2019: Growth In Turbulent Times
2019 has been the most successful year for Hanway Associates so far, and while this year has seen the cannabis industry globally suffer growing pains, we have been helping our clients chart a course towards profitable and sustainable revenues. But before we jump into the business, here’s some of the years’ news about the people behind it.
Over the year we welcomed a number of new full-time staff to Hanway Associates. Joining as Senior Consultants, ex-Financial Times journo Robert Cookson and former pharmaceutical consultant Tom McDonald have brought a wealth of new skills to the team, alongside former Hanway interns (and new industry experts) Laurence Busch-Hansen and Lily Temperton as industry Analysts. To accommodate our rapidly-growing team, Hanway’s London HQ has moved to a new location in Clerkenwell - with ample space to continue to grow our team and new services (watch this space!).
2019 was also a great year for our team members' personal growth. In April our CEO George and his partner Trina welcomed to the world their daughter Otti, bringing another member to the Hanway family. Later in September our CSO Henry married his life partner Des.
At a Glance: Sector Update
When navigating a new sector, it can be turbulent sailing from one month to the next. 2019 saw some hard truths and tough lessons for a market many felt was losing its grip on reality. Here’s a few of the global moments that shaped 2019 and are set to influence the year ahead.
Positive
Continuing reform for medical cannabis in Europe
France, the third-largest economy in the European Union after Germany and the UK, approved a two-year pilot programme which will allow 3,000 patients to be prescribed medical cannabis.
Meanwhile, sales of medical cannabis in Germany continued to soar, with the latest available data showing that insurance reimbursements for medical cannabis reached €29.5m in the second quarter, up 20% over the previous quarter.
WHO report on rescheduling
In January 2019, the World Health Organisation recommended that the United Nations reschedule cannabis and its derivatives within the international drug control treaties. If adopted, the recommended changes would streamline international controls on cannabis and concede that it can provide a genuine medical benefit, and would make clear that CBD products containing less than 0.2% THC should not be considered a narcotic drug. The WHO’s recommendations are due to be voted on by the UN’s Commission on Narcotic Drugs (CND) in March 2020.
New Zealand Cannabis Referendum
The NZ government has released the first details about the referendum on adult-use cannabis taking place in November 2020. Kiwis will have the chance to vote on draft legislation that sets out exactly what legalisation would look like, providing clarity for voters and prospective industry alike. While some key details are still TBC, the proposed scheme would set an age limit of 20 and allow the sale of a range of cannabis and derivative products, while also authorising designated consumption spaces and limited home grow operations.
Middling
Novel Foods decision for CBD in Europe
In January 2019, the European Commission confirmed that CBD is a ‘novel food’, torpedoing sector investment from international cannabis companies and traditional CPG brands this past year. While Novel Food Regulations impose a short-term damper on the industry, the novel foods framework also provides a process through which CBD food products can be approved and legally sold across the EU. It is disappointing that the pending novel food application for CBD was not approved as anticipated this year; however, Hanway expects Europe to eventually see a wave of product approvals - and with this significant investment in cannabinoid products from North American cannabis brands and leading food and drink companies.
Luxembourg’s cannabis industry
While Luxembourg announced that they would legalise recreational cannabis at the end of 2018, in December 2019 they confirmed that it will take them at least another two years to implement the legislation.
Negative
Deflation of the ‘Pot.com’ bubble in North America
Slower-than-expected revenue growth among Canadian cannabis companies and concerns about their future profitability has led to a share price meltdown among cannabis stocks. The Horizons Marijuana Life Sciences Index ETF, the largest exchange-traded-fund tracking the sector, has lost more than 50% of its value since March this year.
Slow access for patients in the UK
Patients have struggled to gain access to medical cannabis in the UK in spite of medical cannabis legalisation introduced in November 2018. The UK’s National Institute for Health and Care Excellence (NICE), which provides guidance to the National Health Service, issued guidelines recommending against the prescription of cannabis-based medicinal products in many instances arguing that there is a lack of evidence for their safety and efficacy.
Our Portfolio: Company Update
Hanway Associates
Cutting-edge services and mainstream clients
Hanway Associates, our strategic consultancy, grew in size, services and expertise this year. Our team helped blue chip companies from a range of industries (including tobacco companies, Canadian licensed producers, beverages manufacturers and investment banks) with their European commercial strategies. Our work included providing commercial due diligence for mergers and acquisitions, supporting UK Home Office licence applications and producing market insights for Investment banks and companies planning to list on major exchanges.
As of December last year you can now purchase our strategic reports from our report store. Current offering includes the Hanway team’s EU Novel Food Regulations report with more launching in Q1 2020.
Cannabis Europa
Conferences in Paris, London, NYC & Toronto
In October we announced the sale of HAPP Holdings’ events portfolio - including the influential international conference series Cannabis Europa and European Cannabis Week - to long-term partners NOBL Group. The deal is testimony to Hanway’s ability to build, operate and sell companies in the cannabis ecosystem, having grown the platform from scratch to a thought-leading brand in only two years. We’re excited to hand over the reins to our friends at NOBL, with Alastair remaining Creative Director of the portfolio.
HAPP events had an exceptional year, kicking off with Cannabis Europa Paris at the illustrious Maison de la Chimie in February, followed in June by the inaugural European Cannabis Week. The highlight of ECW was undoubtedly Cannabis Europa London, a sold-out affair attracting over 1,200 attendees to the Southbank Centre for two days of talks, panels and networking. 2019 also saw the Cannabis Europa brand expand beyond the continent, with November events in Toronto and New York connecting Europe’s premier innovators, researchers and policymakers with North America’s movers and shakers.
The BBC’s Andrew Neil at Cannabis Europa at London’s Southbank Centre (June 2019)
First Wednesdays
Global expansion and new members features
First Wednesdays, our network for cannabis industry professionals, also continued to grow rapidly through 2019. Alongside expansion of our flagship London network - including our first half-day summit with McCarthy Tétrault and our inaugural annual global gathering during ECW - we’ve been delighted to launch FW events in Paris, Amsterdam and New York. This was all made possible thanks to the many sponsors, partners and expert speakers that supported our events and programming, and we look forward to announcing more exciting First Wednesdays developments in the new year. Our partners, Cannabis Capital Convention in Amsterdam had a great year and we are looking for more local partners of the same calibre to help us grow in 2020.
The team at First Wednesdays, led by Olivia Rutter, also introduced a global membership and launched our monthly members newsletter (sign up here).
Residents Agency
Communication and creative services for corporates and startups
Residents Agency continued to grow its team through 2019, bringing in Paul Brannon, an experienced crisis communications strategist and former Bell Pottinger PR man to lead our communications and corporate affairs work. 2019 saw an increase in companies needing support handling sensitive and potentially reputation damaging situations with press and regulators - so we see this service line expanding in the New Year.
2019 was an exciting year with our creative team at Residents led London's first PR campaign for a large-scale CBD pop up for Clever Leaves’ European CBD brand - Esenia. The communications team also orchestrated in-depth BBC interviews and first behind the scenes documentary photography at the distribution company responsible for first medical cannabis bulk import into the UK, helping record a historic milestone for UK patients.
The curation of Hanway’s owned and client events was led by Pierre-Yves Gallety, who remains on as the curator of Cannabis Europa since its sale. Pierre-Yves Galléty continues to access high level, mainstream speakers including Barclays, the Department of International Trade, Members of the European Parliament, NHS professionals, and advocacy groups including the European MS Platform to name but a few.
The wonderful photography seen across our brands is by the very talented Aline Aronsky who heads up Residents’ creatives services division.
In The Media
The industry’s visibility is increasing too. Cannabis consulting firm Hanway Associates runs First Wednesdays, a networking event in London and Paris for people in the industry. About 30 people signed up for information on the events when they began in mid-2018, and now more than 500 have, Hanway co-founder Alastair Moore said.
Hanway co-founder Alastair Moore quoted in Bloomberg (March 2019)
However, as with the bitcoin boom, the nascent industry has a dark side. Insiders have warned that investors should be wary of unscrupulous individuals darting in to make a quick buck. “There are a lot of interesting companies being built, but some people are in this only to get rich in the short term,” said George McBride, co-founder of cannabis consultancy Hanway Associates.”
Hanway co-founder George McBride quoted in The Times (February 2019)
It’s 8pm on a crisp London weeknight and the bar, a smart little place nestled in a basement off Oxford Street, is packed. A suited-and-booted crowd are sipping on craft beers and chatting up potential business partners. Cards are being exchanged and the air is thick with talk of “market verticals” and “investment inflows”. The evening is brimming with a slightly breathless, nothing-can-stop-us zeal – a brand of enthusiasm I recognise from the years I spent in California covering Silicon Valley for this magazine.
First Wednesdays covered in The Times (December 2018)