EMMAC CEO Antonio Costanzo believes its purchase by US and global leader Curaleaf is a signal to Europe’s politicians that it is time to embrace the cannabis industry.
Speaking to BusinessCann, following the conclusion of the $350m deal, he said it was the quickest transaction he has completed – signed and sealed in a little over a month.
And, he foresees a situation where Curaleaf recreational cannabis stores become a feature of Europe’s High Streets.
He said: “This is a game-changer for the industry, and for European cannabis market. It’s a very important moment for Europe, as a whole, and validates the quality of the other European companies.
‘Embrace And support’
“The politicians need to acknowledge the significance of such a big multi-billion dollar company wanting to enter the European cannabis market. It’s a great success.
“It’s time to embrace and support the development of the industry which can create new jobs and deliver a new source of revenues.
“This is the right time to support the industry to help take it on to a new level.”
London-based EMMAC has 120 staff with revenues slated to be $35m for 2021; with Curaleaf’s support it is looking to move on to $100m in 2022 with further rapid growth to follow.
It is vertically-integrated medical cannabis and CBD wellness business with with cultivation, EU-GMP processing, distribution, and R&D operations including UK business such as Rokshaw Labs and CBPM Access, a medical cannabis pharmacy.
Curaleaf is vertically-integrated in 23 states and operates more than 100 cannabis shops. Its 2020 revenues are around $600m with this expected to double to $1.2B this year.
‘Best Of Both Worlds’
Mr Costanzo believes their partnership will deliver the best of the both of these worlds.
“On the one side you have America’s largest and most successful cannabis CPG (Consumer Packaged Goods) company in the US and on the other side one of the European cannabis industry’s leading companies.
“Curaleaf knows about the products that consumers want, in the different segments of the market, and we have the expertise in delivering pharma-grade medical cannabis products to patients.
“Its experience in US market will help us to anticipate and lead the way with developments in the European markets. They will have already experienced the things that we will see happening in Europe and this will give us the advantage of being prepared.”
EMMAC believes the short to medium term benefits for the partners will be in the medical cannabis and CBD space and moving on from there, into the recreational space.
Recreational Moves Afoot
Israel, Germany, Denmark and the UK are all making progress with medical cannabis – and recreational moves are afoot in many European countries including; Holland, Switzerland, Italy, France Germany, Malta, Spain and Portugal.
Joseph Bayern, Curaleaf CEO, said in a press release announcing the deal: “Based on consumption habits we have seen in the U.S., we believe that over time Europe could grow to in excess of a US$120bn total addressable market opportunity.”
EMMAC had been exploring a listing on the London Stock Exchange but moved quickly once Curaleaf’s ambition became apparent.
Emmac investor Measure 8 is chaired by Boris Jordan the founder and chairman Curaleaf which helped ease the flow of the deal.
He added: “Curaleaf wants to position itself for the next big growth opportunity, and that is Europe. They approached us about the possibility of putting both companies together and building a global leader.
“They have the strategic strength and power to expand, accelerate growth and help us consolidate our leading position in Europe; in four to five years we will see the real benefits of this alliance.”
He added: “Curaleaf has a great reputation and its stores have great brand recognition so I would not be surprised to see the company replicate that model across Europe.”
The deal announced on Tuesday March 9 matches Massachusetts-based Curaleaf Holdings, the world’s largest cannabis retailer with Europe’s largest independent cannabis company.
The initial purchase price of $286m could rise to almost $350m depending on performance.