As a Guernsey-grown business expands into Europe, the challenges facing the medicinal cannabis industry locally have again been highlighted with the loss of an opportunity to create around 40 jobs in the island.
Established in 2019, The House of Green has entered into a joint venture with Proto Global GmbH, the German parent company of Schaeffer Nutraceuticals.
Paul Smith, CEO of The House of Green, said the deal will see the firm relocate its fully operational cannabis extraction laboratory from Guernsey to Poland, with regulations likely to change in various EU countries in the near future enabling the extraction of cannabinoids for the manufacture of products.
“We are delighted to be working with Schaeffer, part of the Proto Global group, who we have known for some time," said Mr Smith.
Pictured: Paul Smith, CEO of The House of Green.
"This joint venture is a great opportunity for us to press forward with our strategic aim of becoming a leading manufacturer and distributor of cannabis and cannabis related products in Europe. Our recent experience in Guernsey of seed-to-sale operation, and the increasing success of our retail stores, Bailiwick Botanicals, places us in a great position to bring all our knowledge to bear in the European market with a growing European consumer and investor base.”
The newly built GMP certified facility at Kostrzyn in Poland - which is already manufacturing nutraceutical products for Schaeffer Nutraceuticals - will replace The House of Green's former facility in Guernsey which closed down last year.
While it won't make any difference to the business in Guernsey as that site had already closed, The House of Green believes that the challenges facing the industry locally will cost the island in the future.
"There will be no further job losses in Guernsey as a result of this move as we had already closed down the operational part of our business in Guernsey last year and unfortunately had to make some redundancies at that time," explained the business.
"Due to the success of our shops in the Arcade and at the Bridge in Guernsey we have actually recently been taking on additional staff.
"It does mean, however, that we will not be staffing up a cultivation, extraction and manufacturing operation in Guernsey, which could have employed up to 40 people in the foreseeable future and this will now be done in Europe. It also means that Guernsey will not now benefit from this element of our business and the tax revenue that it would have generated.”
Pictured: Deputy Neil Inder has previously championed medicinal cannabis for its potential "diversification to our economy [and] revitalisation of our environment" - however challenges persist say local business The House of Green.
In January last year, Express reported how some local growers said they had lost hundreds of thousands of pounds in a dispute with The House of Green.
The company had seen its application for licences to cultivate cannabis rejected by the Bailiwick of Guernsey Cannabis Agency, and in turn it had said that the Channel Islands Cannabis Industry Association was concerned about the island's licensing system.
That licensing system was set up by the States’ Committee for Health & Social Care in 2021 but the Association and the company said they had a number of concerns about how it was progressing.
In contrast to the challenges faced in Guernsey, the site in Poland also has planning permission for a second building, which will be built to EU-GMP pharmaceutical specifications and more than double the capacity of the existing operation to 3,000 m2.
“Schaeffer Nutraceuticals is very excited to be working with The House of Green, and we see significant benefits to both companies from the formation of this joint venture. It is our intention to work together to grow the range of products available to our combined customer base throughout Europe.” said Ziya Gaziyev, CEO of Proto Global.
In addition to manufacturing and packaging CBD and other products in Poland, The House of Green will work together with Schaeffer to establish a distribution network for cannabis-based products and medicinal cannabis hardware throughout Europe and potentially introduce a line of nutraceutical products containing cannabinoids and leverage Schaeffer’s existing distribution network.
Gary Tucker, COO of The House of Green commented, “this is a very exciting time as the legalisation of cannabis is looking increasingly likely in Europe.
"For The House of Green, this joint venture represents a significant step forward as we build out our business model for the European market and operate from aGMP certified facility. As well as expanding our successful retail business direct to consumer and via distribution channels to other retailers, our patented extraction processes will enable us to manufacture own brand and white label cannabis-based products in the heart of Europe.”
Pictured: Bailiwick Botanicals is recruiting more staff for the retail side of the business which has shops in Guernsey and Jersey and outlets in Alderney and Sark.
While the manufacturing process will be carried out in Poland in the future, the retail side of The House of Green business is said to be thriving.
There are currently three Bailiwick Botanicals stores in the Channel Islands, which the firm said generated £700,000 in revenue in 2022. They are targeting revenue in excess of £1 million for 2023 by further expanding in Guernsey and Jersey. There are also established sales outlets in Alderney and Sark.
The partnership between The House of Green and Proto Global GmbH will see Bailiwick Botanicals - the retail side of House of Green - opening shops in Europe with Germany, Malta, Netherlands, and Czech Republic all likely locations as laws surrounding the legal use of cannabis for adults continues to change across the EU.
The House of Green said it is also seeking additional investment as the joint venture builds out its facility in Poland, develops its distribution network throughout Europe and establishes its retail stores across Europe as potential new markets open up.
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