Since 2017, Switzerland has allowed the production and sale of low THC hemp inflorescences. A market which, however, did not turn out to be the gold mine that some had imagined.
Hemp and its derivatives like THC vape oil 1% are no longer considered as narcotics by Swiss law since 2011.
However, the “boom” of light cannabis only occurred in 2017, when it became possible to produce and market the unprocessed inflorescences of this plant in Switzerland, as long as the THC content does not exceed 1%.
Many saw it as an opportunity, a new “Eldorado”. The five producers registered at the start of 2017 rose to 630 in 2018. But for two years now, something is changing.
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A phenomenon that can be seen in the field, or rather, in the fields. As the Italian-language newspaper Corriere del Ticino recently wrote, in the Magadino plain (between Bellinzona and Locarno), the green of marijuana is losing ground in favor of the red of tomatoes.
In the canton of Ticino, those who want to grow hemp are required to notify the authorities. There were three such notifications in 2016, then 12 the following year, and 33 in 2018. Since then, the trend seems to be downward. At the end of October 2020, there were 24 notifications (with three still being processed).
Green gold shines less
This development can in all probability be attributed to one of the basic rules of the market: when supply exceeds demand, the price of the product falls. This is the opinion of Stefano Caverzasio, director of Purexis, a company active in the marketing and processing of this raw material since 2011. Although he also sells inflorescences, his company mainly focuses on processed products, such as food supplements, cosmetics, and pharmaceuticals, almost entirely made in his laboratory in Manno. It also has a small indoor growing facility licensed for research and development purposes.
“The saturation of demand for raw materials that we are seeing in Switzerland reflects a reality already well known overseas”
Stefano Caverzasio, director of Purexis.
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“The saturation of the demand for raw materials that we are seeing in Switzerland reflects a reality already well known overseas (in the United States, Canada, and certain Latin American countries), where there is an increase in companies that slow down or even suspend production because the supply of available raw materials has long exceeded demand, ”explains Stefano Caverzasio.
Every week, Purexis receives dozens of requests from producers, both Swiss and foreign, who are trying to sell a raw material whose market price has fallen.
At the time of their legalization, the inflorescences were commercially available for a price between 5,000 and 10,000 francs per kilo, depending on the quality. “Now you can easily remove a zero,” says Stefano Caverzasio.
The emergence of large producers, who over the years have extended their cultivation areas in Switzerland and elsewhere, has also contributed to this decline.
They have developed mainly according to two models. The first is represented by companies directly active in the hemp sector which have developed, taken over other companies, and bought the land. The second includes large farms that rent land and decide each year whether or not to produce hemp-based on market demand. These models can afford large productions of a high level of quality, against which a small company can hardly compete.
The president of the Ticino Horticulturalists Association (OrTi) Andrea Zanini makes the same assumption. In the Ticino press, he has repeatedly expressed his skepticism about hemp cultivation.
In general, farmers do not cultivate the plant themselves, but sublet land and greenhouses to do so or collaborate with third parties, explains the latter. Some financially struggling companies saw cannabis as a “lifeline,” he says, but not always knowing who they were dealing with “they sometimes had nasty surprises.” They were envious, but those who wanted to get into this business were not always up to the task and failed, says Andrea Zanini.
“The same rhetoric is valid for market gardening,” continues the president of OrTi. Whoever finds himself in difficulty does not work well. Whoever has a bad product has a hard time selling it. ”
This also happens with grapes, he adds. Many people have planted vines without much success. “There is a natural selection of those who work with nature.”
The return to traditional crops could also be attributed to the rental prices of land and greenhouses for growing hemp, emphasizes Stefano Caverzasio: “In several cases, they were significantly higher than for other crops. The general price leveling that followed caused a cost adjustment to prices closer to farm leases. A factor that may have discouraged those who rented their land to cultivate hemp in recent years.”
“Switzerland is made up of four things: “ Absinthe, casinos, banks, and hemp. ”
Andrea R., Dream project
Finding your place in the market
The analogy with wine seems particularly apt when talking to Andrea R., an entrepreneur who has decided to enter the hemp business for the second time. The passion with which he talks about his plants, the challenges to be overcome and the techniques to be used so that the final product has a certain quality and a certain taste, is not at all different from that which would show when a viticulture enthusiast would describe its vineyards.
Andrea R. is no newbie to cannabis. When he was 25, at the turn of the new millennium, he was among those who tried, and often found, their chances in producing and marketing cannabis. At that time, he had a legal vacuum in Switzerland. Hemp inflorescences, even with high THC content, could be produced and sold, but – at least in theory – not consumed.
These were the days of the hemp dealers, whose cabinet deodorants were so successful, so much so that people flocked, also from Italy, to buy them. Hard to believe there were so many wardrobes in the world. One would almost have thought that these scented sachets went up in smoke after the purchase.
The 2003 screw-up put an end to this activity and Andrea R. returned to work as a mechanic, believing that the legal cannabis discourse would be set aside in Switzerland for another hundred years.
However, it didn’t take that long to take a step in that direction, and the 45-year-old saw the opportunity to “rewrite the epilogue” of his adventure. Andrea R. thus opened her weed shop in California where you can buy weed online, after obtaining the authorizations to cultivate light cannabis indoors, far from fields and greenhouses.
This is the method he chose to carve out a niche for himself in a sector which he believes represents Switzerland, for better or for worse. This country, he says, is made up of four things: “Absinthe, casinos, banks, and hemp”.
For Andrea R., the evolution of the market which we are witnessing is positive, because “those who work badly will have to disappear”.
Change of perspective
The cultivation of cannabis, especially for recreational purposes, still faces some stigma in Switzerland, especially south of the Alps, but compared to the 2000s something has undoubtedly changed. First, the rules governing its production and marketing.
“Swiss legislation, despite certain critical points, has so far shown that it evolves clearly and often well before the countries around us. This lead offers great operational advantages to all Swiss companies in the sector compared to their European counterparts, which in some cases still operate in an unclear regulatory situation,”says Stefano Caverzasio.
“Who was a bigot has remained a bigot,” says Andrea R., “but now we can point out to him that cannabis is also sold in the supermarket where he does his shopping. If that doesn’t make him change his mind, it will at least make him think ”.
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The international factor comes into play with the legalization of unrestricted cannabis on THC content in a significant part of the United States and Canada. There are signs that such a change could also be happening on the old continent. Switzerland has already started to undertake studies in this direction. Andrea R. would be delighted with such a development, which would allow him to expand his offer with products promising much less “light” income.
Stefano Caverzasio, however, remains cautious about possible legislative changes in Switzerland. “Based on the information obtained so far from the federal authorities, we expect a Swiss scenario in which the changes in THC will remain moderate. Scientific progress will be favored over the purely recreational market. ”
He hopes that the therapeutic value of hemp can be recognized “to arrive soon at a commercial framework which ensures.
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