CBD, Europe, Farming, Investment

Did Switzerland just spark a ‘nobacco’ gold rush?

Nobacco CBD cigarettes
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As applications for the hemp plant continue to proliferate, a new product that recently showed up in shops in Switzerland and Italy could prove yet another subcategory sweet spot for CBD hemp growers.

Richard Rose, key speaker at Hemp 2020 at the Palace at Nakło, Lelów, Poland.
Richard Rose

Dubbed “nobacco” by American hemp guru Richard Rose, the product, which can come in a variety of forms including rolled into a cigarette, “is all health and no high,” says Rose, noting that CBD hemp, which has less than 0.3% THC, can be grown like marijuana, either indoors or out.

Vendors in Switzerland, where nobacco products started showing up in shops early this year, say sales are booming. The surge was triggered in part by mandatory health warnings on packaging – which had the marketing effect of underscoring the product’s legality, Swiss vendors have said.

Taxed like tobacco

The Swiss are taxing the product similar to tobacco. Sales started in smaller cannabis and paraphernalia shops, and just last month boutique Swiss tobacco firm Heimat announced a deal to sell its name-brand packs of CBD cigarettes in Coop, a major supermarket chain. The Coop chain already stocks hemp-based products in its stores such as tea, beer, and oil, with sales in the category reported as brisk.

Dr. Green, a small shop in western Austria, says it’s currently racking up €93,000 per month in sales of CBD/tobacco products, having opened its doors just this past December.

Heimat’s hemp cigarettes, which contain 20% CBD and “<1%” THC, come in a 4-gram pack that sells for €19.90. It enters a Swiss market in which cannabis sales are estimated at about €90 million annually. While that’s a pittance in the broader cannabis markets around Europe, Switzerland, with the continent’s highest allowable level for products containing THC at a full 1%, is proving an ideal startup market for “nobacco” makers and marketers. And Swiss proponents see tourism potential in the product, saying they could draw customers from Germany, France and Italy.

Where’s the risk?

Those exploring nobacco launches in other EU countries must meet a much lower THC limit as most European nations constrain its content to 0.2%. That could be the only real barrier to rapid sector expansion, said Haile Selassie Tefari, of France-based Hemp Service International (HSI), a wholesaler and retailer of cannaromatherapy products which recently started offering nobacco cigarettes at wholesale.

“Maintaining a strict 0.2% THC restriction on commercial nobacco products implies that each batch or stick must be checked on an individual basis to avoid a legal quagmire,” Tefari said. “With analysis costing a minimum of €50, it becomes not only costly but also could be risky in countries that still have a literal 0.2% THC limit.”

‘Mary Moonlight’ & ‘Easy Joint’

Nonetheless, products meeting that standard have already started showing up in France; and in Italy, where brands such as “Mary Moonlight” and “Easy Joint” are freely available, and where the THC limit is a relatively high 0.6%. A group of American investors are known to be lining up suppliers to begin production in Poland, with plans to use the Central European country as a base for exports.

“I see no barriers to entry in the U.S. or EU,” said consultant Rose, who sees a vast potential market in the U.S. among aging pot smokers who don’t want the strong high in marijuana, and tobacco smokers looking for a more healthy alternative.

Rose, who has two decades in cannabis product development, began promoting the nobacco concept during a presentation at NoCo Hemp Expo in Colorado in 2015. He said the product can be marketed as a healthy non-nicotine smoking blend.

“Health claims of course are out, but strong marketing can overcome that,” Rose said, noting nobacco could be categorized as a “dietary supplement” in the United States. In Europe, the mixture has been marketed as a tea in buds. “But as cigarettes, it’s a brand new ballgame,” said Rose, adding delivery can also be in loose flower form, dabs and concentrates.

By Rose’s calculations, this year’s harvest specifically for brands that he has worked on will be somewhere near 50 metric tons. “I was recently at a farm in Italy where they’ve put in thousands of plants, double-digit hectares, all seedless and all for nobacco,” Rose said, noting the best nobacco is blended from seedless flowers from hemp varieties such as Finola and Kompolti.

Boon for small farmers?

Rose, who’s freely distributing a rather detailed business roadmap for farmers and entrepreneurs, sees the kind of specialty farming required for nobacco as a potential boon for European agriculture, particularly in some parts of Europe where farms tend to be small.

He calculates 1,000 lbs. (450kg) per acre (0.4 hectares) of flowers can be grown outdoors. Down the value chain at retail, that amount of dry matter could bring as much as $500,000 (€436,000), Rose said, adding that the crop also can be grown indoors, meaning four crops per year is feasible.

“This is totally do-able, and it’s on the cutting edge of a potentially huge new category of the cannabis market,” Rose said. “One with far fewer regulations and stigma than marijuana; one that can return sustainability to the small and hobbyist farmer, while improving the health and happiness of those under-served currently by the legal cannabis industry.”

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