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The Cannabis Conversation. A European perspective on the emerging legal cannabis industry.
Welcome to The Cannabis Conversation with Anuj Desai, where I explore the new legal cannabis industry by speaking to the professionals that are helping to shape it. Today is another little milestone for me. It's my 20th episode. Glad that I made it here. Wasn't quite sure how long it would go on for, but it seems to be going well. I managed to bag myself some work on a couple of cannabis projects as well, but more about that a bit later.
The next episode that is coming up is another episode recorded at Cannabis Europa. This one is with two of the leading lights in the Canadian cannabis industry, Deepak Anand, and Michael Garbuz, of Materia Ventures. Canada is obviously leading the way in many parts of the cannabis industry worldwide, so it's brilliant to hear their insight. I hope you enjoy it.
I've got a Deepak Anand and Michael Garbuz here with me. Again, we're at the Cannabis Europa Valens pod booth. This is the second day of the conference. Michael and Deepak are cofounders of Materia Ventures, which is a business in Canada. I am comfortably told that they know everyone in Canadian cannabis, so hopefully they will be able to enlighten us.
And European cannabis.
And European cannabis now, after this amazing conference. They're both key influences in the Canadian cannabis industry so it'd be good to get their opinion, as Canadians, of what's happening in Europe and how we can merge those two worlds. Guys, welcome.
Thanks for having us.
Thanks for having us.
Yeah, pleasure. Why don't you start by just telling us a bit about Materia, but also about the other ventures you're in? Deepak, do you want to kick off?
Yeah. Absolutely. Michael and I founded Materia Ventures last quarter of last year. Materia Ventures is a CBD and medical cannabis supply and distribution company based in Europe. We've had a lot of experience in Canada and looking at the Canadian market for a long time. I've also had the opportunity to look at global cannabis space, whether it be Lesotho, whether it be Macedonia, whether it be Columbia, Jamaica, and a number of countries coming online now from a cultivation perspective, I've had an insight to either help governments shape policy, or to be able to look at where the cultivation game has gone.
What we did in Materia was not focus on cultivation, but more looking at supply and distribution because the challenge seems to be, particularly in Europe, there's a whole bunch of CBD products, whether it be here in the UK, in Holland, [inaudible 00:02:52] or a variety of other high street stores, or in Germany, grocery stores and supermarkets. The challenge is, there's a lot of unregulated, untested, and arguably unsafe product that's on the market.
In Canada, we've looked at this from a compliance lens to make sure that there's quality product that's actually coming to market. We're focusing very much on quality from that perspective to make sure that the products that we supply from Materia, whether it be CBD or medical cannabis, are actually first and foremost, of the highest quality.
That's great. Michael, would you want to tell us a bit about your story as well?
Yeah, no, I think to Deepak's point, we both spent a lot of time previously, as you mentioned, in North America and looking at where opportunities could be. Europe's been so exciting and this week really encompasses that. You have about 180 million euro market last year in terms of market size. All of the existing markets within Europe are getting larger almost on a month over month basis. You have new markets that could open up, new tender processes that are opening up on weekly/monthly basis.The opportunity is fantastic.
And then, as Deepak mentioned, it's like, what's the strategy to be able to actually capture market share. As you mentioned, we're relatively cultivation agnostic. We'll source product globally in places like Canada, but also from low cost jurisdictions, Columbia, Uruguay, et cetera. Ultimately we see the opportunity from a business perspective as tremendous because we can source really low margin inputs and sell into Europe where we have insurance coverage to a large degree in a lot of the jurisdictions we're selling into, we have pricing that's some of the highest pricing in the world. Ultimately for us, that's the focus. The key jurisdictions for us right now, are obviously the UK, but also in Denmark and Malta and focusing on continuing to build out our businesses there and just expand outwards.
The business opportunities are great, but I think I want to touch on something that's very close to at least what I'm doing, what I've done, is patient access. i think that's an important team. The business opportunities for sure are tremendous and significant and we've seen a lot of interest, but I think at a high level, patient access is very challenging, particularly in the UK where we're seeing patients having a really hard time accessing this.
This is something we've seen in Canada, and keep in mind, where we are in Canada, for better or for worse, it has been a terribly complex process from a patient access perspective. Where we've landed today in terms of our patient access regulations and laws and the ability for patients to access medical cannabis has been one that's fraught with challenges. Several governments over years have been taken to courts, demanding access to this as medicine and there's absolutely no reason why the UK needs to go down the same path.
I think what we bring from a Canadian perspective is a lot of experience. We've got 300,000 medical cannabis patients currently accessing cannabis in Canada, and the sky's not falling. We're seeing people dying on the sides of roads or getting into these massive drug interactions or overdosing on cannabis or any of those things that politicians predominantly are concerned about.
Just take it even a level further. We've seen tremendous results, which is a big reason why I think the world has followed Canada's path. We just came from a meeting with some of our partners that will be working on some technology for education in the UK, and they actually did a large clinical study where, I don't remember the exact statistics, but around 70% of patients that were using opioids for pain were able to actually get off opioids. And 97% of patients actually had a better experience with cannabis than they did with opioids for their pain treatment. It's a relatively innocuous substance.
I think one of the biggest challenges, to Deepak's point, is really around education and helping physicians, patients, government, regulators, and all of the different stakeholders that are part of the medical cannabis ecosystem to really get them educated about what's happening. But we see the pace at which it could happen as quite a bit quicker than other markets, which is really a lot of the excitement.
There's lots to pick up on there, but we talked about the barriers that have got in the way of actually spreading the love with the medical cannabis because no one's really getting it prescribed. Doctor education has come up a couple of times in terms of very understandably doctors don't know enough about this and have also, coming mostly from a world of this is a bad thing, so there's a lot of unlearning and relearning that needs to happen.
But with the benefit of the Canadian experience, what are the factors, do you think, that we need to overcome in the UK to get more wide scale adoption?
Look, first and foremost, politicians are going to have to be very open minded in terms of the way that they approach this. I it's been great to see the previous Home Secretary, Sasha Javid, very clearly look at this and say, "There is a problem here. We need to get Billy his medicine." I've been involved with Charlotte and Billy and the whole process from the very start of this. And actually before that incident to too.
I think that politicians need to keep an open mind to understanding and really learning from experiences around the world. When we were doing this in Canada, we didn't really have anywhere to look to as much as we were the second country in the world to legalize cannabis, even on the recreational side. Uruguay hasn't really gone about it from the same approach that we have in Canada. And we didn't really have a lot of people to look to.
But today, whether it be Australia, whether it be the UK, or whether it be France soon, or a variety or a myriad of countries coming online soon, there's no reason for them not to look at Canada and the way that we've done this.
I have to give credit to Health Canada. They're very approachable. They're very collaborative. Willing to work with international foreign governments. Politicians should take advantage of that. Reach out government to government and actually understand from Health Canada, how they did things, why they did things, what they did wrong. Health Canada is very open to discussing that.
In virtually any walk of life, you look at someone that's done it before, try and pick up on the good things, learn from the mistakes, so it'd be very obvious idea to get more involved with Health Canada [crosstalk 00:09:15].
It's not just mistakes that have been made, which I think are important, but it's also where we've come in Canada. We started at a place where the main product choice was dried herb and people were smoking joints or what have you as medical patients, and then over time, we've gotten to a place now where predominantly medical patients are using more consistent dosing in oils or pill based products. We have much better understanding whether, it's strains or cannabinoid content and ratios about specific ailments and what the product that those patients should be using.
So it's like, let's leverage all that information. Let's, to Deepak's point, let's collaborate government to government to be able to... The UK shouldn't be looking at this as like this is a trial run and the first time we're doing this, because at the end of the day, it's already happened and it's already happening, so let's look at those experiences, positive and negative, take best in class and get doctors excited.
I know in Canada, it was, for a while, it's almost like a Jones effect, one doctor won't prescribe unless everyone who they respect is prescribing. But it did eventually come to a point where there was more research, more studies, more anecdotal feedback, and patients who were just continually coming back with positive experiences, that eventually flipped the shift .
We categorize it as three different types of physicians. It was always doctors who are prescribing, doctors who won't prescribe, and doctors who are open to prescribing. I think it's that third one that really drives it. The people who are open. Because not every single doctor is going to be sitting, writing scripts for medical cannabis, but it's that stigma fading from people moving from this is not something I will ever prescribe, to, hey, if someone came in with the right symptoms and presented and has tried a lot of other things that hasn't been efficacious, I would actually have an open mind to medical cannabis. I think that's where we're at in the UK now, is trying to get people to at least have an open mind about what's going on.
Yeah, definitely. There's a journey to be traveled, isn't it? And you're always going to get the people who are just stick in the muds and say, I'm never going to consider it. So it's the swing voters, if you like, that you need to focus on. That's great on medical cannabis. What are your thoughts on the CBD wellness market? One of the things you mentioned was that in Europe, the retail prices are very high. Do you expect that to come down? Because actually, I think that is a bit of a bar at the moment, when you think about it's 30 or 50 pounds to get a small bottle of oil and, A, that's expensive, but B it's less likely to be one of those things that you try because it's got high entry requirement.
Look, three things in CBD from my perspective. One, it's fantastic that you actually have CBD as now food, which allows you to do a number of things. Particularly as I look at it from a Canadian perspective, because it's absolutely ridiculous in Canada that we have to regulate CBD the same as THC and we're looking at it as this plutonium type substance that you can actually do anything with, which we know definitely CBD has its harms. Alcohol has its harms. There's a number of substances that have harms. I'm not saying that it doesn't come with harms. But at the same time, you're allowing for the general public to be able to access this product that they, for better or for worse, want.
It is a trend. It is a fad. It's what people want access to. And the fact that this is not something that is going to negatively affect their health in any serious way is great from a European perspective. It's great that you've got that opportunity, especially as I look at this from Canada.
On the flip side, you've got a whole bunch of product that's out there on the market today that you have absolutely no idea what's in it. You don't know if this is snake oil. You don't know if it actually contains any CBD. You don't know if it actually contains THC. And by the way, THC, it's not a benign substance. There are effects on the developing brain. There's a number of things that you need to be careful about around THC. I'm concerned that the product that's out there right now down the street from me that I can get today at Boots or [inaudible 00:13:18] or any of the chains, might actually be unsafe, unregulated, and untested product, which is a concern.
At the Center for Medical Cannabis, which I'm part of, I'm very happy to be releasing a report this Thursday around what we've seen in the market out there and what we've looked at, that really highlights some of the concerns.
From a cost perspective, look, this is becoming mainstream. This is becoming a commodity. One of our intentions is to be able to provide a very cost effective approach to products. We will have mainstream products that are generally affordable by the public. There's certainly going to be high end brands, like you see on skincare side or the beauty side that will exist. We're actually going to participate on that side. But there's number of mainstream avenues to be able to access products. And we certainly want to be able to provide that to the UK and the rest of the European market.
To take a different lens on it, it's interesting, the opportunity in Europe to be, from a business perspective, to be potentially the first legal cannabinoid based product that a customer is trying. As Deepak mentioned, Canada, they're looped in, there's no separate CBD market, it's all one in the same.
In the US you do have quite a vibrant CBD market, but you also have a lot of THC production and customers, so while it's interesting what's happening on CBD side, there's also a huge amount of existing THC sales and customers who want THC products are just probably going to go buy them. Whereas we have this unique opportunity where the first thing that we're touching is CBD, which has never really happened before. So the first time that a customer can interact with a cannabinoid product, relatively innocuous, doesn't have as many of the... It is an entry level product, and it is interesting to see that it's probably more widespread, the CBD products, here than anywhere in the world. I don't know. The excitement of this industry never tends to stop the dynamic forces of play in different jurisdictions.
But for us, as a business, it's really about how do we take the best learnings from what we've seen and existing market conditions, because it is what it is today. There's huge opportunities. It actually creates a lot of opportunity for us. So it's exciting.
Yeah, of course. It is a buzzword, flavor of the month, type thing. Going back to the question of quality, I think what the danger is is if you have a lot of snake oil on the market, and that's your first interaction, you may just be like, this is rubbish, it hasn't doing anything for me. I might not come back to it. As it's in its infancy, these things will get better, I hope. But it's good to see that that's a key focus for you guys.
If we can move on, actually, to talk a bit about your personal story. One of the things I'd like to talk about in this podcast series is around the idea of career change, because everyone has done something different before they got into cannabis. Would you mind telling us a bit about your backstory, and how and why? What you were doing before and why you decided to move into this new crazy industry?
I'll take it even a step further and just my lifetime experience with cannabis. Because I think that plays into a lot of people's stories. For me, I always founded it an awkward topic and weird, whether it's with parents or even socially at parties, where it's just something that was consumed similar to alcohol and if you did have a hangover the next day it was generally pretty pleasant. But for some reason it was something that was kept behind the closet and undercover.
That was always just odd to me, but something that you just accepted. I was a lawyer, corporate lawyer, top firm in Canada, and started seeing a lot of companies raising money to build cannabis facilities and companies starting to go public, which was really a lot of the work that I did. So I just started getting my hands in randomly. I want to touch that and I want to touch that. And started to sense that the entrepreneurs in the industry and the other stakeholders, there's something quite special happening.
This was about four years ago and it was pretty clear at that time, with the Trudeau government coming into power, that cannabis was going to be legalized beyond the medical, but it was actually going to be a dual use. I think a lot of people, it was just very clear that it was going to happen. It wasn't an if. When you got into it and you got exposed to it, you realize that this is going to be pretty important because it's actually going to be legal where you can buy it anywhere. This is going to be the first federal country to do this.
Obviously the excitement that we've all experienced being at conferences like this, or phone calls, or meetings, it's definitely infectious. I started doing exclusively cannabis work at my law firm, and then that wasn't even enough for mem so I jumped out with a group called Origin House. We were a large brand distribution and manufacturing, mainly in California in the US. We built out the business to $1.1 Billion, the company got acquired earlier this quarter and-
As a lawyer myself, I understand the journey from law to cannabis.
I think it's a natural one. A lot of lawyers have come in just everything's. There's so much regulations around everything and there's also so many contracts to be signed and LOIs. Because the pace is so significant, that you enter into meaningful commercial agreements at a pace that I don't think other industries have seen. Usually it's a lot more business analysis. Whereas here it's a lot more strategy driven, which is fun.
Great. How about yourself, Deepak?
Look, from my perspective, I come from the pharmaceutical industry. In Europe, I've done a lot of work, the [inaudible 00:19:46] business, buying and selling pharmaceutical products, whether it be from India, whether it be from Greece and Italy and Bulgaria and Romania into the UK and then in Germany. So I understand the supply and distribution side very well.
The way that I got into the cannabis space was I set up an industry association very, very early on in Canada to lobby under one big tent for patients, physicians, everybody that involved in the medical cannabis industry. One of the things that I personally got affected by was the fact that I had, mothers of young children that were suffering seriously from seizures, not too different from Charlotte and what she's been through with Billy, or any of the other, Hannah, or any of the other mothers that have been through similar issues.
We saw this very early on in Canada. I came from the pharmaceutical side where cannabis was this big bad drug. It was a war on drugs. Your brain on drugs. All of those things were true to me and my belief in terms of the way that I looked at cannabis and I saw firsthand, well, hold on a second, I need to step back and relook at why that was the case.
Talking to patients on a day to day basis really helped me change my mind and look at this from a different approach. That's been the driving force behind why I do what I do every day, is first and foremost for patients. I'm glad that this is a recreational drug and that we have access to it as a recreational substance in Canada, but first and foremost, it's the medical side that I truly value and really see the firsthand benefits, when you look at kids like Billy, or you look at the hundreds of children in Canada that are currently accessing this and in Colorado and really around the world that are accessing this, I think that's truly life changing.
Yeah, absolutely. The conference has been a good focus on the medical side, because I think it's going to be medically led in Europe. The recreational bit, I think is no one's really, really talking about in Europe.
And that's a great point, because you shouldn't. As soon as you start to look at this from a recreational focus first, there's a number of challenges when you look at this from a policy and a regulatory lens that you need to consider. There's the driving issue. There's access issues. There's a number of things you need to factor in. One of the best things that we did in Canada was have a medical program from which we build on the recreational program. I caution countries like Luxembourg that are going to look at tackling the entire gamut at one time, because trust me, there's a number of challenges to that approach.
I think that's very wise. Coming from a conservative perspective, giving everyone all the goods straightaway is going to be quite a lot to take. I think it has to be a gradual process and it starts with, unfortunately, a sick child in the media and people will start to really understand what can happen here and how this can change stuff.
I'm going to move on to my traditional last question now, to both of you individually, what did your parents say when you said you were going to be working in cannabis?
Look, my parents still don't get it. They're in India and come from a very conservative background, as you can appreciate. They're constantly telling me, "Just don't get arrested." They just don't have an idea or concept what I'm doing, but I think they're coming around.
Good. How about yourself, Michael?
I think it will be similar in the UK where it's from a media perspective and just a perception perspective. It hasn't been stigmatized at all. In fact, it's looked at as a pretty exciting and lucrative industry. I think from that perspective, at least today... I think when I started, there was more eyebrows, whereas over time, as we've seen the development of the industry, it's become increasingly exciting for them and their friends.
Still from a consumption perspective, my parents do not understand medical or adult use cannabis at all. It just to me shows how deep some of the stigmas are, where you can talk to people about, you can educate someone for years and years and years, but stigma can be just so deep and people have feelings, especially with the smokable products. Because I honestly think the smell, just something about it is offensive to a lot of people. And no matter how many times you tell people glass of wine, cannabis, relatively innocuous, proven to be harmful, they can't really figure out which ones which. That's been an interesting and somewhat challenging experience for me.
Well, that's good to hear. Deepak, I can share your experience in terms of parental not understanding what I'm quite trying to do. But again, once you open people up to it, I think they start to understand a little bit about how compelling the argument is. we're getting there, I say.
Well, guys, it's been really great to chat to you. I'm really glad that everyone's having a great time with the conference. Thank you for sparing the time. [crosstalk 00:24:59].
Thanks for having us.
Thank you. That was fun.
Thanks very much for joining me there. Very pleased to get those guys on. They're very in demand and we're running around in between meetings, so it was good to bag a little bit of time with them. They, as we discussed, have really plugged into the cannabis scene in Canada, but also in Europe as well, and they have a great level of insight, so really pleased that they were able to share some with us.
One of the things that Deepak talked about actually was patient access. As we've heard a number of times on this series, despite legalization in November, very few patients, if any, have received medical cannabis via prescription. Off the back of this, there was a very disappointing report that came from the House of Commons Health and Social Care Committee this week, which appeared incomplete in its information sources and its conclusions, which was really quite disappointing. I will paste the link to some analysis from some greater minds than mine, but I'd ask you to have a look at it.
On a slightly more positive note, we've got the Europe CBD Expo this week at the XL Center in London. That's this Friday and Saturday, 12th and 13th of July. I'll be there. Hope to see some of you there too. I've also got some free tickets for you active listeners there. Just drop me a message if you want some of those.
When I mentioned that I've got a couple of cannabis projects, I'm really pleased to say that I'll be working with the guys who were behind the Product Earth Festival, James Walton and Gavin Sathanathian. It's a cannabis hemp expo meets, say, music festival, and I'll be helping to curate the educational seminars at the expo and the festival. so I'll blatantly just use that as an excuse to also bag some guests for my show, but I think it'd be really great. There will be a lot of people that I've already previously interviewed who are talking to a wider grip on all things cannabis and some great learning there.
But there will be lots of companies from all around the hemp and cannabis industries, basically showcasing what they do. And for me, it ticks a lot of boxes in cannabis, it's bringing people together, helping people to learn more about cannabis, and it's also having some fun camping in a field and listening to music.
So again, if you are keen on a festival, I'll be posting links to Product Earth, please check it out. And as always, if you're enjoying the show, please subscribe and like, and share, and I will catch you next week. Have a good one.
to Michael Garbuz and Deepak Anand who are key figures within the global cannabis space. Together, we speak about entry into the European market, what we can learn from Canada’s federal legalisation of both medical and recreational cannabis, and the key differences between the two markets.