What Does It Take to Start Your Own Cannabis Expo in Europe?
Updated: May 5
Interview with Kevin Rebelo Lopes from Hempzon
Note: The transcript has been edited for a more pleasant reading experience.
Tom Pettit 0:04
Hi everyone, and welcome to another episode of Smells Like Business, a podcast for anyone who wants to learn more about the current and future state of cannabis in Europe. Every episode, we talk to different business owners and cannabis specialists, making it easier for you to enter and better understand the cannabis industry.
I'm your host, Tom, and on this episode, we will be talking about Hempzon - a hemp Expo based in Luxembourg, which brings together experts as well as consumers and professionals to encourage innovation within the hemp sector. The first Expo took place last summer in July 2019, and we here at Smells Like Business were excited to announce that we would be collaborating with Hempzon this upcoming summer. However, since the recording of this episode, the Coronavirus has grown and spread dramatically.
So, unfortunately, as a result, both our events and our collaboration will be postponed until next year (2021). Our guest Kevin, who is one of the founders of Hepzon, is here to talk about the different aspects of setting up and running a hemp Expo as well as the challenges, including the Coronavirus, they have had to face so far.
So, Kevin, welcome and thank you for joining the show. How are you doing?
Kevin Rebelo Lopes 1:20
Hello, Tom, thanks. Fine. Well.
Why Is Luxembourg a Good Location for a Hemp Expo?
Tom Pettit 1:23
Great. Well, maybe we can start from the beginning. So, how did Hampzon come to be, and who are the masterminds behind it?
Actually, we are three. That's me, Kevin, Luca, and Domenico. Luca is my cousin, and Domenico is a bit older than us. He is in his 40s. He is my cousin's teacher, so my cousin has known him for more than 15 years, and I was always talking with my cousin about cannabis and what we can do and cannot do. And then he told me about his idea to maybe do an exposition.
So we started looking at the possibility of making it in Luxembourg. And then Luca told me about Domenico because Domenico does a lot of events in Luxembourg. He said to me, "Come, come sit together with us, we will look at it all three, and maybe if he's interested, we can do it as three people." So we sat together, we talked about everything. He was interested.
And then, quickly after the meeting, we launched the Expo, but unofficially because officially, the Hempzon was only created in January 2019. We actually started to put everything together in September 2018 already. These were very long months.
Tom Pettit 2:47
And what challenges did you have to face in setting up your first Expo?
In the beginning, it was difficult because we wanted to be transparent as much as possible. So we entered directly in contact with the Ministry of Health, but they didn't really want the Expo to happen in the beginning.
Tom Pettit 3:05
Because the whole CBD market was just starting in Luxembourg.
Shops were popping everywhere in Luxembourg. People were importing hundreds of kilos of CBD.
And the government didn't want that, so they didn't even want to have an Expo take place. But we explained that our project is not to promote cannabis as such, but the hemp and all the products behind it, and that we also do our prevention during the Expo. We had a lot of different associations from Luxembourg, which do prevention. And that resulted in the Minister of Health saying, "Okay, try it. We give you our okay to do it. But you need to respect the rules, which apply in Luxembourg".
But then there's another problem because then everybody in Europe started seeing CBD oils as novel food. So what was it, one month before the exposition the police went to the shops, and they started to take away all the products which contained it because they saw them as normal foods. So everything, basically, chocolate with hemp flowers in it, chocolate or creams, everything which contains CBD or which had the mention of CBD on it was taken away from the shops. And yeah, also we had a bit of panic because of the exposition. If they would come, they would maybe close it. But the two days of the exposition went pretty good. We had the opportunity that the Minister of Health notified us, what was it, one day before the exposition that he will come personally to open the exposition.
Tom Pettit 4:36
That was Etienne Schneider, right? He was the Health Minister at the time, wasn't he?
Yeah, he was the Health Minister at the time. And he was also the one who initiated the legalization process in Luxembourg for recreational cannabis. In the beginning. They didn't want to make the exposition, but in the end, we had the opportunity to have the ministry themselves present, so we think we did a good job in doing our prevention, but also in taking care that our exhibitors respected the rules, which are in Luxembourg.
Tom Pettit 5:08
Sounds like it was a bit of a balancing act, making the government happy, but also the exhibitors as well.
The Challenges of Running an International Hemp Expo in Europe
It's rather complicated because, in Europe, you have a lot of different legislations.
An exhibitor coming from Spain will tell us that in Spain, we can sell seeds, but in Luxembourg, we cannot sell seeds.
Tom Pettit 5:29
Yeah, I mean, the rules and regulations are still quite different in different European countries. So I can imagine when you're starting an expo or organizing your own Expo, it's not only the rules and the regulations in the country where the Expo is taking place you have to consider, but actually, you almost have to know what's going on in all these different countries where our exhibitors are coming from as well, to make sure that everyone is sort of doing things correctly and understands what is legit. Well, I can imagine it must have been a little bit of a heart attack when just a month before having your Expo, all these CBD products were being taken off the shelves by the police.
I remember it was, I don't know, I think it was a
Thursday morning at 8:30. I received a call from one of our exhibitors, "They are doing raids in every shop at the same moment".
I was like "What?!" and we called everybody to inform them that the police raid is going on and they all told us "they are already here, they are taking everything away. They want to close the shop". Because they seized the CBD flowers as if they were below 0.3% of THC and products which contained CBD or CBD crystals, but it was the market point, I think.
Tom Pettit 6:48
Yeah, to make the point... How is that situation now? Are these shops restocked with CBD products?
In January, you again got a change in Luxembourg. So now the CBD flowers and CBD hashish fall under the tobacco law. So basically, the shops are earning very few cents on a gram compared to the 7-8 Euro they could have made last year. And this is a problem because we have a lot of people who started less than one year ago. So they invested a lot of money into the shop, and now they are facing problems to get a profitable business.
We think that maybe more like 70% or 80% of the shops will close because the main money they could make was selling CBD flowers because the other product, there is not such a big profit range to make. And the market is also very small because not everybody wants CBD chocolate.
The main thing was CBD oil, but CBD oil is under novel foods. So they tried to sell it as other stuff, and the CBD flower is now completely regulated by tobacco laws. So you can't even promote your flower or anything like that. And this is also a problem for our exposition, because last year, everybody could sell CBD flowers. This year, it's restricted only to Luxembourg businesses, which are to meet the new tobacco laws, because you need to be established in Luxembourg and have a Luxembourgish VAT number to get the tobacco taxes.
Tom Pettit 8:34
And that's what the problem is, and that's why you can't have, for instance, certain Swiss companies or other companies coming in?
I can give you an example of that. Last year, they would tax 3% on their product. This year, the tax is at 53%
Tom Pettit 8:51
Oh my God, that's a crazy difference, isn't it?
So now you understand a bit why people are starting to close their shops.
Tom Pettit 9:00
It completely changes the business model, and it brings the profit margins right down. Yeah, that's the thing with CBD, and also with the cannabis industry in general, you know, it still hasn't really fully come to Europe and every country. It almost feels like they're trying to get to grips and understanding how they want to deal with these products. And it's a, it's a shame if they introduce one law and then suddenly take it away again.
I think for Europe, the best way to regulate CBD and hemp products would be on the EU level because otherwise, you don't manage to get a unique market.
And you always have difficulties doing business with people from a different country.
Tom Pettit 9:42
Yes, exactly. And with the EU, I mean, it's an open market, so it makes sense to also have similar or the same sort of regulations, you know. It would also make your job a little bit easier with the exhibitors.
How Is Covid-19 Impacting the Hemp and CBD Expo Industry?
Tom Pettit 9:58
And with these upcoming Hempzon events. Are you still working closely with the Luxembourgish governments, and have they been supportive?
Yeah, no, because we asked for a meeting, but in the meantime, Coronavirus happened.
The Ministry of Health is completely out of business, they're completely focused on this matter now, which is completely understandable, but it makes our job a little bit more difficult.
Tom Pettit 10:25
I was actually going to ask - how is the Coronavirus actually affecting you guys.
The problem is it's not affecting ourselves directly because we still continue doing our jobs, but it's mostly the exhibitors who are affected by it. And this can result in them not participating anymore. So we are now in close contact with everybody to look at how it's going for them. Because most of the shops are closed here in Luxembourg. The foreign exhibitors, they're also facing problems because most of the activities have been reduced or completely stopped.
Now you're also mainly waiting for exhibitors to look at how it's evolving on their side. You have the main cannabis industries in Europe, Italy, Spain, and Switzerland, and Italy and Spain are completely overwhelmed with the Covid-19 virus. So, we don't know how long it's gonna take for the situation to calm down.
Tom Pettit 11:24
It almost seems like you have to wait a week or two weeks and then reevaluate the situation because it is changing so fast. And like you said, Spain and Italy, they've got huge cannabis markets. Spain especially. And I mean, of course, they're being very affected by the Coronavirus at the moment. So business has just stopped, you know, so I guess we'll just have to wait until the business starts to get back to normal to sort of reevaluating the situation.
And of course, Amazon and us here at Smells Like Business, we're on the same boat, as we're going to be collaborating with one another, which of course is very exciting, about the upcoming events. So us here at Smells Like Business, we'll be actually doing our first event in collaboration with you guys.
We are pretty happy to make it happen also.
What Was the Idea Behind the Smells Like Business Cannabis Event?
Tom Pettit 12:10
Yeah, exactly. Well, we're very excited about it. We wanted to, or we're creating an event that is trying to prepare future entrepreneurs and job seekers for the full legalization of cannabis. So for us, Luxembourg was an obvious choice. And then finding out about you guys, where you're trying to bring together experts as well as consumers and professionals to sort of encourage innovation in the hemp sector, it almost seemed like a no-brainer to try and collaborate and work together.
Initially, at least from our end, we thought it might be some sort of simple way of collaborating, like maybe promoting each other online, offline, or doing some sort of joint ticket sale bundle. After our first conversation, you actually proposed to combine the events and have them together. How did you guys actually come up with the idea?
It was pretty simple, actually, because I've read about Smells Like Business on, I don't know where I read an article about an event happening in Luxembourg, And I was like, "What is this?! A cannabis event in Luxembourg?". So I went online, and I read everything. I sent it to the team members. And they were like, "Well, what is this? Ask them to come to our exposition and maybe do it together and reach the most possible people, instead of having two separate events in Luxembourg".
As Smells Like Business focuses on entrepreneurship and entering the cannabis industry, and that's exactly what we want to bring to our visitors.
We want to show them what cannabis is, what is the industry doing around the world, and you will show them how it's possible to get access to this industry and to meet the right people.
Tom Pettit 13:49
Yeah, and show them what possibilities they actually have. Like you said, it definitely felt like there was a crossover in what we want to achieve and what our goals are, and who our target group is.
I mean, I think if it is possible to collaborate, then you definitely should, because it just makes both sides stronger. It's almost like a win-win situation, and instead of making enemies in the industry, you're actually making friends, you're supporting one another.
That's the best way. I think it's the best way to work together with people. Because we noticed during the first edition of the exposition because we were completely new in the industry, we knew nobody except for the Luxembourgish shops, but everyone was kind enough to present partners to talk about the Expo. So we received a lot of calls. We talked with a lot of people.
When we visit expositions, we go and talk with everybody. So I think that's one interesting part of the cannabis industry. The people are very open, and they try to help.
Is Luxembourg Ready For Cannabis Legalization?
Tom Pettit 14:47
So what is it you'd like to achieve with this event in Luxembourg or do you have certain goals that you would like to achieve?
Our main goal from the beginning was to expose the population of Luxembourg to the fact that cannabis is not a drug anymore.
And never was a drug as promoted by our friends Americans. But it's a plant which offers a lot of possibilities and will create a lot of jobs in the future. So people need to realize what is hemp and cannabis and see what it is, what products can be made of it and have good prevention behind it because we don't want to banalize the cannabis consumption also, we want to inform and educate the people, we want to give the people a place where they can meet extraordinary professionals and get as much information as possible about cannabis.
Tom Pettit 15:39
Give them a better understanding of what it is.
Exactly, because most people don't understand what it is, they only know that it is classified as a drug. So basically, that is enough for them.
Tom Pettit 15:51
Yes, and I'm quite surprised that the government is now trying to legalize it because it is actually in some ways quite conservative, and Luxembourg doesn't have that same cannabis culture like, for instance, Spain does or, you know, the Netherlands, to a certain extent.
No, there is no cannabis culture in Luxembourg. Also, these CBD shops are there, but there is no real community behind them.
Tom Pettit 16:15
So I guess you guys are also trying to establish or create some sort of cannabis community as well.
Through the Expo, we try to bring everyone together.
Because we have also noticed after the Expo last year, a lot of people started to work together. Before the Expo, everybody was like, "I want to dominate the whole business for me alone." And today, they are working together, they are entering partnerships together, so we are pretty happy that this happened.
Tom Pettit 16:44
That's great. It's a bit like how Smells Like Business and Hempzon, we're collaborating with each other, and that's really nice to see that other people are doing the same.
What I think is quite funny is that it almost feels like Luxembourg is doing it the other way around, you know, they've actually implied that they are actually going to fully legalize cannabis in Luxembourg, but the social shift hasn't actually been done yet. I mean, usually, in countries, you'd think there would first be a sort of a social shift in society, and that from that, you get legislation come into place. But in Luxembourg, it feels like it's almost the other way around. You have the legislation coming into effect. And now you're almost having to play catch up in trying to get the population behind it. Right?
I think that was a political decision. To get votes, they announced the legalization of cannabis before the elections, but they announced it without having a plan or a vision of how to make this happen.
Tom Pettit 17:44
That's a little bit of the problem now, right? How to move forward?
I think that's the biggest problem because they announced the legalization three years ago, and you're still sitting here, and you're struggling to sell CBD in Luxembourg, which I don't understand.
Tom Pettit 17:58
But obviously, there must be a demand for it. Luxembourg doesn't have a big cannabis culture or anything, but they got the, what was it, the 5000 signatures.
But this also happened before the elections. The real Luxembourgish people, they don't want to see Luxembourg fall into a cannabis country. We are also very famous for our tax paradise and our cheap cigarettes and oil. So now, putting cannabis into the pot - it is too much for some people.
Tom Pettit 18:35
It's like you said, Luxembourg has this kind of specific image that I can imagine it wants to keep or to uphold. And I can imagine for many people, cannabis doesn't fit into that image. So what's your opinion on the rest of Europe with Luxembourg legalizing cannabis, I would like to think it will have a positive effect on the rest of Europe, and there might be some of the countries that follow.
Personally, I had the impression that there will be other countries legalizing before Luxembourg.
Tom Pettit 19:04
Yeah, like Malta was starting to talk about it.
Yeah, Malta, Croatia, Belgium, Germany are trying to put something together.
Tom Pettit 19:15
So Luxembourg was the first to announce, but it just depends how fast the whole process goes.
They announced it, and they are sleeping. Sleeping, and they don't like to have input from outside. That's a big problem.
Tom Pettit 19:31
Yeah, it could be good if they did have some help.
And what advice would you give to anyone in Luxembourg or even in Europe, for that matter, who's trying to get into the hemp or cannabis industry?
Is it Too Early to Start Working With Cannabis in Europe?
Try it, try to enter it and make an image of the industry and get to know the people working in the industry. I think it's the easiest way because if you don't try it, you will never be in the industry. I can give us an example. Because we thought of Hempzon, we were like, should we do it or not? And then we decided, okay, let's do it and see how everything folds out. And I'm happy we tried it even if in the beginning we had a fear that everything will fail. In the end, we did, and we are happy we did it.
Tom Pettit 20:20
Just try and go for it and, like you said, also build a network. I know for us at Smells Like Business when we went to Cannafest, or you go to Spannabis or any Expo, also Hempzon. These sort of places are a really great place to actually meet people and collaborate and, like you said, potentially work together and just expand and grow your network and your knowledge.
Exactly. People at fairs are mainly open to new ideas and to meeting people. So it's the best way to also meet people from the industry and maybe get a sneak preview of how the industry is functioning.
Tom Pettit 20:54
And the direction it's sort of going in. Yeah, yeah. And actually, also, there is a lot to offer in the industry, and there are many different things you can do. So I feel like it's almost trying to find a niche, you know, try and find your little corner and make something from that, basically.
In the cannabis industry, if everything becomes legal and regulated, there will be a lot of jobs created, there will be a lot of opportunities. Because it's not only growing cannabis, it's everything around also its marketing, its branding, its
Tom Pettit 21:27
Even laws and legislation
Anything. I'm studying law. Today, I'm studying finance and banking law, but I would rather see myself working in the cannabis regulations than working in financial law.
Tom Pettit 21:44
Yeah, I mean, you have a personal connection to it. And it's something that can develop, and I guess it's something you also feel passionate about, right?
Tom Pettit 21:54
It becomes a vocation more than just a job. And of course, what's nice about cannabis compared to alcohol is that with cannabis, okay, it's recreational, but it also has huge medical benefits that we're just discovering more and more every day. And also hemp. All the different uses you can have with hemp could also be a real game-changer on the industrial side of things as well. So that's also quite exciting.
Well, I only have one last question, which I ask all my guests, and that is: if you could go back in time, is there anything you would do differently?
Start earlier in the industry, I think I would take my courage and start much earlier.
Tom Pettit 22:37
As soon as you have an idea, just go for it. Right?
If you have an idea and you're confident about it, just do it.
It's like with Smells Like Business, you had the idea. You'd start, and now you're there! And we are talking to each other.
Tom Pettit 22:52
Yes, trying to make things happen, exactly. Well, thank you, Kevin. Thank you so much for this conversation. It's been a real pleasure having you, I wish you all the best, and I look forward to seeing you at the end of June.
Thanks for the call. Thanks, Tom.
Tom Pettit 23:34
So that was Kevin from Hempzon, who I just want to thank once again for taking the time and joining us on the show. As I mentioned at the beginning of the episode, unfortunately, Hempzon's Expo, along with our Smells Like Business event, will not be happening this summer due to the Coronavirus. Everything has now been pushed back by a year to the summer of 2021. I do hope to see you there. I've been your host, Tom. Have a green day, everybody.
Listen to the interview with Kevin here.