Bagger-Sørensen & Co., the Danish investment company and family office is set to further move away from its plain chewing gum origins into 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 the B2B confectionary business Gumlink (100%).
The MedCan Pharma business, which is focused on delivering cannabinoid-based gums, lozenges and liquids for medical purposes, is a subsidiary to 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.
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 – albeit medicines regulation is a federal responsibility in the US, 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, with strict rules around its manufacture, distribution and sale, as well as its use for medical purposes. Such developments are seen as an area of opportunity for a company that is already invested in nicotine gum products targeting smokers. An estimated 30% of Canadian “young adults” reported using cannabis in the previous year, according to a 2015 study cited by the Canadian government.
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 CEO (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 a B2B focused business named Gumlink, 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 Company – 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 the latest published annual report from Bagger-Sørensen & Co., 2016 saw it report a profit of DKK133m (€17.8m) against a loss some years earlier in 2012 of DKK-119m (€-16m).