Interview with Mr Georgios Zafeiris, Managing Director, Golden Greece Holdings

BF: I would like to start off by asking you: Greece’s agricultural sector, which you are obviously a part of, has transformed during the crisis?

Mr Georgios Zafeiris (GZ): Before I answer, I would like to welcome you here in Greece on behalf of our company. And coming back to your question: for almost ten years, Greece has been going through an economic crisis which resulted in its GDP shrinking by 25%, while household spending has gone down by 40%. So when we started out in Greece a few years ago, good news was hard to come by. For instance, for years Greek farmers hadn't branded or bottled their olive oil. Instead, they'd sell it to Italy and Spain in bulk. There, it was bottled and sold as Italian or Spanish olive oil around the world.

Banks had mostly stopped lending money, even to healthy businesses, while the government sold the formerly public Agricultural Bank of Greece to a private bank in order to raise money and repay its creditors.

Yet in spite of all that, agriculture has done fairly well compared to some other sectors. Volume of agricultural production presents a relatively low decline of 2.5%, according to Eurostat. Regardless the size of economic ups and downs, Greece still remains home to the richest biodiversity in Europe. We believe that food is one of the more dynamic sectors in the current economy – therefore, agriculture and farming remain important vehicles that can help Greece successfully overcome its financial despair.

BF: This leads us to the formation of Golden Greece Holdings. What is the story behind your decision to invest in Greece?

GZ: We figured that producing, branding and exporting our own high-quality olive oil could be our best starting bet. So we convinced the local farmers to give it a try and join us, brought in capital, got to work and Greece’s climate and ecologically clean soil did the rest – as we had expected. Pretty soon, Golden Greece Olive – as the company was called back then – started churning out profits. And eventually, signs that the country was not only continuing to produce great quality products, but was actually beginning to ensure its position in the post-crisis era, were becoming more and more visible: from an increasing number of young people turning to agriculture to maximising the potential of organic farming through the usage of Copernicus, Europe’s earth-monitoring system, by the Greek government. For the first time in 20 years, employment in the agricultural sector has been rising.

Today, the sector's contribution to the economy has risen by €1bn, from 3.1% percent at the beginning of the crisis in 2008 to 4.2% now. Agriculture's contribution to the Greek economy is twice that of any other country in the EU, according to the Agricultural University of Athens. In Golden Greece Olive’s case, preparation met the opportunity, indeed.

BF: Today, you are a Greek holding company with 10 subsidiaries and significant multinational backing. Yet obviously your main business enterprise is Golden Greece Cannabis. What is the story behind this?

GZ: Yes, we have been expanding and currently have a few companies under the Golden Greece Holdings umbrella. It turned out that becoming another olive-oil producer was not our ultimate goal. If we look at our team members, they come from all walks of life. Some of us with years of experience working with US and Canadian publicly listed companies and whose forte is capital markets, others have extensive legal and technical backgrounds.

A few years ago, medical marijuana was all over the global news and its production back then was gaining momentum. Its market size was valued at $11.4bn in 2015 and was projected to grow considerably, so the money was there. As was the emotional appeal, as awareness regarding various medical applications – such as pain management, appetite enhancement, reducing eye pressure, migraine and arthritis treatment – was rising. In fact, one of us had witnessed his relative’s effects of cancer reversed through application of Phoenix Tears – a derivative of cannabis oil.

We did realise that the cannabis industry was much more than just grow operations and dispensaries, but most of us couldn’t boast of considerable industry experience. It was unlike any industry we had ever worked in, with all its regulatory, supply chain, banking, taxation, advertising, and stigma aspects. There had been no intention or even any notion among the government bureaucracy regarding legalising medical marijuana until recently. We had to knock on a lot of doors.

So, when starting Golden Greece Cannabis we identified two things that were crucial: understanding the unique challenges of this industry, and understanding your consumer base and the unmet need you are filling for them. It’s different today. The country's progressive attitudes toward cannabis, coupled with the Greek government's new liberal regulatory policies, have attracted a number of international investors to get on the Greek cannabis wagon, which they see as the best vehicle for transforming the medical cannabis field, still in its infancy, into a pharmaceutical-level industry. The European medical cannabis market will be valued at €50bn upon full legalisation, according to UK-based consultancy Prohibition Partners.

Speaking of multinational backing – today, Golden Greece Cannabis has support from such world-leading technology providers as CannaTec from Canada and Apollo Cannabis from Israel.

BF: How do you define yourselves? Are you an industrial group, a pharmaceuticals company or a wellbeing company?

GZ: We are a full production cycle company – we cultivate plants then derive certain elements to be used in pharmaceuticals and health products in order to enhance human wellbeing. Technically, we are in the early stages of integrating relevant infrastructure and services into agricultural ecosystems in Greece. Agroecosystems in turn provide us with food, forage, bioenergy and pharmaceuticals and are essential to human wellbeing. We support biodiversity and sustainability.

We utilise the tremendous advantages of existing agroecosystems with the variety of services that they already produce, such as regulation of soil and water quality, and carbon sequestration, for instance, and incorporate our services – some of them proprietary that we provide to industry participants. One example of such infrastructure and services provision is our Cannabis Park concept – massive indoor growing fields

We are progressing from being a group of nitty-gritty medical marijuana producers, to large-scale project managers, to creating a Golden Greece ecosystem which in due time will encompass areas from medical – and in the future recreational – marijuana production, branding, marketing, research and development facilities, plus traditional health and medicine, biotechnology, health technology, medical devices and paraphernalia, payment services and investment platforms.

BF: When we are talking about the specific opportunities, it has been publicly recorded that your first round of investment will total some €400m, according to Bloomberg.

GZ: You are referring to the Bloomberg write up on our Veroia project in Northern Greece. We did attract €400 million in the first round of funding for that. When the whole project is finished, which will take around 2-3 years to complete – we are looking at more than €1.2bn in investments across several areas including industrial processing of by-products. And we have more projects in the pipeline, the particulars of which will be announced publicly in due course. I can tell you that much apart from production of medical cannabis and industrial hemp, we are planning to expand in other sectors, such as medical tourism, for instance. Golden Greece Holdings joined forces with Swiss and Israeli experts to construct rehabilitation centres and scientific labs to help those suffering from all types of cancer. So when we are talking about opportunities – they abound indeed.

BF: This now brings up the thorny question. Obviously, medical cannabis at the moment is still a prohibited substance in many EU markets. But there is a growing movement towards the decriminalisation, if not quite legalisation, of the industry. What do you see as the future for the industry here in Europe?

GZ: We are very much aware of the illegal status of cannabis in different countries across Europe. But for comparison, let’s have a look at the North American markets first. Despite the fact that 95% of the US population lives in states where cannabis is legal in some form, marijuana remains federally illegal. Entities wanting to get involved are left navigating an array of legislative hurdles on a state-by-state basis, prohibitive out-of-state investment regulations and a prohibitive tax code.

Things are further ahead in Canada. Regulations for production and sales have been in place for over three years, and the marijuana industry there is growing like a proverbial weed. According to cannabis research firm ArcView, North American legal pot sales totalled $6.9bn last year and more than $46bn in weed sales was conducted under the table in 2016. In any case, not exactly a ground-zero starting point for business. The population of the US is approximately 325m and there are 35m living in Canada.

Now compare that to the EU's population of 510m, including Germany, which recently legalised medical cannabis and alone has more than 80 million people. Add that to Italy's nascent existing medicinal cannabis program and the rest of Europe will soon follow. I would refer you back to Bloomberg - "European markets are increasingly important to the cannabis sector. Each has a well-funded medical system, residents who seek natural and complementary therapies, and a government-supported mandate to stop the rising tide of opiate addiction related to chronic pain treatment."

In other words, the demand is there, but the supply side has fallen far behind. Bloomberg further reports: “Germany provides the perfect example. Medical marijuana became officially legal in the country in March 2017, and the country actually provides health coverage for medical marijuana. Unfortunately, there are very few legal medical cannabis producers, meaning Germany is reliant on imports to meet the demands of patients. As Germany moves smartly down this path of medicinal cannabis, the rest of Europe will soon follow. And to ignore 500m people in a stable economy is a mistake.” These are patient-driven markets. Our largest buyers come from Germany, Poland, Italy and Switzerland. In our opinion Europe is where the action is really heating up.

BF: The UK is one of the biggest investment centres in Europe, through which many from other countries funnel investment, particularly into the EU. Are you interested in investors from the UK? What would you like them to bring to the table?

GZ: Greece has literally opened its arms to foreign investment. There are several markets in the world right now that should be in the scopes of international investors who want a little ‘canna flair’ in their portfolio. For the most part, the safest part of the market is the international (at least to Americans) medical cannabis vertical, precisely because it is going to be so regulated.

Want a green, feel-good, pro-medical investment in your (institutionally backed) portfolio? European, Canadian, Israeli and Australian markets are all interesting bets right now. However, there is one place where the whole concept would be backed with an enthusiasm from a government, so far unseen anywhere else in the world. For that reason, outside of Germany there are few markets that have as much potential as the Greek medical cannabis market. Combined with tourism, which is on the rise, the conditions are perfect for a Mediterranean cannabis industry. Greece not only caters to an influx of visitors already – possibly as many as 40m last year – but this would be added icing on the Greek cake.

Pharmaceutical and health products with insignificant or no THC (the psychoactive component), as well as industrial hemp production, are other big categories we find attractive – and not only to institutional or medium to large corporations like CannaTec or Apollo Cannabis – but also to retail ones, including most definitely our potential partners from the UK.

Our investors do not need any specialised knowledge or require any permits. Business proposals can be sent to and we promise to entertain as many of them as we possibly can. We also promise to enable the prospective investor to have a wide access to this highly lucrative industry at these very early stages, while providing our full support, including, but not limited to technical, legal and logistical assistance. And considering that London is known as the financial capital of the world, we would be also interested in getting some of our companies listed on the London Stock Exchange’s AIM market, which has been offering growth companies, frequently with an international focus, the opportunity to secure access to capital markets.

BF; Do you have a concluding message for the readers of The Guardian?

GZ: In July 2017, the country’s Prime Minister Alexis Tsipras confirmed that Greece has become the sixth European country to legalise cannabis for medical purposes. Tsipras said: “From now on, the country is turning its page, as Greece is now included in countries where the delivery of medical cannabis to patients in need is legal.”

It is safe to say that the global opportunity is significant and many smart investors are doing their homework. We are thankful to all readers of The Guardian who are considering our Thessaloniki, Greece-based companies in their portfolio. We will be proud to share with you our vision, our business strategies and look forward to recognising this tremendous opportunity together.