In our latest episode, we’re joined by Peter Sigetty - COO of Valcon Medical - Danish medical cannabis contract manufacturers of Pharmaceutical-Grade Cannabis Extracts.
Within the context of the European medical cannabis supply and value chain, we explore the dynamics of vertical integration and how sector specialisation can help businesses navigate the complexities of the European market.
Peter Emil Sigetty is co-founder and COO of Valcon Medical. Peter holds a M.S.c in Economics & Business Administration and has a professional background in finance and accounting. Peter has worked in the medical cannabis industry since it’s inception in Denmark in 2018 where Valcon Medical was founded.
- Peter holds a Masters of Science in Economics and Business Administration and has spent multiple years working within finance and accounting across a range of industries.
- He joined the medical cannabis community by coincidence after noticing a flurry of investments into the space after the legal framework for Medical Cannabis in Denmark changed in 2018. He recognised cannabis’ influx into Europe as a once in a lifetime opportunity to become involved within the space.
- After networking within the industry, he connected with two like-minded entrepreneurs who had previous experience in cannabis extraction within North America, who together identified a gap in the market for a contract manufacturer in Denmark.
- Peter and his team encountered stigma at the start of their journey in Denmark - including some challenges from the banking sector.
- Valcon Medical is situated within a pharmaceutical cluster, so are perfectly positioned to make use of existing expertise and knowledge from the medical sector.
- Valcon Medical provides contract processing services, white label products, and supply of raw material to outsourcing partners and customers within the European medicinal cannabis industry.
- The company is licensed under the Danish Cannabis Pilot Program by The Danish Medicines Agency, and hold a European Union Good Manufacturing Practice (EU GMP) certification for the manufacturing of medical cannabis extracts in compliance with the German Monograph for cannabis extracts, DAB Eingestellter Cannabisextract as of May, 2021.
- Valcon Medical has spent the past year developing their white label product offering, which includes a THC cannabis oil, which will be market-ready later on this year.
- There are many opportunities for growth within the European market, but a lack of harmonisation and consolidation of rules and regulations on a countrywide basis means the regulatory environments are diverse, making them difficult to navigate.
- There are several differences between European markets, not just on a regulatory or distribution level, but culturally too. For example - Germany has a long history of herbal medicine, whereas Denmark takes a more conservative, pharmaceutical approach.
- Valcon Medical started its business journey by raising money from friends and family, before moving on to secure investments from Artemis Growth Partners, and Canadian based Greenfield Global Opportunities Fund.
- A vertically integrated company manages the entire value chain in-house.
- Within the cannabis industry, there are many steps within the value chain including cultivation, breeding, genetics, extraction, and product formulation. Last comes distribution and sales.
- One of the main advantages of vertical integration is that you maintain control over your supply chain and value chain, meaning expertise is kept in-house, and you do not have to rely on third parties.
- On the other hand, vertically integrated companies can sometimes spread themselves too thin, spanning across a number of activities, rather than specialising and perfecting any single or multiple parts of the value chain.
- Specialisation within business means depending on other companies and parties to deliver you services or products, which in turn reduces your margin. On the other hand, being independent of your value chain gives you the flexibility to pivot to meet changing market demands or consumer behaviours.
- Specialised cannabis businesses can navigate the differing regulatory environments within Europe by partnering and collaborating with localised companies who have ‘roots on the ground’ within their relative jurisdictions, who will be able to advise on localised rules and regulations.
- Peter predicts that future developments and innovations within the cannabis space will include new delivery methods which increase bioavailability, the introduction of API’s to cannabis oils, and the introduction of pharmaceutical style pipelines that will produce evidence-based clinical data for medical cannabis products.
- Europe cannot be treated as a whole when it comes to medical cannabis
- I believe as the scope and product variation and the patient base grows, [medical cannabis] will be more commonly recognized [by doctors]. But there will always be reluctance.
I'm?Anuj Desai
- a commercial advisor, lawyer and founder of Canverse
- a strategic consultancy helping founders, entrepreneurs and businesses navigate the emerging cannabis industry.
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Co-Founder - Epic Hub Media
2 年Looking forward to listening, thanks