Pubdate: Sun, 29 Mar 2020
Source: New York Times (NY)
Copyright: 2020 The New York Times Company
Author: David Segal


SKOPJE, North Macedonia - In a desolate industrial zone of this
capital city, a cannabis grow house is under construction that, when
finished, will span 178,000 square feet, about the size of a Walmart
superstore. At full capacity, 17 tons of marijuana a year, worth about
$50 million, will be harvested. Among the planned offerings is an
American strain known as Herijuana, a portmanteau of "heroin" and
"marijuana," which has received some rhapsodic online reviews.

"I feel blown to the dome omg," wrote a fan on Leafly, a cannabis
review site. "It also gave me the ability to rap."

Pharmacon, the company behind this operation, has everything it needs
for a thriving, dome-blowing business, including contracts with buyers
in Germany, Poland and the United Kingdom. Construction here in Skopje
has slowed in recent days, because new coronavirus regulations
restrict the number of people who can work in groups. But the building
will soon be completed and then Pharmacon will face a very different
kind of impediment: the government.

"They told everyone this is a huge opportunity for a new industry,"
said Zlatko Keskovski, a former karate instructor turned cannabis
entrepreneur, who works for Pharmacon. "They said they would have a
good law passed in a few months. That was almost two years ago."

Medical marijuana exports have been legal here since 2016. But to
date, the law allows only oils, extracts and tinctures, which,
measured by demand, are just 30 percent of the market. The other 70
percent is the smokable bud of the plant, known as "flower" in the
industry, the sale and export of which remain prohibited.

That was supposed to change in 2018, when government leaders announced
that the export law would be amended. Foreign investors were beckoned.
Additional licenses were issued. And there was a colorful come-hither
last August, when an American cannabis executive named Michael
Straumietis, who goes by "Big Mike," flew in on his private jet, met
with the country's prime minister, Zoran Zaev, and raved to his 2.6
million Instagram followers.

"Let me tell you, this country has huge potential," he wrote, "and I'm
excited to be a part of turning Macedonia into one of Europe's first
Cannabis Superpowers."

But the promised amendment has been bottlenecked in Parliament amid
allegations of corruption. The opposition party says that the prime
minister has steered cannabis licenses to relatives and allies, part
of a plan to cash in on a coming green rush.

"In December alone, there were 10 licenses issued and there are real
concerns that five of them were awarded to people close to Mr. Zaev,"
said Orce Gjorgjievski, a member of the executive committee of
VMRO-DPMNE, the largest opposition party in the country. "If this
isn't nepotism and corruption, then maybe the Medellin Cartel is a
charity organization."

Government officials say that only one relative of the prime minister
has been issued a license, and that they hope to pass the amendment
when Parliament reconvenes, which it is scheduled to do in April.

The coronavirus is sure to alter the timing of the eventual debate,
because North Macedonia declared a 30-day state of emergency in
mid-March and has more pressing matters to consider. But the fight
sheds light on a larger mystery: Why does Europe, a continent known
for progressive stands on issues like health care and taxes, not have
a thriving, international cannabis trade already?

Europeans, it turns out, are conservative when it comes to cannabis,
especially compared to the United States and Canada, where
recreational marijuana laws have proliferated for years. Even in the
Netherlands, where "coffee shops" sell Citrus Haze, Choconesia and
other strains, cannabis has never been explicitly legalized. (Sale and
consumption are tolerated in modest quantities.) Most European tokers
today buy on the black market, with the bulk of the supply coming from
Afghanistan via Albania.

"There's a general fear that if we legalize medical marijuana, it will
open the way to recreational marijuana," said Eoin Keenan, the head of
content at Prohibition Partners, a consultancy in London. "Europeans
want a more regulated, pharmaceutical model. Once we see that
normalized, conversations will advance to adult use."

Demand for medical marijuana is strong in countries such as Germany
and the Czech Republic and growing in the United Kingdom and Ireland,
Mr. Keenan said. But to date, only two countries, Portugal and the
Netherlands, allow the cultivation and export of medical marijuana.
Recently, the slow pace of legalization caused Prohibition Partners to
scale back its forecast for the size of the European market. It will
generate $2.5 billion in sales by 2024, the firm predicted in its
latest report, significantly down from the $39 billion it forecast
last year.

Grabbing some of that pie would have significant upside for North
Macedonia, a small, landlocked country of just 2.1 million people,
where the average monthly income is about $500.

The country has struggled economically since 1991, the year it
achieved independence after the breakup of Yugoslavia. A decade ago,
the government tried to kick-start a tourism boom by spending $750
million on an ambitious makeover, building hundreds statues in Skopje,
including a 47-foot bronze in the city's center called "warrior on a

The results made Skopje "the new capital of kitsch," the mayor of the
city's center municipality complained four years ago. The country's
international branding efforts were complicated last year when it
added "North" to its name. It was an effort to appease the Greeks, who
have long blocked the country's entry into NATO and the European
Union, claiming that the original "Macedonia" was a part of Greece.

Now, the proper way to refer to all things Macedonian is so convoluted
that the government issued an official Q. and A. guide called "North
Macedonia Made Simple." One question asked how to describe lunch with
the country's president.

"You would be correct to say that the president of North Macedonia
served you a lunch of delicious Macedonian specialties," the guide
explains. "It would not be correct to say that you had lunch with the
North Macedonian president."

The nuances of the medical cannabis market here are only slightly
easier to follow. Back in 2016, the nascent business enticed Mr.
Keskovski, a goateed 50-year-old who tells his life story in animated
bursts between cigarette puffs. The former president of the Macedonian
Kendo Federation, whose chops and kicks can be watched on YouTube, he
had served as the head of the government's security detail in 2000s.

"It was really a management job, because I had to negotiate and
coordinate with 24 different services in the government, like the
police, the army," he said. "Getting into cannabis is management, too
- except that in my other job, if I missed something, someone could
get killed."

He found investors in New York City and created NYSK Holdings in 2016.
(The company joined with Pharmacon, which is based in Poland, last
year.) First, NYSK constructed a 12,000-square-foot growing and
extraction operation. To visit it, a kind of hazmat suit is required,
as well as a mask and a pair of gloves. It's to protect the cannabis
from the people.

"You've got to remember, this is medicine," said Franz Sima, 31, one
of the horticulturists in charge.

Walking down a long hall, Mr. Sima opened a room filled with humming
fans, bright lights and row upon row of identical plants. "This is a
hybrid of Miracle Alien Cookies and Blue Killer, which is a strain
that I created," he said. "If you were to run your fingers over a stem
they'd smell very flowery, grape-y, lemony."

This facility once focused on just oils and tinctures. Lately, it has
been producing "mother plants," which will be shipped to the new,
larger facility. There, branches will be planted and later sold in
flower form to foreign buyers.

At least that is the plan. A vote on the amendment that would legalize
the export of flower was delayed again in February. The issue became
politically charged in recent months, when the number of licenses
issued by the government jumped by dozens. That's when the opposition
party began charging that a handful of those licenses would ultimately
enrich the prime minister.

Not so, says Venko Filipce, the country's health minister.

One cousin of the prime minister's has received a license, and no
other family members, he said - hardly enough to justify the charge of
nepotism. As for friends of the prime minister? He didn't know of any
with a license.

"But getting a license is just a starting point," he said. "No one is
getting rich from a license. It takes a huge investment and expertise."

To local cannabis activists, the most glaring problem with the current
system is only tangentially related to profits. As of now, just one
company makes a product for domestic use. It's expensive, weak and
available in only half of the health care system - namely, the half
run by the state - according to Janaki Mitrovski of Bilka, a nonprofit
that advocates legalization.

"When my mother had intestinal cancer, I, an attorney, had to buy a
kilogram from a drug dealer, a client of mine, and turn it into oil
myself," Mr. Mitrovski said. "We as citizens have given these guys a
golden business opportunity and in return, so far, we've got nothing
to show for it."

The country's cannabis entrepreneurs are every bit as irritated, for
very different reasons. Some have been growing and stockpiling flower
in anticipation of the passage of the amendment. If they are unable to
sell it soon, they might have to burn it - an expensive and tightly
regulated process given that it would be treated like medical waste.

"We sunk $15 million into the new facility," said Mr. Keskovski, his
voice rising. "I'm angry at both sides. They're fighting each other
and we're collateral damage."

He spoke while walking around the perimeter of the huge and austere
supersize grow house. It was ringed by high walls, barbed wire and
security cameras, features that are mandated by regulations.

"I told my partners not long ago," he said dryly, "if cannabis doesn't
work out, it would be pretty easy to turn this place into a jail."