Stephen Malloy, PharmaRolly Holdings B.V.:

Dutch growers choose North Macedonia: “Lowest labor costs of any medical cannabis producing country in Europe”

When a small group in Holland wanted to start a medical cannabis company in 2016, the location was the final dealmaker. “We were first looking at opportunities in the United States, but some of our investors didn’t want to take any risks being in a country where cannabis is not federally legal. Looking to do something in a country where cannabis is 100% legal, we turned to Europe. One of the first countries to legalize medical cannabis cultivation in Europe was North Macedonia. It’s an agricultural country that has the lowest labor costs of any medical cannabis-producing country over here,” explains Stephen Malloy, CEO of PharmaRolly Holdings B.V. The Dutch company has been producing medical cannabis in North Macedonia since 2019.

Stephen Malloy

Smooth start
While many were dealing with supply chain issues during the pandemic, PharmaRolly was unexpectedly prepared. “When working to start operations in 2019, we realized things were taking a very long time to arrive in North Macedonia. Unlike in the United States, for
example, we couldn’t simply go to a hardware store to find the simple cultivation supplies we needed. Therefore, we decided to start ordering everything three months in advance. A little while later, when the pandemic hit, we had everything ready to continue working through all the supply chain issues and lockdowns,” Stephen says. “This gave our company a head start while many other companies were dealing with delays.”

From their very first round of production, the company immediately took the opportunity to gain as much experience as possible, Stephen says. “While many companies start off with a pilot run, we immediately started growing 1 ton of cannabis in the first year. We wanted to
be running our SOPs right away, the same way we would be running when we would be fully operational. At the start, it was challenging. But now, we have lots of experience growing quality cannabis on a larger scale. Every year, we have improved our production to make
things faster and more cost-efficient.”

A Californian climate
In North Macedonia, cultivation is predominantly done in greenhouses, Stephen says. “It’s, of course, a more sustainable manner. Moreover, because of the climate, the quality of the production is very high. The climate is almost the same as in Northern California, which is
where our growing team originates from. The quality of Californian cannabis is respected for a reason, it’s a great environment for cannabis production.” Besides that, North Macedonia is a largely agricultural country where they are mostly growing organically. “That is what we did from day one as well. We see a trend of people thinking about what they are putting in their bodies, and it’s important to provide clean medicine to patients. We use an organic method referred to as no-till living soil, which enhances the terpenes and minor cannabinoids - It basically 3D prints mother nature to the fullest extent into a medicine.”

“Beyond that, the low labor costs were one of the main factors that drove us here,” Stephen says. “Compared to Portugal, labor costs in North Macedonia are three times lower. In Germany, labor costs are six times higher, and in Denmark, seven times. That is a drastic difference for any business.” When it comes to labor, Stephen also explains that it is a great benefit to enter a new market early. “It’s not as easy to build a good team when you come in late as all the best people are already hired.” PharmaRolly was an early participant in the cannabis market in North Macedonia, as they are currently in their fifth year of cultivation. “We attempt to maximize quality, sustainability, efficiency, and PnL,” he added.

With that many benefits, has the competition increased in North Macedonia? Not yet, according to Stephen. “60+ cultivation licenses have been given, but so far, only 5-10 companies are actually growing. Some are likely sitting on their license, waiting to sell it. But also, it’s not a simple task to adhere to EU GMP standards, so it’s not for everyone.” Stephen says that PharmaRolly tries to set its benchmark high, looking at the best practices internationally. “The product is for export. Therefore, we’re competing with everyone in the world, not just locally. Ensuring the highest quality is very important.”

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Stephen Malloy

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