Trailblazing Medical Cannabis with Cantourage’s Philip Schetter | Startuprad.io E 415
Executive Summary
In this episode of Startuprad.io host Jörn “Joe” Menninger speaks with guest Philip Schetter, CEO of Cantourage, about the company’s role in the expanding medical cannabis industry in Europe. Schetter discusses Cantourage’s growth, manufacturing processes, digital platform for wholesalers, and market reach. The company, recently public on the Frankfurt Stock Exchange, is hiring talents and is focused on the medical market, with a cautious stance on recreational legalization. Cantourage sources globally and distributes across Europe, navigating complex regulations and investor interests, while Germany’s market potential looms large. Interested listeners are directed to Cantourage’s LinkedIn and career site in the show notes.
Disclaimer — Since Cantourage is Listed
The interview conducted by Startuprad.io with Cantourage is not a paid promotion nor a recommendation to purchase their listed shares. Financial decisions should be made with caution and after thorough consideration, including conducting personal research and consulting with an investment professional. The information provided in the interview is for informational purposes only and does not constitute financial advice.
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Phased Approach to Cannabis Legalization: “It’s a phased approach, step by step, to warm up to the idea to to fully legalize cannabis.”
— Philip Schetter — Cantourage
Introduction
Welcome back to another episode of Startuprad.io — the engaging podcast where we bring light to the brightest innovations and startups. I’m your host Jörn “Joe” Menninger, and in today’s episode titled “Cantourage,” we are diving into the green wave of the medical cannabis industry in Europe.
We’re joined by a very special guest, Philip Schetter, CEO of Cantourage, who will share insights into how this burgeoning company is revolutionizing the cannabis market. Cantourage, now a proud member of the Frankfurt Stock Exchange family, is on the lookout for fresh talent across Berlin, Bavaria, and Europe to support its growth.
Listeners eager for opportunities in this field should keep an eye on our show notes for links to Cantourage’s LinkedIn profile and career website.
In our conversation, Philip will uncover the important shift in Germany’s medical cannabis regulation — no longer seen as a narcotic, but now recognized as prescription medicine — and discuss the nuances of a cautious approach towards the potential legalization of recreational use. We’ll explore the sophisticated mechanisms Cantourage employs to produce high-quality medicines right from their hub in Bavaria, using innovative methods to ensure purity and efficacy, shunning the traditional irradiation techniques.
Ever wondered how pharmacies might navigate the complex world of medical cannabis ordering? Cantourage has the answer with their cutting-edge, fully digitized platform, designed to streamline the wholesale process.
With a commanding presence across multiple product formats, Cantourage claims a substantial share of the medical cannabis market. Philip’s path to CEO of Cantourage is as intriguing as the industry itself, involving a history of cultivating success at another business giant, Aurora Deutschland GmbH.
Listeners with an ear for financial strategy will find Philip’s insights into going public particularly riveting. We’ll delve into how this move not only adds a layer of complexity but also elevates the company’s professional and transparent stance — factors that are increasingly attracting the sharp eyes of institutional investors.
Despite the buzz and speculation around recreational cannabis, Cantourage stands firm in its focus on the medical market, citing significant prospects for growth. With a deep understanding of the European landscape, where vertical integration is common, Cantourage stays ahead by excelling in manufacturing and distribution, boasting collaborations with cultivators from around the globe.
Yet, in an era where sustainability and ethical practices are paramount, Philip will discuss how Cantourage navigates the delicate balance between growth and meeting ESG criteria, all while eyeing the vast potential of Germany’s medical cannabis market.
Lean in as we embark on this enlightening session, revealing the intricate workings of Cantourage and the ever-evolving cannabis industry in Europe, right here on Startuprad.io.
Cannabis Industry Growth: “Today, there’s there’s a legacy. There is lots of experiences, lots of know how. So as of today, I think the the the the best cannabis in terms of of of quality, that is available in in Europe is basically imported from Canada.”
— Philip Schetter — Cantourage
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Climate Considerations in Cannabis Cultivation: “you could say, okay, from from a from a climate perspective, that there’s there’s better regions to actually grow cannabis around the equator, that you could basically grow cannabis outdoors or in greenhouses where it’s energy efficient and labor costs are relatively low, especially compared to to the European Union.”
— Philip Schetter — Cantourage
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Global Cannabis Supply Chain: “So the the wholesalers we just talked about, they can they have access to a few, cultivation manufacturing sites around the world, but that’s about it. So mainly they they are reliant on 2, 3 different suppliers, and we built a special, operating model where we source cannabis as a raw material from around the world. We have more than 65 cultivators out of 18 countries under contract.”
— Philip Schetter — Cantourage
Questions Discussed in the Interview
- Given Cantourage’s expansion and search for talent, what qualities and experience are you looking for in potential candidates to join your team, especially within Berlin, Bavaria, and across Europe?
- How does Cantourage’s cautious approach to the legalization of recreational cannabis affect its business strategy, and what do you think are the potential risks and benefits of full legalization?
- With Germany’s recent change in classification for medical cannabis, how do you envision this regulatory shift impacting Cantourage’s operations and the wider medical cannabis industry in the short term?
- Can you discuss the innovative methods Cantourage is using to reduce the microbiological load in cannabis products, and how does this compare to traditional irradiation methods in terms of product quality?
- As Cantourage aims to digitize the ordering process for medical cannabis products, what challenges have you encountered in creating a seamless, fully digital experience for pharmacies?
- With Cantourage claiming around 80% of the medical cannabis market across various product formats, what strategies have you implemented to maintain and grow this dominant market share?
- As a leader in the European cannabis industry, how has going public in November 2022 changed the dynamics of Cantourage’s business operations, and what has been the response from the investment community?
- With medical cannabis being the only legal market in Germany and Europe, what is Cantourage’s viewpoint on potential growth areas, and how do you plan to navigate the regulatory landscape should recreational use become legal?
- Can you elaborate on Cantourage’s partnership model with cultivators and the revenue-sharing arrangement? How does this contribute to ensuring a consistent supply of high-quality cannabis?
- Considering ESG criteria and the stigma that may still be associated with cannabis, particularly in the context of recreational use, what strategies is Cantourage implementing to address these investor concerns and promote its focus on the medical market?
Cannabis Industry Model: “On the one hand, there are the vertically integrated players. Joe doing basically from from from seed to sale, doing cultivation, distribution, sales, marketing all under one roof, mainly done by Canadian companies like my former company, Aurora, on the other hand, there are, we call them wholesalers or distributors, which are focusing on buying cannabis from somewhere in the world, and then basically just wholesale it to to to pharmacies, other wholesalers in Europe.”
— Philip Schetter — Cantourage
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Cannabis Market in Europe: “So, as of now, there is only medical cannabis in Germany, and also all over Europe. There is no recreational market as of now, as we as some of us may aware, there is lots of talks about, recreational cannabis use, obviously, in Germany, but also in the Czech Republic, in Malta, wherever. But as of today, it’s it’s rather a medical market.”
— Philip Schetter — Cantourage
The Audio Podcast is set to go live on Thursday, February 22nd, 2024
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The Guest
Welcome back to Startuprad.io, the pulse of the startup scene. Today we have the privilege of welcoming an esteemed figure in the burgeoning field of medical cannabis, Philip Schetter (https://www.linkedin.com/in/philip-schetter-1506b614b/), CEO of Cantourage, to our latest episode. Philip’s journey in the cannabis industry is marked by notable achievements and keen insights into the market’s evolution. Before leading the helm at Cantourage, Philip significantly shaped the cannabis landscape through his role as the managing director of Aurora Deutschland GmbH, where he was instrumental in the foundational stages of the company’s development. With a rich history of expertise and leadership within the realm of medical cannabis, Philip brings a wealth of experience to our discussion today, centered around both the opportunities and the intricacies within this expanding industry.
The episode sheds light on Philip’s current endeavors with Cantourage, a company that has rapidly made a name for itself since its inception in 2019 and went public in November 2022, offering fertile ground for early investment. Notably, Cantourage distinguishes itself in the space by embracing a unique approach to the medical cannabis market, focusing on manufacturing and distribution across Europe. Sourcing from over 65 cultivators in 18 countries and delivering to 7 European markets, Cantourage has established a firm presence in this sector. As the company scales and searches for top-tier talent to join its ranks, especially within Berlin, Bavaria, and wider Europe, Philip’s vision for Cantourage’s future is one of meticulous expansion and adherence to stringent regulations, all while navigating the complexities introduced by a public listing and the scrutinies it entails.
Listeners, prepare for an in-depth exploration of the fast-paced medical cannabis industry through the perspective of a seasoned leader. Don’t miss any of the insights — head to the show notes for links to Cantourage’s LinkedIn profile and career page, and join us on this enlightening journey into the heart of Europe’s medical cannabis conversation.
The Startup
Cantourage (https://www.cantourage.com/) is a forward-thinking company at the forefront of the burgeoning medical cannabis industry in Europe, particularly marked by its strategic position within the German market. Founded in 2019 and helmed by CEO Philip Schetter, who brought his wealth of experience from serving as the managing director of Aurora Deutschland GmbH, Cantourage represents a compelling opportunity in the healthcare sector. A significant milestone in its journey was marked by its decision to go public in November 2022, not only to open the doors for early investment opportunities but also to maintain founders’ control while augmenting company transparency and professionalism. Through its public listing on the Frankfurt Stock Exchange, investors have been given a unique chance to finance and contribute to an industry with tremendous growth potential while Cantourage has gained resources for further expansion and innovation.
What distinctly sets Cantourage apart from competitors is its comprehensive approach to the medical cannabis supply chain, from importing raw materials to manufacturing finished products in its Bavarian hub. Upholding the highest regulation standards, Cantourage’s novel method for reducing microbiological load stands out as more product-friendly compared to conventional irradiation, ensuring higher-quality medicinal products for end-users. Adding to that, Cantourage’s pivot towards technology with a digitized platform positions it as a leader in streamlining the ordering process for wholesalers and pharmacies. With its roots deeply entrenched across the European market, sourcing from a network of 65 cultivators from 18 countries and distributing to 7 European markets, Cantourage not only claims approximately 80% of the market share in various product formats for medical cannabis but does so with a model that shares revenues with its independent cultivation partners, emphasizing their collaborative and growth-driven business philosophy.
Cantourage is listed on the Frankfurt Stock Exchange
This interview is not a recommendation to buy the shares of cantourage. This interview is also no investment advise. Talk to your financial advisor and do your homework before investing.
Hiring!
Cantourage is hiring. You can learn more on their company’s career website.
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The Interviewer
This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:
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Automated Transcript
Jörn “Joe” Menninger [00:00:00]:
Hello, and welcome, everybody. This is Joe from celebrate. Io, your startup podcast, YouTube blog, and Internet radio station from Germany. Today, I do have a cannabis entrepreneur here with me. Hey, Filip. How you doing?
Philip Schetter — Cantourage [00:00:16]:
Hi, Joe. Nice to meet you, and thanks for having me.
Jörn “Joe” Menninger [00:00:20]:
If either he or I sound a little bit tired, it’s because the Super Bowl went into overtime. We didn’t get enough sleep last night. We already cleared this out. Nonetheless, Filip, welcome very much. You are the CEO and cofounder of Contourage?
Philip Schetter — Cantourage [00:00:42]:
Yeah. I’m I’m the CEO of Contourage. But I’m I’m not one of the founders. Actually, it was founded by two close friends of mine, and I joined the party in January 2021. And the company was originally founded in 2019, but, yeah, I joined a bit later. And here we are. Here we are.
Jörn “Joe” Menninger [00:01:06]:
Talking about you, I’ve seen you did some pretty interesting stuff in your life, including a stay at University of Sydney. How did you like your time back there?
Philip Schetter — Cantourage [00:01:19]:
Yeah. Those are back in the heydays. It was, lots of fun. Yeah. It’s a beautiful city. It was lots of fun being there. Unfortunately, I just spent a semester there, and then I had to go back to Germany, but, it was fun times. That’s for sure.
Philip Schetter — Cantourage [00:01:35]:
Mhmm.
Jörn “Joe” Menninger [00:01:35]:
I’ve seen you then became a consultant for more than 8 years, and then the the the there is a break in your, CV CV that I really find interesting because from associate principal in a consulting company, you jumped ship and became the manager director of Aurora Deutschland GmbH, which is also in cannabis business. And then you went on to manage. But can you tell me how did you go from consulting to cannabis?
Philip Schetter — Cantourage [00:02:12]:
Sure. So I did consulting for for quite some time. Was may maybe an attract to, at some point, become a partner. But I wasn’t having too much fun in the end, to being quite quite honest there. So the the the the consulting company I worked for was founded by a couple of McKinsey partners, and those those guys actually also become mentors of mine. And, when I talked to them quite openly that I like to do something else, They basically said, I I should I should reach out to people in the Startupradio industry in Berlin because, they saw potential in me in order to to build a company. And lucky me, they reached out to, a former colleague of theirs, Florent Holzapfel, who was one of the founders of Pedanias, which later become Aurora, which was the 1st cannabis wholesale in Europe. And, initially, it was just to meet him, to better understand the startup scene.
Philip Schetter — Cantourage [00:03:13]:
And then we had a chat for a few hours, and then basically offered me a job at his company. And lucky me, yeah, I soon became then also the managing director or the CEO of Aurora, Also, Aurora Europe, which was quite the ride. It was in in the early stages of the cannabis industry in Europe. Aurora, which was at that point in time, one of the largest, if not the largest cannabis company in the world, and I was, tasked to build the European platform. It was quite the ride. It was quite challenging, but also a huge success, at least from our perspective, to build the company from 30 employees to more than 250 in a few years. Together with the team, we also won the tender to cultivate cannabis in Germany. So lots and lots of experiences, which also now helps me in order to further build another cannabis company, Contourage, which is now also one of the, if not, the market leader in Europe for cannabis.
Jörn “Joe” Menninger [00:04:18]:
Let’s talk about Contourage here, the company you are heading as CEO because there are many things different here, And I would like to talk about that because, first, you are not the necessarily privately held VC funded Startupradio usually have here. Can you talk a little bit about that? And what decision made you do it differently?
Philip Schetter — Cantourage [00:04:49]:
Yes. We went public in November 2022. At the end of the day, we thought, there is there not there are not a lot of opportunities for private investors, to invest into a hot topic like cannabis. There’s just a few listed companies in Europe, and we thought we’d like to give investors the opportunity to invest into cannabis rather early and also to invest into a growing company like Kantaraj rather early. Also, I just mentioned that the the, the founders of, they have sold their their first business to Aurora. They saw what happens if you’re acquired by a larger company. This time around, we we’d love to do it differently, being at the the driver wheel for the foreseeable future. So even though we went public, the founders, the management team, we still own over 75, 80% of the company.
Philip Schetter — Cantourage [00:05:51]:
So we like to be public in order to have, let’s say, ample opportunities to grow in the future to raise capital, while remaining in in the driver’s seat, not being under the gun of, outside or external investors.
Jörn “Joe” Menninger [00:06:06]:
I understand that this also gives you access to those capital markets, debt, and equity, which should be a big bonus. But on the other hand, you also have to very regularly publish all your numbers, which is usually something the Startupradio don’t like to do. How how does does this feel for you right now?
Philip Schetter — Cantourage [00:06:30]:
I mean, it’s it’s it’s an additional layer. It’s an additional layer of complexity, so far. So so far so far so good, I’d say. And it also helps to professionalize your company at the end of the day. So we, we publish our numbers, our figures on a regular basis. We streamline our processes in order to get there. So at the end of the day, it also makes you further develop the company to further mature. And yeah.
Philip Schetter — Cantourage [00:06:59]:
I mean and also, especially looking at our numbers, I feel quite, quite good in order to publish these. Because compared to our peers, I think we’re doing not too bad. So we feel, I mean, it’s good to have that transparency and and to show in the world what we are what we are about. And and, like, given that we’ve been successful so far, I have no trouble talking openly about what we do. There’s no need to keep it secret or private. We’re out there in the open and talk openly about what we do, where we’re successful, and where we’re not successful. So, so far so good, I’d say. Yeah.
Jörn “Joe” Menninger [00:07:37]:
I would be interested when you talked about that. There are a lot of capital market events around Germany, around the world. When you are there, are you in the ugly kid’s corner, or are you really approached by investors who are interested how the cannabis business is developing? What what’s the feel like there on the event?
Philip Schetter — Cantourage [00:08:01]:
But it depends. It is also evolving over time. I think Joe the 1st time around, we went to the forum in Frankfurt. November or November, it it’s December 2022. And we were the, I mean, the odd kids, maybe the ugly kids in the corner because nobody has heard heard about us, and cannabis was something rather new. And the the the discussions were mainly around what is cannabis, what is matter with cannabis, what’s the regulation like. So we didn’t really talk about. It was more about educating, potential investors about cannabis in general.
Philip Schetter — Cantourage [00:08:41]:
But I think the last couple of couple of years that has somewhat changed and evolved. You could can sense that, investors also did their homework. And they’re asking more precise questions about cannabis or specifically about Contouraj, our our past performance and then future potential. You can see that, some investors, not all of them, are really interested in cannabis. And also, let’s say, do in-depth analysis of of the market, the competitive landscape, and asking, good questions these days. It’s not broad about cannabis, so it’s it’s it’s more fun for me. And we could see that, more people are interested in investing in in cannabis also from an institutional perspective.
Jörn “Joe” Menninger [00:09:29]:
Talking about education here. We we’ve really grown massively since we had the likes of Finn Henslow with, Sanity Group or, Kansertiva here, with the Snoop Dogg investment. Could could you lay a little bit the groundwork how this is currently working in Germany? At least the leisure can have this business. I’m sure that’s the only one you could talk about here. And then we try to put you in where you fit in in terms of the value chain there.
Philip Schetter — Cantourage [00:10:06]:
So, as of now, there is only medical cannabis in in Germany, and also all over Europe. There is no recreational market as of now, as we as some of us may aware, there is lots of talks about, recreational cannabis use, obviously, in Germany, but also in the Czech Republic, in Malta, wherever. But as of today, it’s it’s rather a medical market. Those markets have been in existence for quite some time. They’re here, and they’re they’re they’re growing. By the way, that’s why we are a 100% focused on Joe medical markets as of today, because there’s ample, ample room, to grow and ample room, to make profits there. No need to think too much into the future about any recreational market because in the here and now, there’s there’s, that there is a market where you can gain market share and make make make profits there. In terms of the the lay of the land, I’m currently looking at 3 archetypes in terms of companies being active in in in Europe.
Philip Schetter — Cantourage [00:11:11]:
On the one hand, there are the vertical vertically integrated players. Joe doing basically from from from seed to sale, doing cultivation, distribution, sales, marketing all under one roof, mainly done by Canadian companies like my former company, Aurora, on the other hand, there are, we call them wholesalers or distributors, which are focusing on buying cannabis from somewhere in the world, and then basically just wholesale it to to to pharmacies, other wholesalers in Europe. The is, somewhere in the middle. So we’ve initially be focused on manufacturing, because that’s the most challenging part from a regulatory perspective. So it’s Joe there’s lots and lots of different cultivation assets around the world, but they cannot supply any medical market because they’re lacking needed permits and licenses in order to turn an agricultural good into a medicine. So therefore, you need to have certain permits and licenses to do the manufacture pharmaceutical manufacturing. That’s what we focused on initially. It took took quite some time to get there.
Philip Schetter — Cantourage [00:12:31]:
And now we have a special operating model where we focus on manufacturing and distribution, but we can source cannabis from around the world. So the the wholesalers we just talked about, they can they have access to a few, cultivation manufacturing sites around the world, but that’s about it. So mainly they they are reliant on 2, 3 different suppliers, and we built a special, operating model where we source cannabis as a raw material from around the world. We have more than 65 cultivators out of 18 countries under contract. It basically did send us, cannabis as a raw material, and then we do the manufacturing here in Germany and then, distribute it all over Europe. As of today, we’re selling it to 7 different European countries.
Jörn “Joe” Menninger [00:13:23]:
Joe, basically, you are also very early stage. In terms of growing, you don’t do the growing by yourself, by. You have you have contractors to do that?
Philip Schetter — Cantourage [00:13:34]:
I wouldn’t I wouldn’t call them contractors. We call them partners, right, because at the end of the day, they’re independent, companies. And we have a special model in place, where we share the achieved revenues here in Europe. Mhmm. Because at the end of the day, we believe in partnerships and Joe everybody needs to eat along the value chain. So we split the revenues we achieve here in Europe with our cultivation partners. I I mentioned before, as I I wait for Aurora, which is one of the vertically integrated players, they invested heavily into that infrastructure. So it’s a rather asset heavy, operating model.
Philip Schetter — Cantourage [00:14:16]:
And by choice, we said, okay, we need to be nimble. We need to be agile. We need to be flexible. And there’s lots and lots of good cultivation, partners around the world. No need to invest into that infrastructure. Let’s rather be asset light, focus on manufacturing and distribution, and not invest heavily into cultivation assets, because we can solve solve that that that problem in terms of product supply by partnering with excellent growers around
Jörn “Joe” Menninger [00:14:44]:
the world. And the the the the I did have a lot of questions here that I wrote down. Let let me try to do first a little bit more the random ones and then then the ones that would drive the story further. You were talking about Canada. My understanding is that there are Canadian companies because they’ve been very early in the regulatory game, because it, at the point you were talking about, it kind of hit me that Canada is not necessarily the prey the place to crow cannabis. So there had to be a different driver. Yeah.
Philip Schetter — Cantourage [00:15:27]:
I mean, yeah. On the one hand, you could say, okay, from from a from a climate perspective, that there’s there’s better regions to actually grow cannabis around the equator, that you could basically grow cannabis outdoors or in greenhouses where it’s energy efficient and labor costs are relatively low, especially compared to to the European Union. But Canada, Canada was at the forefront in terms of the regulatory game as you just mentioned. So cannabis was fully legalized also for recreational use in 2019. And that led to the fact that, there was a massive market, and, those companies were already public. They could raise lots and lots of of of of dollars in order to build an infrastructure. Yeah. And initially, in in the early days of the of the cannabis industry, people build cultivation assets where they could, not where necessarily made the most sense.
Philip Schetter — Cantourage [00:16:29]:
And you were allowed, basically, to build cultivation assets in in Canada. That’s what they did. Now you can see that from a cost perspective from time to time might might make makes more sense to build it somewhere else. But now the infrastructure there is is there and needs to be, yeah, needs to be used to a certain to a certain degree. But I should also remember, before I forget, I should also mention, there there are lots of excellent growers in Canada at the end of the day. Today, there’s there’s a legacy. There is lots of experiences, lots of know how. So as of today, I think the the the the best cannabis in terms of of of quality, that is available in in Europe is basically imported from Canada.
Philip Schetter — Cantourage [00:17:16]:
So they are leading the pack. That’s for sure.
Jörn “Joe” Menninger [00:17:20]:
Another curveball question is when you were talking about all those capital markets events and so on on and so forth, what went through my mind was, do you have a lot of guys from the ESG community that invest in you? Or does your business model violate the rules?
Philip Schetter — Cantourage [00:17:40]:
It depends. Just recently, we had a lengthy discussions with a potential investor that was really adamant about, ESG and future ESG rules, where, as of today, cannabis from time to time is is an issue, especially if, we talk about recreational cannabis. So, it depends in terms of the investment criteria. There is certain institutional investors who don’t have any issue at all with cannabis. There are a few which are do have issues, and there are others which, do like Contaraj because we’re focusing on medical cannabis, only as of today.
Jörn “Joe” Menninger [00:18:22]:
Also, I would like to hint that, especially during the interview of Concertiva, we’ve talked about the the dream of legalizing, as you already mentioned, cannabis here in Germany for recreation and use. I think they they dreamed of a really, really big thing. And then a very, very small proposal came along, which apparently, shattered the dreams of some of the people there. That that that’s what we’d like to keep it. I think you you would have a lot to say about that.
Philip Schetter — Cantourage [00:18:56]:
Yeah. I think, Joe initially, there was I mean, at the end of it, let’s talk about the the the market potential first. So Germany is by far the biggest medical market in in Europe. So totally roughly 20 tons per year, could be being sold in Germany in terms of medical cannabis. And a conservative estimate of the the black market is roughly 400 tons. So that is a multiplier by 20 in terms of of, a potential market. So that’s a huge, huge boost, huge upside for lots of cannabis companies. That’s why everybody was looking at a potential recreational market in Germany.
Philip Schetter — Cantourage [00:19:34]:
There’s lots and lots of potential. But at the end of the day, so as as of we at Kantarash, we’re active in the medical game. We’re active in a lots different European countries. So we didn’t build the company based on on a pipe dream that the recreational market might happen soon or soon ish. We always looked at the development, also talked to, let’s say, a few people involved, in in drafting that that that bill. But, we were never fully convinced that there will be a full legalization, within the next 1 or 2 years. So usually, regulators take their time. Usually, there is a pilot program.
Philip Schetter — Cantourage [00:20:18]:
They evaluate the data before they really open, the the the the legalization of the floodgates. So I think it’s it’s it’s a good sign. It’s it’s a phased approach, step by step, to warm up to the idea to to fully legalize cannabis. And we’ll see how that goes in terms of recreational cannabis, but we should also mention in that in that, proposal. People mostly talk about recreational cannabis, but there’s also a major change for medical cannabis in Germany, because it will no longer be treated as a narcotic. It’s just an Rx for prescription medicine. That should actually help further further grow medical cannabis in in in Germany, because it it’ll help, or it will ease the burden on on on on on doctors and pharmacists to prescribe and dispense cannabis. So we rather see, rather a short term boost for the for the medical, cannabis here in Germany.
Philip Schetter — Cantourage [00:21:24]:
And in terms of recreational, given it’s it’s homegrown, given it’s mostly for so called cannabis clubs, you can’t be active in those, as a as a cannabis company. There is no, this, yeah, limited potential, let’s say, for for cannabis companies in the recreational game. However, we’d rather see a boost in the medical game given the reclassification of cannabis as a non narcotic.
Jörn “Joe” Menninger [00:21:50]:
Yes. I do believe, first, what is really important here is that, there is not instant legalization and then the the lawmakers realize, oh, we made a big problem at full speed backwards. That will be a big issue because then it would make it impossible on political terms for years years to come to legalize this. So a more cautious approach is the better one here.
Philip Schetter — Cantourage [00:22:19]:
And and at the end of the day, to me, it’s, it’s also a German approach to do it like that. Step by step, it’s a bit bit of a wait and see approach, evaluate the data, and then further further further improve the regulatory framework in order to, let’s say, build build a sustainable and and and long term structure, for for for companies, to engage in in cannabis. So I wasn’t I wasn’t too surprised that it’s a step by step approach.
Jörn “Joe” Menninger [00:22:49]:
Yeah. And, the the thing that it’s not regulated as narcotic would mean a lot because there’s a very strict law here in Germany, and you have to follow a lot of regulations and if you don’t they have very harsh punishments involved and that was would reclassification out of this class would not necessarily make it easy, make it simple, but it would be make it less regulated. And
Philip Schetter — Cantourage [00:23:19]:
if you make mistakes,
Jörn “Joe” Menninger [00:23:19]:
it’s not as harsh as a punishment as it is in other classes. But let let me get from the curveball question back to my original idea of the interview. You guys do manufacturing. So what I had in mind is, like, you get delivered, like, big big amounts of, in in containers and climatized containers, with 1 or 2 security guys. And then it drives into a physical factory and there something happens. Is it like that? And do you do it in Germany? And how does all of this stuff work? Because that’s the important part many people out there will never in their whole life have a chance to know how this is working. And if they really a little bit geeky and want to know how stuff works, that’s their chance. So go ahead.
Philip Schetter — Cantourage [00:24:13]:
I mean, it’s pretty pretty accurate what what you just described. So we basically import, the plant or we call it biomass or or raw material, in into Germany. Actually, into Frankfurt, and then it gets sent to our manufacturing hub, which is in Bavaria. And then, basically, turn that agricultural good into a medicine. And that means, drying, trimming, needs also reducing the micro microbiological load. It’s, packaging. It’s labeling. It’s testing.
Philip Schetter — Cantourage [00:24:45]:
So there’s lots and lots of different steps from a pharmaceutical perspective in order to have, a safe product at the end of the day. So it’s it’s a lot of work. So it’s it’s it’s not that simple. Many pharmaceutical manufacturing, but we do that all all in Germany, and then also send it from from from our hub here in Germany and all over Europe, different different products.
Jörn “Joe” Menninger [00:25:11]:
I see. I see. And and that that’s also the part that makes you really different. You are importing, you are making it ready as a medical product. As you said, microbiological loads, you don’t want to have a lot of viruses or bacteria on it. I think you cannot completely cleanse it because it it’s a natural product, but you’ll have to you really use this load by a considerable mound, I’m sure.
Philip Schetter — Cantourage [00:25:43]:
Yeah. So there is, so in terms of, at the end of the day, it’s a medicine. So there’s a tight regulation also in terms of different levels of, contamination. And, so we need to comply to those rules and want to comply to those rules. And so we came up with a rather unique and innovative method to reduce the microbiological load. Most of our peers use irradiation, so either gamma irradiation or e beaming. And we came up with a new, yeah, innovative method, which is a bit more gentle to the product, which is we call it smooth. Because at the end of the day, it’s a natural product with natural ingredients.
Philip Schetter — Cantourage [00:26:30]:
And to me, it sounds counterintuitive to use radioactive sources in order to treat the product. We have a new method, which reduces the microbiological load, as needed, and is rather gentle to the product Joe we can preserve, active ingredients, in in the product. And so far, feedback from patients and and and doctors is is pretty good in terms of our product.
Jörn “Joe” Menninger [00:26:57]:
And then you also have a platform on which the wholesalers and maybe even the pharmacies can directly order?
Philip Schetter — Cantourage [00:27:08]:
Yep. That’s correct. So, we we we call it a a platform, basically, which is connecting our product portfolio to, other wholesalers and or pharmacies. Joe if they want you, they can directly order product, via our platform, or what they call us up here. So, honestly speaking, most of the pharmacies in Germany are not yet fully immersed in in the digital digital space. So we there’s lots of communication via via email, also via phone. But we try to to to also offer a fully digitized experience for pharmacies. So if they choose to, they can, also use our platform to to order products.
Jörn “Joe” Menninger [00:27:56]:
And I’ve seen in one of your presentation, you claim around 80% of the market for medical cannabis. Does this mean you import something like 80% of the product there?
Philip Schetter — Cantourage [00:28:13]:
It’s it’s not a 100% accurate. In terms of different product formats, there are, let’s say, for for for monographs, how you can dispense cannabis as a compound medicine. So there is a dried flower. There is a tonabinol. There is, extracts or oils and, pharmaceutical CBD. And the the last component is is as finished products. And we are currently, engaged in 4 product formats, so we are dispensing flour, trona benol, extracts, and CBD. Most of our competitors are only active in 1 or 2 product formats, and, yeah, we’re active in in 4 different product formats or 4 monographs.
Philip Schetter — Cantourage [00:29:03]:
That’s roughly 80% of the market. So our total addressable market is 80%, because we’re not active in in finished products.
Jörn “Joe” Menninger [00:29:13]:
I see. I see. This is where we’re going. Usually, I close the interview with 2 questions, but, apparently, everybody who’d like to invest in your company can do so via the Frankfurt Stock Exchange. You’re traded there daily. Joe, all the investors can go there. But usually, I have the last question. Are you looking for talent? And what we usually do is the people already listen to the interview.
Jörn “Joe” Menninger [00:29:44]:
They know you guys by now. And, what what they then do is, looking at the careers website. So I would suggest we link the careers website because every company is currently, is really looking for talent. Right?
Philip Schetter — Cantourage [00:29:59]:
That’s for sure. Always always on the lookout for, the best talent available out there. And so we are located in Berlin and Bavaria, but also looking for for for talents, basically, all around Europe. We have, so most of our operations is in Germany, but we also have a subsidiary in in in the UK based in London, where we also if not the leader, one of the leaders in terms of medical cannabis. So feel free to to check out our careers website. Also check out opportunities all around Europe. So Kantaraj is growing these days. We’re also hiring new new new talents.
Philip Schetter — Cantourage [00:30:39]:
Mhmm.
Jörn “Joe” Menninger [00:30:40]:
And everybody who would like to learn more, they can go down here in the show notes. There will be a link to your LinkedIn profile. Of course, there will be a link to your company website and your career website where people can have a look around. Filip it was a pleasure talking to you. I learned a lot personally today, Joe only about the role of Canada in Crohn’s cannabis. And, I really enjoyed the interview, and I hope to have you back in some time.
Philip Schetter — Cantourage [00:31:12]:
Good. Thanks for having me. It was lots of fun.
Jörn “Joe” Menninger [00:31:15]:
Thank you. My pleasure. Have a good day. Bye bye.
Philip Schetter — Cantourage [00:31:18]:
Thank you. Bye bye.
