Interview with Pat McCutcheon (MediPharm Labs)
On September 13th, of Pat McCutcheon of MediPharm Labs, will speak at Kahner Global's Cannabis Private Investment Summit in New York City, NY. This event gathers industryleaders and investors for a day of collaboration and networking.
Here, McCutcheon provides key insight into what investors can look for as Canada initiates full rollout in October, as well as the key to MediPharm’s positioning as the foremost producer of high quality cannabis oil.
This interview has been edited for length and clarity.
Can you talk about your journey to the cannabis industry and a bit about the history of MediPharm Labs?
I have been in pharmaceutical sales and marketing for the last 15 years before launching MediPharm Labs with four other like-minded professionals in 2015. Since then, we’re the first company to successfully achieve an oil production license without first receiving a cultivation license. Typically a cultivator, when licensed, would have to take a year before requesting a sales license. In under 6 months, we’ve already been able to apply for sales license from Health Canada.
What was that like-minded vision that you all shared for this particular venture?
The overall vision came from a perspective that, in looking at any other mature industry, it’s very difficult to find any examples of fully integrated companies. In Cannabis, typically cultivators look at a seed to sale model, where a cultivator will plant, grow and harvest the cannabis themselves; this model also includes the post process of extraction or purification and in terms of medicinal usage, marketing, distribution and product sales.
By contrast, if you look at a pharmaceutical model or automotive model for example, it’s very difficult to find any parallel where you see an evolved industry that goes from conception to final product sale. What you see instead is an industry with a number of different specializations and spinoffs. It’s very important, to be competitive, that you have to work with the organizations who are best at each stage/specialty.
With that in mind, where do you see the greatest opportunities within Canada?
The greatest opportunities by far would be the advanced derivatives marketplace, or the concentrate-based market. From a cultivation perspective, in terms of the flower, there’s only one target customer group, that is, customers who smoke the dried flower. If you’re looking at concentrate-based markets, you can participate in a plethora of different opportunities from drug development and distilled products, recreational products (like drinks and edibles) to vaporized products. So whereas the flower market itself is very targeted, the concentrate based market has much more of a robust opportunity within Canada and globally for export.
This potential, however, has been slowed on some fronts through Canada’s regulatory body, Health Canada. The edibles market, for example, has been challenged in this respect. How is the industry responding to the pace of government regulation?
Health Canada has been careful to identify safe doses to protect younger or less informed consumers, and they are taking a conservative approach in regards to the breadth of products until all connected regulatory bodies (Food Canada, Municipal Governments, Law Enforcement) have developed their policies. We’re expecting that within 8-12 month of the opening of the recreational based-market October 17ththere to be an established and well-defined edibles market. MediPharm Labs, post October 17th, will be focused on allowable concentrate based products such as tinctures, gel tabs and possibly vape pens pending regulatory approval. But we are planning for the great eventuality.
There has also been a 4 month gap between approval of the Cannabis Act and its upcoming rollout on October 17th. How has MediPharm approached this transition period?
The extended rollout of the Cannabis Act, has really given MediPharm the advantage of being able to incubate our relationships with larger cultivators. One of the biggest advantages that we offer is an accelerated oil strategy that drastically reduces the cost and intensive application process to move from a successful cultivation into oil based products. This extended time has given us the opportunity to broaden our cultivation partners ability to access oil based markets with only a small appendage to their license.
Was using that time to build relationships a direct response to address initial concerns about product shortage immediately following next month’s rollout?