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Information security. Exciting and digital. Hello and welcome to the Future of Business Podcast.
I am your host, Alyssa McArthur. Today on the podcast we'll be exploring an industry that until very recently was illegal in most of the world,
but loosening restrictions on cannabis generally and medical cannabis in particular have paved the way for a boom in the legal marijuana market.
To learn more, I recently sat down with two Gin Virk and Paul Steckler of Canopy Growth,
one of the leading players in the space and the first publicly listed cannabis company, Talent Pool.
Thank you so much for joining us today on the podcast. Why don't we start by you introducing yourselves and the company?
Great. Well, look, thank you for having us here. And you know, by way of introduction, I am to gender work, Teach for Short.
I am the deputy managing director for Canopy Growth in Europe.
And so with that role, I oversee the operational expansion of Canopy throughout the European region.
Hi, Paul Steckler. I'm CEO of Spectrum UK.
So my background is primarily pharmaceuticals and commercial.
So I've been in pharmaceuticals about 20 years as commercial director of Pfizer
a few years ago and chief commercial officer of some small UK biotechs.
And now just join this very exciting time of growth.
Yes, absolutely. So, yeah. Well, what got you both into the cannabis industry specifically?
It doesn't seem to be like an obvious career path business. Obviously, a lot of buzz around it at the moment.
Yeah, no, it's it's an exciting time to be a part of the industry and and lots of growth.
So my background actually was largely focussed on investment banking.
And in the investment banking space I worked with technology, consumer and pharmaceutical companies primarily.
So working on financing those companies, doing a lot of IPOs.
And, you know, really my, my interests were across all of those sectors and it was hard to find something outside of that that intersected,
I think, across all three. And then the cannabis space started to open up.
And for me personally,
that was really exciting because you have this really unique set up where there is both a consumer element and then a medical element,
and then there's some technology that ties it together. Yeah. Yeah.
So obviously public opinion has started to shift around the consumption of cannabis and, you know, regulation has loosened up a lot recently.
It's becoming legalised in some other countries and that seems to be a trend.
So obviously there are a lot of opportunities there. What do you think has caused this change?
So at a at a global level, I think there has been a increasing awareness of the medical efficacy of cannabis.
It was only probably since 2005 that there was a good understanding of the endocannabinoid system and how cannabis interacts with that.
And there's a sort of broader understanding of the therapeutic benefits of cannabis and different indications.
Canopy, for example, looks at claims pain, sleep and anxiety with them with recreational cannabis.
And this is more region specific. I think there's been this sense that the the way that cannabis was treated historically was ineffective,
whether you want to call it the war on drugs or rather other such sort of measures.
And by regulating it and controlling it, it's a it's a better outcome for consumers public safety and kind of drives,
you know, benefits all around for society.
So Canada, for example, legalised cannabis for recreational use in October 2018, and those were largely the motivations there.
And just I guess it's kind of a UK spin on it and and pharmaceutical spin, I guess.
So I'm someone who grew up in the seventies and I think it's fair to say the UK is very different now than it was back then in a good way.
So I think there has been a shift towards more liberal views, towards drugs and everything else that's going on.
And I think when you look at it from a pharmaceutical perspective, you know,
the Home Office talks about there's already 240,000 people buying cannabis illegally for medicinal purposes.
So this is not people smoking for recreational use. These people actually are very sick.
That's children with epilepsy, people with masks, etcetera, etcetera, etcetera.
Some people have a lot of pain, so there's already a huge market, people buying the drug on street corners in a way that's not regulated.
It's not very helpful and it's potentially dying. So.
So for me, I think the shift is coming because people realise actually people already have an access to cannabis.
We now need to regulate that so that people get good quality products.
And you know, in pharmacy, in the industry, really patient safety is as well as efficacy.
Patient safety is the biggest thing. It's the most important things I think and I think governments are beginning to realise that there's an
opportunity here actually to partner and build an industry that actually could prove to be in the future,
especially as clinical evidence builds over time, which it is.
It could this could be really useful for people in society.
And I think that's why it's so important that we continue to shift forward in the right way.
Mm hmm. So what's your views on the use of marijuana for medical use versus just purely recreational use?
Yeah. So at a at a company wide level.
So canopy growth has two business divisions.
You could largely group one of them as adult use recreation and for medical.
In Europe, we are a European B2B pharmaceutical company when it comes to medical cannabis, so we do not have a recreational focus in Europe.
Um, with regards to our view on recreational cannabis wants to operate in markets where it is federally permissible to do so.
And so if the government has appointed that it should be allowed,
we want to be a part of that business and sort of help the consumer journey along there.
And so for us, that that's pretty much where we focus and play.
Obviously, you know, the industry is in its early phases and canopy growth has managed to rack up a lot of first light.
So you're the first company this to be left on the major stock exchange, which is really interesting.
So what have been like the next big milestones for you and what differentiates you from your competitors?
How have you become so successful?
Well, I think I would add to that that list of firsts speaking at Oxford, actually doing a talk at the university students today.
You know, I think we're the first cannabis company to do that, but it's quite possibly.
Yeah. But I think so.
The question is what what sort of drives that you really this is I think it's a founder led mentality.
And Bruce Linton, who is co-CEO founder and chairman, came from a technology background.
He's a serial entrepreneur. And I think that that's the culture that he instils in Canopy and he was the person behind that,
that listing, the financing and then really the success of firsts after that,
building the team around him with that same mindset and that that was one of the attractive qualities for me to the company was to be a part of that,
that culture and you know, working in it, I can tell you that it's a it is a it's a hard working company,
great to great team work, great collaboration. And we all want to achieve that together.
Mm hmm. And so recently you've also you've made a number of acquisitions, recently a skincare company, which is which is interesting.
So what kind of product ranges do you have and how are you looking to expand that?
Yeah. So right now we're trying to cater our product base to what we're allowed to
sell in different markets and in places like Canada and the United States.
Beyond medicinal cannabis based medicines and recreational products, you also have things like skincare, topicals, cosmetics, beverages.
I mean, all of these things can be infused with with cannabinoids.
And if the markets allow for us to to actually sell those products.
And so I'm specifically referring to regulations. We want to be involved there.
I mean, our goal is to be the biggest cannabis company in the world, and we want to be playing in those markets.
So when it comes to things like skin care, that's something that you can see from our acquisition would be something we're interested in.
I think if you look at, you know, Canadian in the US markets, that those could be places where that makes sense.
Mm hmm. And what are some of the main challenges or roadblocks that you've encountered as you've grown the company over time?
Is it I mean, apart from the obvious kind of, you know,
the legalisation in terms of maybe public sentiment or something like that, lots of issues we had to deal with.
So public sentiment, I think we talked a bit about that earlier.
There seems to be a a tailwind behind the public supporting use of cannabis, at least at the medicinal level.
Recreational is so more controversial that that's something we have a government relations team that sort of works with us to
to help understand and interface with governments when it comes to the sort of the the day to day operational challenges.
If you look at Canopy, we we're very well capitalised.
We have a. Substantial investment from Constellation Brands, which is a large U.S. alcohol and spirits company.
And that I think the challenge has been taking that capital,
allocating it and growing as fast as we can to to tackle the opportunities that exist for us in different markets.
And and with that comes recruiting and hiring.
Coming up with the best business plans and then also pivoting as regulations change.
And and so you have a very dynamic environment to contend with.
And Paul, you mentioned earlier, you know, one of the potential impetuses for governance in terms of legalising cannabis,
at least for medical use, is the fact that people can easily get cannabis if they want to on a street corner.
And obviously, that comes with its own issues around, you know, the black market in supply chains.
Was canopy growth sort of doing around, you know, ensuring that it has like a transparent supply chain and there is sort of no issues.
So from a U.K. perspective, we clearly are working very closely with the regulators.
And there is a there is really strict guidelines, very well documented and published guidelines about how you bring cannabis into the country.
We are lucky, I guess, in the U.K. that we will have our own infrastructure.
And the way that cannabis is stored, monitored, tracked and everything else is is unbelievably strict.
And I should touch on actually the way that cannabis is grown. So I think many of you often, even when I joined this industry,
you imagine some people imagine a hippie in a field with loads of cannabis around and say, no, you know, it's not like that.
It is really strict pharmaceutical conditions.
You know, it's the science behind how you grow the right strains and how much THC in the product, how much CBD is in the product saturates asthmatics.
And it takes many years to get that experience to understand how to do that properly and canopy do do it properly.
So we. So it's so it's it's really interesting because it's not what I think people expect.
So we have a really strict supply chain.
It's really governed whether we bring cannabis in from Canada or from Germany, wherever else in the world we've been cannabis.
And it's, it's documented and we have to let the regulators know what we're bringing in when we bringing it.
And also, more importantly, why we bringing it in.
So we will document which patients we were going to inform, not mind patients, but obviously it's anonymous being for specific needs.
And actually really interesting in the U.K., what I think we need to remind people is that cannabis is used once all other products are filed.
So if it's a patient with chronic pain, for example, they have tried everything that is actually on the market,
including products, the way they've used them off label.
So whether it's, you know, even licensed for indication, they had that once they've tried all of these products, only then do get access to cannabis.
So we are more out there going for you've tried ibuprofen now you can try some cannabis it's this is
you've tried everything in the pain scale it's not worked and you know that you were kind of a loss,
as all patients say. So we thought about really, really, really, really strictly.
And it's funny because it's a challenge, but I think one of the. Just to add to that,
one of the biggest challenges in the UK I think is the stigma side of all patients who probably are already buying cannabis on the street corner.
We use that metaphorically, but you know,
they buying the products illegally and there is a stigma associated going to your GP or even your specialist say,
you know what, actually I can use this and it's work for me.
There is still that stigma that's similar to, you know, you go back, I can't remember when,
but a long time ago I remember that I launched by Agora in the UK and via group,
you know, erectile dysfunction back then, which is a long time ago now, it was the same stigma, you know, middle aged men interested.
I wasn't made licensed, but now I am.
It's kind of like, you know, middle aged men who just had this thing of, I can't go to the GP, I cannot talk about.
And they would skirt around the subject and say, I've got really bad cold or cough, you know, and we've got you can't compare the two.
I know. But this is a estimate of the cannabis, which I think is a challenge for us as well, which we need to come at somehow overcome.
Because if it's 240,000 people in the UK buying the product illegally already and actually the numbers could be much higher,
that's an all time office estimate. Could be way higher than that for a lot of people.
Yeah, no, definitely. I guess just to follow on from that, you know, you've got a compassionate pricing model,
so that's about making medical cannabis affordable for patients.
Could you and you also provide medical education programs to Canadian physicians?
Could you tell us a little about those initiatives and why that's so important to the company?
Sure. So that's a little more Canadian focussed and but I think speak to the principles of the company with the compassionate pricing.
So Canopy was founded around providing medical cannabis first and foremost,
and so wanting to make sure that the patients are receiving medicine at an affordable price.
And also, it's interesting to note that in Canada it's not covered under national health care, so it's not reimbursed.
There are some insurance programs that you can get that will cover medicinal cannabis use through.
Flexible benefits, but it's largely on the patient to to purchase this.
So that's where we tried to make sure that people are are getting access if if they fall within the,
I guess, the income band requirements to to get that with the medical education.
It's it's something that we try to to be a leader in in the market.
We want to make sure that patients, physicians understand exactly how the medicine works.
So understanding the science, understanding the dosage, obviously this is different in different markets in Canada.
It's a different way that we interact with the patient than it is in Europe.
In Canada, you do have a more direct contact with the patient here.
It's it's through doctors and pharmacists. We don't speak directly to the patient.
And so but, look, the information is out there and you can access it online.
So I guess there might be a challenge around the fact that, you know, it's not just customers that have to accept cannabis,
but when you were a B2B company, it would be doctors that are prescribing the cannabis.
So you have to get there buying as well. Do doctors see cannabis as a viable treatment at the moment?
Yeah. So it's a it's a great question. So so doctors are increasingly understanding that the cannabis is a a viable treatment therapy for,
again, some of the indications we talked about earlier, pain, sleep and anxiety.
Those are things that Canopy focuses on. There's obviously a longer list aside from that.
And and that's where the the education it's where the scientific studies are focussed.
And I mean, I think the the longer term goal would be to create more substantiated evidence based
claims around certain of these indications that a lot of doctors gravitate to.
But then this is also patient driven. So patients who have been buying on the black market or acquiring in Canada,
somehow they've been going to doctors and telling them what works for them as well.
You know, obviously this works into that framework of not being the first line treatment, but but after you've tried a bunch of other things.
But, but there is a certain amount of this driven by my patients and there are advocacy groups that the kind of follow the subject has been cool.
Thank you so much for joining us on the podcast today. It's great to have your time.
Thank you. You know, really pleasure to be here. Thank you. Thank you for listening to this week's podcast.
If you have any questions, comments or suggestions, you can reach us at SBC Podcast talks to AC UK.
Until next time, goodbye.