SPOTLIGHT ON BUSINESS MAGAZINE
JANUARY 2018
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SPOTLIGHT ON BUSINESS MAGAZINE • JANUARY 2018
Its ticker symbol on the TSX is WMD. Its CEO Bruce Dawson-Scully appeared on BNN moments after it started trading publicly in April 2017. Its niche is medical cannabis for seniors. And it’s a Health Canada-licensed producer (LP) under the Access to Cannabis for Medical Purposes Regulations (ACMPR), a part of the 2009 Legislation Revision and Consolidation Act. Weed MD Rx Inc. is one of 45 licensed producers in Ontario and one of 80 in Canada. What sets Weed MD apart from other medical cannabis producers across The Great White North is its foundation. “I come from a family business,” Bruce explained. “I have spent most of my career operating, managing, and developing long-term care residences and retirement homes. I am third generation in that sector, actually. As a family we’ve dedicated most of the years of our lives taking care of seniors and we really helped pioneer that industry. We developed a really great housing program for seniors because we understood the market. Over the years we’ve established a great sense of how to build quality programs by focusing on enhancing the quality of life for seniors and that’s really the same mantra on which I’ve built Weed MD.” Bruce’s family recipe business plan is working. Since growing and storing its first plants in early 2016, Weed MD has gone from operating solely in its 27,000 square foot greenhouse in Aylmer, Ontario – with an annual yield of 1600 kilograms of dried cannabis annually – to an expanded operation that covers an approximate 220 000 square feet in a massive Stockton, Ontario greenhouse – with an anticipated annual yield of 20 tonnes. “And that’s just the first phase of our production in our expansion plan. In totality we will have over 1 000 000 square foot of production space operating at our farm,” Bruce said. By David MacDonald B ruce, 20 tonnes of annual production from one of the 80 licensed ACMPR producers seems like a big piece of the pie – but I don’t have much in the way of a reference or comparison considering the early stage of your industry. BD-S: That’s significant. That certainly pushes us into the
realm of a larger producer in this industry and it gives us a lot of latitude for growth and expansion. We found amazing partners who had a greenhouse in Strathroy that’s about 620 000 square feet – so close to 14 acres of greenhouse. In addition, we are currently building an additional 440,000 square feet. Our first phase of that will be in five acres of production or approximately 220 000 square feet. We will be producing about 20 tonnes of cannabis during that first phase. First and foremost, we want to ensure that we are always able to provide for the needs for our patients – and we do have a lot of patients. Outside of our seniors market that we take care of cur- rently, we’re north of 1200 patients that we are caring for right now and growing every day.. So, it is a lot but in the industry as a whole right now there seems to be a shortage of cannabis. A lot of LPs are expanding their operations to be able to accommodate not only the medical market but also in anticipation of accommodating the adult recre- ational market that’s slated for summer 2018. So we want to make sure that number one we can provide for our medical prescriptions for our patients. That being said, we’re also excited to expand and participate in the adult recreational market as well. One of the big factors that made me really dig-in to this industry was the issuesissues, so many seniors deal with because of polypharmacy. There are seniors in long-term care who take between 10 and 14 prescriptions per day on average. Many of these seniors look for ways to manage
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JANUARY 2018 • SPOTLIGHT ON BUSINESS MAGAZINE
that on their own and cannabis has really gained a lot of traction in larger discussions about pain management, for instance. “That’s significant. That certainly pushes us into the realm of a larger producer in this industry and it gives us a lot of latitude for growth and expansion.” Anecdotal evidence shows that the use of cannabis can reduce the use of opioids, reduce the use of anti-psycho- tropic drugs, treat depression, and increase appetite. All of the different pharmaceuticals we’re prescribing are creating negative interactions and setting limitations rather than managing symptoms and treating people like cannabis can. I understand that Weed MD has become a licensed producer and retailer of cannabis oil as well, Bruce. BD-S: We just got our sales licence for cannabis oil in July and I can imagine as we move forward that it’s a part of this business that will grow exponentially. For a lot of patients, and that includes seniors, they’d like to use the oil instead of smoking cannabis.
Getting that sales licence for oil is a huge milestone for us.
For the seniors market, our goal was always to move toward extracting the medicinal oils from the cannabis plant. To be able to provide specialty oils means more patients, more seniors, will experience the benefits of medical cannabis. Between growing over 60 different strains of dried cannabis, harvesting those plants and now extracting medicinal oils, you must have a very diverse team at Weed MD. BD-S: Absolutely. We have grown our team in the last year from about six people to 60 – and I suspect by July 2018,
by the time we roll out the recreational side of the business, our expansion plan will include well-north of 120 people. SoSo, we’ve really grown into things and we certainly do have a diverse group. We have people, scientists, who do specialize specifically in the extraction of cannabis oils. We also have horticultur- ists, growers, who specialize in tailoring our crops for our patients. “All of the different pharmaceuticals we’re prescribing are creating negative interactions and setting limitations rather than managing symptoms and treating people like cannabis can.”
We are currently growing a number of very diverse strains that we are very proud of. I think one thing to take real note of is that there are two cannabinoids that are really quantified in our testing: THC and CBD. THC gives you the high and CBD covers many of the medical benefits you hear about: it’s an anti-inflammatory and it helps manage anxiety, for example. So we have plants that actually have ranges in the body of the plant that affect each of those profiles. We have plants for example that are high THC but We look good together. ®
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BD-S: It’s like any other company these days in that regard. It was important. But for us in particular and this industry in particular, it’s probably one of the most important pieces that we have to offer our patients. We have a very limited ability to advertise for anything and in addition to that we have a very limited ability to make any claims about effica- cyefficacy, so we use our website as a means for patients to login and talk about how they are being supported by Weed MD. We have a client portal, or a patient portal, where they can come on and see what strains we’re offering, what oils we’re offering, and what products we’re offering. It is a very important tool for our patients right now because we don’t have a retail storefront and all of our business is done online – like every other licensed producer in Canada, currently. Anything that is not online right now in Canada is not legal for the most part, in terms of its distribution of cannabis – that’s the bottom line. There are many different dispensaries that have been around for many, many, many years treating patients – and I know quite a few of them – and unfortunatelyunfortunately, they’re not covered under the terms of the ACMPR and we can’t sell them products. I think there is a lot of confusion around how dispensaries work and how they deal with patients and the product that they’re providing patients. That’s notwithstanding the fact that they have many, many great people who understand the industry and some who pioneered it from the very beginning. Some people will go get a prescription from a doctor and the doctor will give them literature and direct them to the list of LPs, like us, on the Health Canada website and they’ll say, “No, I’ll just go to the dispensary two doors down from where I live. They have got everything that I need and they can just take my prescription and sign me up.” I think a lot of patients don’t understand the legal scope of the industry. A lot of these places are very informative, I’m not saying they have bad products, I just don’t know how they test for what they provide their patients and I don’t know where the product comes from. Nobody does, except for the dispen- sary. Here, at Weed MD, everything we do is regulated and fully transparent. How we grow our plants and how we approve our product is around traceability from seed to sale. We know where every plant has been and what has touched our plants. Every- thing is on camera and everything has been tested from the beginning to the end –and in between. So with the whole battery of quality assurance and regular inspection by Health Canada, patients can enjoy our cannabis with peace of mind. I understand that the LCBO, the Liquor Control Board of Ontario, will be the sole retailers of recreational cannabis come July 2018. As one of the larger LPs and given your potential for further expansion in your new 620,000 square feet greenhouse in Stockton, have you been contacted by the LCBO?
little CBD and then we have plants that have high CBD with little THC and there’s some that are one-to- one.
We are constantly looking at strain development; we are constantly looking at better ways to improve the quality of our products and that’s because we are really listening to our patients. We have a team that really cares about what they do and who they’re doing it for. I’m really proud of this team. We have invested a lot of time bringing together the best in-class from our scientists to our cultivation team and growers, our distributors, and our customer service team. I hear the accolades all the time. We get so much positive feedback about how we treat our patients and how great the customer support and customer service experience is. It certainly makes me very proud to be part of this team. Are there practicum experiences for horticulture students at Weed MD, Bruce? I understand that college campuses across Canada are getting their students ready for opportunities in the cannabis industry. BD-S: We have a great relationship with the University of Guelph and we have the opportunity to bring-in interns regularly. It’s an emerging industry and young people are really answering the call. We have students working with us right now and we’ve hired people after graduation. “We are constantly looking at strain development; we are constantly looking at better ways to improve the quality of our products and that’s because we are really listening to our patients.” There are so many fantastic jobs in this business and opportunities at so many different levels of this industry. I think that the colleges and the universities that are really paying attention are putting together wonderful programs and we’re collaborating with them whenever we have the opportunity. Across Canada there is going to be a huge emergence of a need for people to come in and work in this industry. It is exciting times and anyone who comes into this industry right now in its infancy stages is going to get to take advantage of so many more opportunities. The website is a patient’s or prospective patient’s dream come true. All the pertinent registration documents are available for print, including instructional medical documents to show to your doctor. How important was establishing such an informative, transparent, and user-friendly web presence in your industry? We’re just scratching the surface.
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BD-S: We have initiated the discussion and we’re current- ly having meetings with various agencies from different provinces across Canada. Each province has a different model for distribution and it is still being ironed out across the map. The LCBO model is probably one of the more advanced and they’ve really played a part in the regulations that have taken shape as they’re set to roll out in 40 stores across Ontario. “We have a client portal, or a patient portal, where they can come on and see what strains we’re offering, what oils we’re offering, and what products we’re offering.” I think they have a huge job ahead of them, though. So it’s not so onerous on the province, a single distributor, a sort of hybrid provincial-plus- private retail model might be required to meet the demand. Either way, we’re ready. Does your TSX stature help with negotiations with the LCBO and your standing as a trusted Licensed Producer of medical cannabis? BD-S: Definitely. Last year in April, we did go public, which was another big milestone for us. We are excited to go into the market. We have been support- ed by shareholders in the market and there is a tremendous amount of value and opportunity for shareholders in this industry – especially in our company. It was a huge day for us being on the market with industry colleagues for the first time. There is a little bit of speculation out there in terms of where the industry as whole is headed but the good news is that I think it’s all heading in the right direction. We are sitting here on deck and we are ready for it, either way. We will continue to listen to our patients, our customers, and we are excited about the growth of Weed MD and the ability to continue to grow into the different markets with the cannabis industry. We are pioneers in this industry and we are really excited about the future of cannabis in Canada and not only from a medical perspective but also from an adult recreational use perspective. I want people to know that we value our patients and we value our customers immensely and we will be listening to them and looking for ways to continue to improve all of our processes.
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as spotlighted in the JANUARY 2018 issue of SPOTLIGHT ON BUSINESS MAGAZINE
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