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(Bloomberg) -- Switzerland is the birthplace of the modern pharmaceutical sector, which was spawned from the country’s dye and chemical makers. Drug-making giants Roche and Novartis call the Alpine nation home. Now a Swiss startup is blazing a fresh path by bringing a different kind of drug to market: legal hash and marijuana products.
KannaSwiss, a company founded in 2014, is already producing marijuana that meets Switzerland’s legal standard containing no more than 1% Tetrahydrocannabinol—known as THC, the psychoactive chemical that gets you high. Now it will also make hashish, or hash, for the Swiss market, with plans to expand to other countries loosening their drug laws.
Its products have fairly low levels of THC but contain cannabidiol, an extract from industrial hemp plants. Some say that the compound, referred to as CBD, calms the nervous system, acts as an anti-inflammatory and is sometimes used to treat ailments such as stress and epilepsy.
The company, based about 45 minutes west of Zurich in the town of Kolliken, sells its products in kiosks, specialty shops and convenience stores in Swiss cities from Geneva to Bern to Lugano. KannaSwiss hopes to go international with its legal products.
Photographs by Stefan Wermuth/Bloomberg
A lab technician handles a pressed legal hash brick stamped with the KannaSwiss logo. The company makes hash produced from the pollen of its low-potency plants. Boris Blatnik, the company’s chief strategy officer, says KannaSwiss’ hash has the same look, taste and feel as high-THC (and illegal) hash. Hash costs 50 Swiss francs ($50.40) per 5 grams, according to the company’s website.
Inside the greenhouse, clippings are taken from “mother” plants to make clones. The founders of the company had invested about 500,000 Swiss francs ($509,000) by the end of 2016 in production facilities. Although Switzerland started allowing production of marijuana with 1% or less THC marijuana in 2011, demand for legal pot products only really took off in 2017.
The number of legal marijuana producers in Switzerland has exploded from just 5 in January 2017 to more than 400 now, according to Swiss newspaper Tages Anzeiger. The Swiss Federal Customs Administration anticipated sales of 60 million Swiss francs ($61 million) for the industry in 2017. That compares to traditional illegal marijuana sales of about 800 million francs.
KannaSwiss has about 6,000 plants at its greenhouse. Each annual harvest produces about 1 ton of leaves and buds. The company also farms hemp plants from outdoor fields in Spain.
Workers, hired for the season, strip plants and separate cannabis flowers, or buds. The harvest takes place once a year in autumn for a few weeks. After eight or nine weeks of growth, the drying and curing process takes another two to three weeks.
Swiss companies produced about 50 tons of legal pot in 2017, Blatnik estimates, and the local market demand is only about 12 tons. “There is a huge surplus, and all these growers are panicking now,” Blatnik says.
A technician handles a vat of CBD oil by a vacuum rotary evaporator. KannaSwiss hired a chemist from a major pharmaceutical company to develop a method to extract CBD from industrial hemp plants. The company produces about 3 kg of CBD oil a day, as well as CBD marijuana, CBD liquid and CBD hash.
KannaSwiss is producing about 100,000 clones a month for the Swiss market, which they sell or use themselves, Blatnik says. Its CBD oil is sold all over the world. Governments in Austria and Italy have raised permissible THC levels, and KannaSwiss will also target those markets with its legal pot.
Cannabis clones grow in an indoor greenhouse after being cut from the mother plant. This is a fast way to make and sell new plants.
Hashish is produced by extracting pollen from the plants. The raw ingredients are pressed into bricks. Overall sales have increased 15-fold this year compared with last, Blatnik says.
Hash bricks are vacuum sealed. KannaSwiss says they do each part of the process themselves. “We control everything from seed to shelf,” Blatnik says. He declined to disclose revenue or profit figures.
Blatnik, seen here, says KannaSwiss will offer varying levels of CBD in its hash ranging from 10% to 60%, levels that are legal now in Switzerland and potentially elsewhere soon. There will be different flavors to choose from. The product is smoked like traditional hash, often in a joint mixed with tobacco.
KannaSwiss is working with partners to produce “nutraceutical” CBD products, a term for dietary supplements and medical products such as creams or ointments.
--With assistance from Tom Hall and Gem Atkinson
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