Bagger-Sørensen & Co, a Danish investment company and family office, is set to further move away from its plain chewing gum origins by expanding its existing footprint in the growing market for legal cannabis-derived products, according to Danish media.
The investment company holds a 30% stake in Fertin Pharma, a medicated chewing gum business, after selling a 70% stake in 2017. It also has investments in venture capital projects (Vecata Invest, 100% ownership), property (Bagger-Sørensen Invest, 100%), electronic cigarettes (Okono, 100%) as well as a B2B confectionary business known as Gumlink (100%).
The MedCan Pharma business, which is focused on delivering cannabinoid-based gums, lozenges and liquids for medical purposes, is a subsidiary of Okono. Berlinske Business reported that some DKK3bn (€403m) was freed up via the sale of Fertin Pharma, which could be used to invest in MedCan Pharma – which has sought approval to take part in cannabis trials approved by Danish lawmakers.
Recently, MedCan Pharma advertised for a scientist to take responsibility for its Cannabis Science Centre “which is a newly established function” in the company.
“You will be responsible for creating a network of knowledgeable people within the cannabis area – as well as collaborate with universities and research sites on specific projects,” the job advertisement noted.
The move by Bagger-Sørensen & Co comes as businesses around the world are cautiously expanding into the still-uncertain regulatorily, but nevertheless growing, cannabis-derived product area.
A number of States in the US have implemented regulatory environments that not only make it legal to sell and buy cannabis for personal use, but offer encouragement for the provision of cannabinoid-based medicines – even though the business of regulating medicines in the US a federal responsibility rather than one left to states, and the federal government has not yet followed in implementing law that redefines cannabis as anything other than an illegal drug.
However, Canada’s C-45 Bill – which passed its first hearing in the Canadian Senate in late November – will legalise cannabis across the whole country, by establishing strict rules around its manufacture, distribution and sale, as well as its use for medical purposes.
An estimated 30% of Canadian “young adults” reported using cannabis in the previous year, according to a 2015 study cited by the Canadian government.
Such developments will have been seen as an area of opportunity for a company like Bagger-Sørensen, which is already invested in nicotine gum products targeting smokers.
MedCan’s own website notes that the company “has applied for a number of patents with cannabinoids within chewing gum, C-liquids and other products for oral consumption”, while its chief executive (and CEO of parent Okono) Morten la Cour Pedersen has stated that the expertise across the broader Bagger-Sørensen group of chewing gum manufacturing can be used to make medical cannabis products.
It is no fluke that Bagger-Sørensen & Co is looking to leverage its expertise in the area of chewing gum based solutions to legal cannabis markets. Over the past century, the Bagger-Sørensen family built up a business manufacturing and selling chewing gum brands such as Stimorol and V6, before branching into nicotine gum.
The brands and their sales operations were sold to Cadbury Schweppes in 2002. Cadbury was subsequently bought by Kraft Foods in 2010 (since renamed Mondelez).
However, the family retained its B2B-focused Gumlink business, which in 2009 agreed a strategic deal with Turkey’s Yildiz Holding – one of the biggest food and non-food (including gum) manufacturers in Europe, the Middle East and Africa.
The deal saw a 50/50 venture – Continental Confectionary Co – established between Gumlink and Yildiz, which focuses on the B2B gum market. Gumlink R&D is still done in Denmark, while gum manufacturing is now done in Turkey.
According to its latest annual report, Bagger-Sørensen & Co posted a profit in 2016 of DKK133m (€17.8m), against a loss in 2012 of DKK119m (€16m).