Guernsey-based The House of Green and German company Proto Global GmbH bridge the Brexit Gap to create a new and dynamic cannabis company in Europe at a time of increasing cannabis reform
Here is the headliner: A Guernsey-based company named The House of Green, has entered into a joint venture with Berlin-based Proto Global GmbH, the parent company of Schaeffer Nutraceuticals, including an alliance at the latter’s Poland-based existing GMP processing facility that will use The House of Green’s patented cannabis extraction equipment and processes.
The two companies are sharing industry experience, resources, and a manufacturing facility just across the German border, an hour’s drive from Berlin. The commercial working name of the new partnership is Mary Ventures.
It is certainly coming at an interesting time for the industry.
If there is one thing that is a constant in a summer when much about reform appears to be on a never-ending summer slumber, it is that cannabis companies who are in it for the long term are adjusting accordingly. The ability to pivot to adjust to new circumstances is the most important aspect of survival in a market which, everywhere, has seen its share of large bumps and disruptions post Pandemic. Further, to do so without losing money or creating write-downs like all the major public Canadian companies present in the European market so far, is a feat that is not an automatic reality, no large or small you are.
Beyond this, the consolidation of the German cannabis distribution market, which is proceeding apace this summer, marks a time mostly of retrenchment. Even the pending recreational cannabis reform bill, now widely expected in draft form some time this summer, promises little new developments or market entry possibilities. Highly limited home grow and social clubs are as far as the entire recreational discussion is going to go for now, at best, aus Deutschland, a place where CBD flower is now banned again, post December 2022.
However, this is, after all, the cannabis industry. A place where re-combinations and hybrids, if not amazing reinvention stories are the norm.
Both companies have succeeded in their respective niches, returning steady profits over the last highly choppy years. They are hoping for even better results with this new joint venture.
Bridging European Countries to Overcome Existing Market Conditions
Starting in 2018, The House of Green, based on Guernsey has battled market conditions that have everything to do with the still-emerging regulatory landscape on both sides of the Brexit divide if not the United States beyond that. Originally conceived as a hemp and later GMP certified processor on the British Channel Island of Guernsey, The House of Green decided to expand its operations from Guernsey to Europe after the Pandemic to focus on the emerging legalisation of adult-use cannabis in the EU. Germany, Malta, Netherlands, and the Czech Republic are all of interest. The idea is to grow their branded retail business products under Bailiwick Botanicals, into the expanding European market. There are currently three Bailiwick Botanicals stores in the Channel Islands, which generated £700,000 in revenue in 2022, and they are targeting revenue in excess of £1 million for 2023 by further expanding the offering in Guernsey and accelerating the growth potential of the more recent store in Jersey as well as outlets in Alderney and Sark.
The joint venture with Proto Global enables The House of Green to share a newly built, GMP certified facility at Kostrzyn in Poland, just over the border from Berlin, which is already manufacturing nutraceutical products for Schaeffer Nutraceuticals, a brand developed by Proto Global. Indeed, The House of Green will relocate its fully operational cannabis extraction laboratory from Guernsey to Poland in readiness for the extraction of cannabinoids for the manufacture of products in line with regulations in various EU countries. The site in Poland also has planning permission for a second building, which will more than double the capacity of the existing operation to 3,000 m2.
Working In Unique Partnership
This is far from the first British-German endeavour in the cannabis industry, but it is certainly one of the more interesting ones, and further that appears to be part of a trend in the industry to look to partnerships with eastern European countries.
Paul Smith, CEO of The House of Green, said “This joint venture is a great opportunity for us to press forward with our ultimate 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, in Guernsey and Jersey, 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.”
“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.
It also shows, in spades, that there is a viable cannabis industry, and further, profitable companies in it. Finding the right business model if not partners is the most important part of a successful recipe for business success.