.
“There’s a massive, massive opportunity here for Atann to manufacture and do all the EU GMP steps for companies that are not located in Europe, for sure.
Company Structure And Services
Currently Atann is composed of two Portuguese entities under one banner, including Galaxiavertical which focuses on GACP operations, and Lompostran which handles the GMP side.
Its operations are split into three main areas. The first focuses on supplying first generation certified clones to licensed cultivators, by growing mother plants, taking cuttings and selling the clones.
Atann already has a supply agreement in place with a Canadian tissue culture company which will supply it with consistent clone samples every three months. Once it attains its GACP license, expected to be in Q1 next year, Mr Duffy says Atann is poised to begin selling these clones immediately and already has a number of interested clients.
Alongside offering cultivators a freezing and storage service of their crops, which Atann can then sell on to its GMP company, it will also offer a THC denaturing service. This will reduce the THC content of waste crops below the 0.2% threshold and allow them to sell it on.
Second, Atann will offer dry flower processing services including drying, packaging, white labelling, storage, curing and testing via its onsite lab which it acquired pre-licensed from the Portuguese authorities.
In roughly Q3 of next year, Atann plans to be licensed for extraction and purification, representing the third major focus for the company. This will enable it to produce and sell bulk APIs to pharmaceutical and FMCG companies as a finished product.
Series A Fundraise
Atann recently began preparations for its Series A fundraise, and aims to use the proceeds to install, commission and validate the GMP side of the business.
Mr Duffy says that while the fundraise is ‘still very much at the start of the process’, with a number of traditional pharma investors already interested, adding that regardless of the fundraise Atann could still reach profitability with the GACP side of its business next year.
The company hopes its flexibility and potential to create revenue as soon as it attains licensing will attract the right investors, specifically those with a ‘biotech healthcare’ background who recognise the contract manufacturing model and its potential to transition cannabis companies into a more traditional pharmaceutical route.
Atann will be attending Cannabis Europa, taking place in London on November 10 & 11.