Hannah Skingle stopped to speak with James while both attending the Cannabis Europa Conference last week in London. Skingle is the Chief Operating Officer at Dragonfly Biosciences, a private seed-to-shelf CBD company, headquartered in London with distributions across Europe. The UK has seen recent changes to medical cannabis laws, bringing with it attention to cannabis based products and increased demands for CBD health and wellness goods. Dragonfly Biosciences is well poised in that market with their CBD products in major UK supermarkets; Boots, Tesco, Sainsbury’s and premium brands such as Harrod’s.
James West: Hannah Skingle joins me now. She’s the Chief Operating Officer of Dragonfly Biosciences. Hannah, welcome.
Hannah Skingle: Thank you very much.
James West: Hannah, we’re at the Cannabis Europa show in London, United Kingdom, and you have been very busy, I’ve noticed. And so I’m wondering, what does Dragonfly Biosciences do?
Hannah Skingle: Yes. So we are a seed-to-shelf CBD company, organically grown. We cultivate in Bulgaria, extract in Romania, formulate back in Bulgaria under EU GMP, and then we distribute all over Europe, but we’ve really predominantly been focusing the brand element in the UK as kind of our test run. Gone really successfully; we were the first CBD product to go into Boots. We also are in Tesco and Sainsbury’s, which cover 45 percent of the UK supermarket share; we’re in premium brands such as Harrod’s, but this is just kind of one side of our business.
The other part is the wholesale element, where we do white labelling and bulk sales to European clients.
James West: And this is just CBD products?
Hannah Skingle: Just CBD for now, yes.
James West: Okay. And are you a publicly traded entity?
Hannah Skingle: No. That’s –
James West: Down the road?
Hannah Skingle: Yeah, 2020, I would imagine.
James West: Oh, okay, great. So the CBD market seems like it’s already way ahead of even where Canada is in terms of the availability of it. I’ve been to all of these stores, they’ve all got large CBD displays with lots of different variety. What is the state of the market? I mean, it seems like there’s almost too much supply relative to demand.
Hannah Skingle: I think there’s a lack of understanding. There’s a lot of companies that have entered into the market that, you know, know about CBD. We’ve seen North America grow, we understand it from that kind of perspective, but actually your day to day kind of UK citizen might not know. I mean, we’ve definitely seen an increase over the last three years; I would say that one in ten people had even heard of CBD about three years ago; last year it was about one in five; this year I’m thinking around one in three. But it’s not that kind of full understanding, it’s just ‘Oh, I’ve heard of it, my friend told me about that’.
So I think that we’re poised to be in a great position for when people start understanding it more, but in order for that to happen, we need regulators to change the regulation, enable us to actually market our products better, and also just be able to educate, like, pharmacists, technicians, etcetera, so that people can actually understand it that way.
James West: It seems the CBD market is so far removed from the actual cannabis market in the UK and in Europe, because CBD has suddenly become mainstream, whereas THC is still very much taboo, especially in the context of the UK system, where there’s only a handful of clients who can get, or rather, patients who can get access to THC-based drugs. What’s the holdup? What’s the bottleneck, and how is it going to change?
Hannah Skingle: I think as a CBD company, we’ve had to detach ourselves away from the medical. You know, with medical, we know it’s going slowly, and that was actually a strategic decision from Dragonfly; we’ve done everything to EU GMP standards so that when the medical market actually does open up for CBD as well, we are poised to enter into that. But what we’ve had to do is actually create the food supplement element of CBD, and that’s what it’s categorized as in Europe, and then remove ourselves away from the medical side, because otherwise it actually places restrictions on us to sell the products.
I think over time, once certain companies and, you know, government and regulators have all kind of come together, and you know, there’s not just mass press releases about kind of the medical market doing X, Y and Z and very little patients getting any access, once that happens, then we can kind of move in.
I mean, how it’s going to get there, it’s going to take a long time. The politicians seem to want to observe the Canadian market before they act, which could be quite long-winded and slow.
James West: Yes.
Hannah Skingle: So I hope not, but that’s kind of the way it’s going at the minute.
James West: Right, interesting. So they’re wait and see on Canada. Canada is, you know, struggling with its own regulations; there’s new versions coming out all the time. So then, the decision to stay strictly with CBD, does it seem to you that there will be any changes in the access to CBD for people in the UK, and how will that be affected by, for example, if this Brexit thing happens? Will you be able to sell in Europe?
Hannah Skingle: Yes. We built our company on Brexit, firstly. You know, we started in 2017; we were well aware that was, it was going to happen, or could. And so all of our assets are actually outside of the UK; Bulgaria and Romania, or EU countries. It’s just simply our headquarters, here, so we are in a position to continue business.
In terms of CBD companies, very few CBD companies actually extract or formulate in the UK. So if there are any tariffs that come in place, it will be the same on everybody, and it will be a commercial entity’s decision whether they pass that cost on to the consumer or absorb it themselves, but everybody will be in kind of the same position for that.
James West: Is there any impetus towards recreational cannabis consumption in Europe or in the UK?
Hannah Skingle: I think there definitely is by certain members of society, absolutely. Do I think that we need to walk before we can run? Yes. I think that going with a kind of spearhead of talking about recreational and not really defining what recreational is – like, is recreational just a different vice that you can consume CBD in, or does it have to contain THC? – and establishing that before we kind of approach the recreational space, as I think it will definitely scare regulators.
James West: You bet. All right, so from your perspective at this point, is Europe an easier place moving forward more quickly and more sort of openly, than the UK? Or do you think they’re both sort of bogged down?
Hannah Skingle: I actually think the UK is one of the most fast-moving.
James West: Oh, okay.
Hannah Skingle: Which is quite a sad reality. In the UK, we have the most engagement from local authority and also, kind of EU member-state authority. And they actually want to hear about how we think we can reform CBD policy in the regulation, whereas I know in other EU member-states, that’s a lot more closed.
I think it’s challenging as well because CBD is currently regulated under food or under medicine, and therefore it kind of needs its own area. I think cannabis in general kind of needs its own regulatory committee in order to kind of have a blanket understanding and be able to move more freely.
I think each country has their own agenda, and there’s definitely politicians fighting both causes in every country, so we’ll see.
James West: Right, you bet. All right, Hannah, we’ll leave it there for now. Thanks very much for your participation.
Hannah Skingle: Thanks so much.
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