Edmonton, Alberta-based Atlas Biotechnologies is expanding to Denmark, where the Canadian producer plans to repurpose a sprawling indoor mushroom farm for medical cannabis cultivation.
The initiative, expected to cost 40 million-50 million Canadian dollars ($27 million-$37 million), aims to be fully operational by the end of 2020.
Atlas follows in the footsteps of Canada-based international producers Aurora Cannabis, Aphria, ICC International Cannabis, The Green Organic Dutchman and Canopy Growth in choosing Denmark to establish a European footprint.
Though the valuations of many publicly traded Canadian marijuana companies are largely underpinned by high expectations in international markets, sales outside Canada remain relatively meager.
“A lot of (our competitors) are starting from scratch (in Denmark) – whereas, we’re taking a facility that produced mushrooms – and following the exact same formula we’ve used in Canada, a fully indoor model, with isolated microclimates that are independent from each other,” Jeff Gossain, chief operating officer, said in an interview.
The Edmonton company established a wholly owned subsidiary, Atlas Growers Denmark A/S, to utilize a leased, 170,000-square-foot facility with three dozen individual climate-controlled rooms.
The property is owned by Egehøj Champignon, Kent Stenvang, whose CEO will also serve as head of operations for Atlas Growers Denmark.
Gossain said it will be “the largest fully indoor cannabis cultivation facility that we know of in Europe.”
Atlas retains the right to purchase the leased property for 20 years.
“There’s two advantages of having the microclimates,” he said. “One is mitigating cross-contamination, and the second is having independent climates for the different genetics we’re going to be growing.”
Gossain said the company plans to tap demand in Denmark, Germany and the United Kingdom.
“We’ll sell into the Danish market, but our main focus is going to be supplying our customers we’ve locked up supply deals for in Germany,” he said.
Gossain said the company has the capital it needs to get started, but Atlas is looking at different ways to raise more money to accelerate the project.
Atlas has no immediate plans to go public.
“The market has softened up. It’s no longer a no-brainer that going public is the right solution,” he said.
Atlas aims to have a cultivation license from the Danish Medicines Agency in hand by the end of September for a small number of rooms.
The first harvest scheduled for early next year.
As of spring, roughly 2,500 individual patients in Denmark had been prescribed medical cannabis since the country’s program was launched in January 2018.
Matt Lamers can be reached at [email protected]