SPOTLIGHT ON BUSINESS MAGAZINE
JANUARY 2018
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SPOTLIGHT ON BUSINESS MAGAZINE • JANUARY 2018
By David MacDonald M ax, I know the readers would love to hear about you and how Emblem Cannabis came to be in a marketplace with a notorious amount of red and yellow tape which likely hampered your every move. MZ: Well, cannabis is something that has been a part of my life since my late teens, late high school, early university and I knew the medical benefits back then. I saw how it helped people, how people who consumed cannabis socially were better off than people who were drinking socially. I’ve always been familiar with it on that level and I’ve never seen it as a social ill, I’ve never been quite able to understand the stigma attached to it. After university I was practising law, but I’ve always been very entrepreneurial. I founded a law firm with a partner about a year after practising – I still have the law firm, it’s at Avenue Road & Eglington in Midtown Toronto. We were dealing in real estate and condo development and a friend of mine came to me one day and told me that Health Canada was changing the rules in respect to how medical cannabis is going to be cultivated and distributed. That obviously piqued my interest. I knew what the market demand for cannabis was and hearing how profitable it was in certain jurisdictions in the United States and around the world and I couldn’t resist the opportunity. Having my own practice – we had grown to 10 lawyers and over 30 employ- ees at that point – I was able to step back and start focusing on getting a license, which is a very difficult road. That took a number of years. It was a journey that started back in 2012 and I was able to submit the application in early 2013. Here we are in 2017 and it’s still a journey. Was your background in real estate law helpful when you were looking for a home for Emblem Cannabis? MZ: For sure. The first transaction for the facility we’re in today was done through my law firm. I had a lot of familiarity with zoning and things like that. I knew I wanted to be in a municipality where zoning would be easy to acquire where the bureaucracy of land planning wouldn’t be too cumber- some.
When you think legal cannabis, you should think Max Zavet. He’s a lawyer and he’s the founder of Emblem Cannabis in Paris, Ontario. To say that Emblem’s approach to medical cannabis is holistic, in every sense of the word, would only begin to pay compliment to Max’s business acumen. As Canada moves closer to becoming the first G7 nation to legalize recreational cannabis – a multi-billion dollar marketplace Max is well-prepared for – questions about its medicinal efficacy and its social cost continue to rankle a conversation that’s long been wrapped- up in the minds of so many. There are more than 200,000 registered medical cannabis users in Canada and 80 licensed producers, or growers, coast-to- coast. But there are few better qualified to represent the medical cannabis industry – and cannabis as a whole – moving forward than Max. He sifts through dogma and political rhetoric with a precision you’d expect from a clerk of the court and he does it all from a perspective that needs to be a part of a conversation where the i’s need to be dotted and the t’s crossed before Canada Day 2018. And One of Emblem’s mantras “Cultivated with love” is the perfect opening salvo to that conversation. Each of Emblem’s 18 strains of dried flower, and their four cannabis oil products range in potency on two different and important scales: THC and CBD. THC, or tetrahydrocannabinol, is the principal psychoactive constituent of cannabis – the kick, as it were. CBD, or cannabidiol, is the other major cannabinoid found in the cannabis plant and is typically used to treat inflammation, epilepsy, and pain associated with diseases like multiple sclerosis. Emblem’s Aqua Flora: Shark Shock CBD has a CBD yield of 9.2 percent by weight with a much lower THC reading of 4.1. Artemis Maximus: Quantum Kush, on the other hand, has a THC yield of 22.6 and a CBD reading of 0.1. Both strains and every strain in between are grown and sold with a plethora of patients in mind. Max recommends that patients “track their symptoms and dosages daily” using Strainprint, a third-party personalized app for medical cannabis patients. Strainprint is just one example of Emblem’s holistic approach to medical cannabis. When Max and Emblem’s marketing manager Jordan Rodness spoke with Spotlight on Business in November all was revealed.
My past experience also really helped with Health Canada.
Navigating through the levels of government officials was something I knew how to deal with. If there are problems with the applications oftentimes it’s just a matter of interpretation and my legal background definitely helped with those sorts of issues.
We were at one point stuck on a particular issue. Our first
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JANUARY 2018 • SPOTLIGHT ON BUSINESS MAGAZINE
MZ: Medical cannabis has been legal in Canada since 2001. But the big landmark for medical cannabis patients in this country was R v Smith. Basically, they were then allowed to grow their own or designate a grower to grow on their behalf. But there was no commercial system; there had to be a direct relationship between grower and consumer where the grower had to be compensated for their overhead – and you know how that could work. Through the courts, these growers were given permission to grow for up-to four people and the plant counts were pretty massive for pre- scriptions, as much as 150 grams a day. That equated to something like 30 grams per plant, I believe. The point is, that program grew exponentially. Unfortunately, in some cases, much of the product wasn’t going to the designat- ed patient and it was flooding the black market and illegal dispensaries, the illegal market – the gray market we’ll call it because it was being cultivated under a legal guise but then distributed illegally. Law enforcement has been shutting down these dispensaries. What’s interesting is that there are now cases in front of the court in respect to “medical” dispensaries. The federal government is still being taken to task on its responses to the court’s rulings in respect to distribution, access, and product availability. How does this fence sitting impact your long-term planning? MZ: At Emblem we have three main verticals and I think each of them is well-poised to meet the market demand that’s coming, even though that’s evolving all the time. On the one hand we have our pharmaceutical division that’s run by John Stewart who is the former president and CEO of Purdue Pharma in both Canada and the US. He’s looking at dosages and cannabis medicines that aren’t dried flower. For example, we have a patent pending for a slow release tablet. In respect to those more advanced formulations and drug-like medications, they’re far better choices in many circumstances to opiates and other prescription drugs out there. It will take a little bit of time for regulatory approval after clinical observations and trials, but it is one side of this medical market that the black market will have a hard time infiltrating. In the long term that side of our business looks really promising. It’s not something we’ll have to adjust based on uncertainty with the illegal market. “My past experience also really helped with Health Canada. Navigating through the levels of government officials was something I knew how to deal with.”
application was for a different site and we changed course because we couldn’t get the proper electricity for that site and Health Canada wanted to drop our application. That would normally mean starting again from the back of the line but I was able to argue that our licensing process should proceed with the new site – and I won that argument. There are definitely times where I was in a good position to manoeuvre around the administrative hurdles that can get in the way for any entrepreneur. “I’ve always been familiar with it on that level and I’ve never seen it as a social ill, I’ve never been quite able to understand the stigma attached to it.” What was the state of the medical cannabis industry prior to the regulatory changes in 2012 and how has the industry changed since becoming a more open market?
Another part of our business is growing high quality premium flower. The evolving recreational market is some-
of these plants? MZ: The growing process is an interesting one – it has a lot of nuances. I’m not a trained grower but I know process at a very high level. We use skilled labour, people coming from horticulture and the food industry and people coming with pharma experience. It’s about quality assurance. We also have a lot of people who have science and lab back- grounds. There is a lot of science that goes into growing the optimal plant for whatever your needs are. You need to know about specific traits and then the necessary and pertinent details on theprocessing side for that plant type. It goes beyond the growth stage, too. We’re talking curing and packaging and then on the pharma side the extracting of the cannabis plant and then doing further refinement like specific distillation on cannabinoids and terpenes. It gets quite technical. We also have staff that take care of sanitation and support work. JR: There are also programs being introduced at a number of colleges and universities in Ontario particularly that focus on the cultivation and processing of cannabis. I know Niagara College has announced a horticulture program that focuses specifically on cannabis; Durham College, as
thing we must consider while we’re thinking about the expansion of our current facility. With the backdrop of the illegal market – because it’s still going to be around for the foreseeable future – I think there will be more pressure on the price in respect to licensed producers. We’d have to produce at a lower cost and produce higher volumes to meet the objectives of the government (which is to keep prices to 10 dollars a gram). There will always be options on the black market and the reputation of government stores won’t help the matter. I understand that expansion is in your future, Max. MZ: We originally acquired 80 acres in Paris, Ontario and we’re looking at expansion at that site. Our current facility is about 30,000 square feet of space between the grow space and admin and that facility will be expanding to about 60,000 square feet with more advanced lab space and materials handling – with very high indoor production capability as well. Who’s behind the research, the care, and the cultivation It will take a while for the legalized marketplace to develop.
well. It’s an educational angle that a lot of the more pro- gressive schools are taking.
and a brand that connects with its consumers. We have the best-rated customer service teams as evidenced by them winning the Canadian Cannabis Award for Top LP Customer Service this past December – and we provide gifts with pur- chases. We want to build brand loyalty, customer loyalty because at the end of day it comes down to word of mouth given the restrictions on publishing. The customer is the key influencer. JR: Health Canada has given cannabis companies a pretty well-defined box that we have to play in. It’s more or less the harsher aspects of the pharmaceutical, tobacco, and alcohol restrictions all rolled into one. We’re building a brand that stands for something more than just being a cannabis producer. We’re focusing on the wellness aspect. We’re saying that cannabis can be one tool in the tool kit people use to maintain a healthy and active lifestyle. Getting behind important causes like fundraising cam- paigns for certain conditions that cannabis can be benefi- cial in treating or managing is a major part of our branding process. So much of what we’re focusing on right now is education-based and it’s going to be that way for the fore- seeable future. The market is largely naïve about so many aspects of medicinal and recreational cannabis. We’re going to champion a lot of causes that shed light on it’s efficacy. What would you say directly to potential patients and customers guys? MZ: The Emblem experience. We’re all about caring for our clients, our customers, and making sure they’re going to have the best experience possible from calling one of our sales reps to opening the package. We’re going to be as transparent with you as possible. Cannabis is some- thing that people need to have the right information about because everyone’s experience is a little bit different; everyone reacts differently. You have to consider the strain and how you’re consuming it. Is it oil? Are you vapouriz- ing or ingesting it? If you have a caring team behind you it makes all the difference. JR: People have a misconception that everyone smoking a joint is flying, that they’re woozy and that’s just not the case. CBD has medicinal effects and benefits for people suffering from pain, mental illness, anxiety, and all sorts of other health conditions. That’s a big part of my mission at Emblem: to educate. You can’t judge a book by its cover. The first rule of cannabis marketing is Don’t talk about cannabis.
These students who are already there to learn about hor- ticulture and who have interest in the cannabis space will benefit from programs like this, from teachers with years of growing experience because these schools are adopting such a progressive outlook. I’m sure many readers have pre-conceived notions about the company culture at a medical cannabis operation, Max. Care to either verify or divert their imaginings? MZ : We’re leaders in marketing and branding and we have great relationships with people in the industry, in govern- ment, and on the legal side. It’s a business at the end of the day so the usual stressors are there but everyone from the growers to the executives want Emblem to be a leader in all categories and spaces. We don’t have to be the biggest, but we’ve got to be the smartest. “The evolving recreational market is something we have to consider while we’re thinking about the expansion of our current facility.” I’ve got to say that your “Let’s be buds” marketing slogan is a stroke of genius. I’m sure you and Jordan have had to dance the dance that Health Canada has laid out for the cannabis industry when it comes to mar- keting, Max. MZ: Marketing in this industry is difficult and I know Jordan can speak to this a lot more colourfully than I can. Health Canada is, of course, watching us and there are a lot of advertising restrictions, especially for recreational cannabis. Our advertising is going to be akin to tobacco advertising so promoting the use of cannabis is a big no-no. So, you’ve got to ask how you go about doing that effec- tively. We can’t even show pictures of the plant or the bud, so we’re limited to showing people having a good time without any product in the picture. It’s quite restrictive and what we need to do is be sort of cheeky while at the same time promote ourselves as an all-around wellness brand
many thanks to our advertisers
www.dfspharma.com
www.prazair.ca
EMBLEM CANNABIS
PO Box 20087 Northville Paris, ON N3L 4A5
1-844-546-3633
www.emblemcannabis.com
as spotlighted in the JANUARY 2018 issue of SPOTLIGHT ON BUSINESS MAGAZINE
www.spotlightonbusinessmagazine.com
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