Interview with Keith Merker, CEO, WeedMD – www.weedmd.com
On October 23, 2018, Keith Merker, CEO of WeedMD, spoke at Kahner Global's Cannabis Private Investment Summit in Toronto, Ontario. The event hosted more than 100 industry leaders and investors for a day of collaboration and networking.
Here, Merker provides some insight on what investors can expect in the year ahead and how WeedMD is positioning itself as a top 10 producer in Canada.
1) What is on the horizon for WeedMD in the year ahead?
We’re moving into a pivotal year with a major production ramp up that will influence the strategic opportunities we expect to capture in 2019. For starters, our state-of-the-art production facility in Southwestern Ontario is expected to progressively come on-line by first quarter 2019. Based on our production footprint, WeedMD is slated to become one of the top 10 producers in Canada – based on production output.
Additionally, we recently announced that we've partnered with a leading Quebec product formulation laboratory to spearhead our cannabis product development and appointed a Chief Innovation Officer, Dr. Domenico Fuoco, to lead the team. We've laid out an ambitious plan to branch out into health and wellness, cosmetics and nutraceuticals with Smart Medicines GMP Inc.
This will bring expanded revenue opportunities as we scale for growth to meet the demand of B2B markets, medical and recreational-use cannabis markets, as well as expand our product innovation and distribution channels on national and international levels.
2) What are the opportunities you see within Canada?
In Canada, long-term success will come to those that look to expand their portfolio of cannabis products and keep aligned with supply demand. We’ve positioned ourselves accordingly with product innovations, the ability to branch out into the nascent cannabis markets and scale production as required. These will be key areas of growth for WeedMD.
We’re eyeing the health and wellness markets where products such as CBD-infused-beverages, cosmetics/creams, nutraceuticals etc. are expected to be in demand, once our government approves.
3) What are the cross-border opportunities you see with the U.S. and elsewhere?
We are eyeing potential endeavors on almost every continent including across the border with some potential U.S.-based partners. More to come on that soon. Additionally, we recently exported our cannabis seeds abroad to Australia, and many other countries are now interested in following. Needless to say, our business development team is busy.
4) What most excites you about the future of the industry?
It’s the pioneering spirit under which this industry started. Rooted in a belief system that cannabis is a medicine with so many possibilities - it’s that mixture of science and entrepreneurship that is exciting. So many possibilities to expand into new markets, and we are just starting to explore this as an industry.
5) Will this market consolidate? The valuations — are they real?
We are seeing a few anomalies considering where most of Canada’s licensed producers are sitting. There are about 120 LPs however it’s only a matter of time before we see the authentic players rise to the top. We do believe consolidation will happen. Now that Canada has legalized, you will see big players from outside the cannabis industry start to take a bigger interest and therefore accelerate more consolidation. At the end of the day, the cannabis itself is the foundation of this industry, and those who can grow quality cannabis, avoid crop failures and innovate with new products will stand out as valuable players in this industry.
6) Are there any lessons learned you would share with investors, or with startups, looking to invest or enter the industry?
This industry is still in its infancy stage, and we are learning something new every day. Going forward, real fundamentals and quarterly earnings will start to matter. I would encourage investors to look at a company’s management team, earnings (level of revenue and growth rate), funding on hand, production capabilities and international opportunities. I would also look at companies who are innovating and creating cannabis derivative products. Those who can move fast will have first mover advantage.