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Rena Sherbill: Welcome again to the Cannabis Investing Podcast where we speak with C-level executives, scientists, and law and sector expects to provide actionable investment insight and the context with which to understand the burgeoning cannabis industry. I’m your host, Rena Sherbill.
Hi everybody, welcome back to the show. Great to have you listening. Hope everybody is doing well. For the recent past, we’ve been speaking a lot about U.S. MSOs, Multi State Operators. With good reason, some of them are doing very well. Some of our favorites we’ve spoken about and we continue to speak about on the show in look for an upcoming episode with an interview with the CEO of Ayr Strategies (OTCQX:AYRSF). One of our top MSO picks, one of our favorites. One we’ve talked about on the show. So look for that in the coming days.
We’ve spoken a lot about the U.S. space, but today we are speaking with David Parry, who co-founded Cannsun in South Africa with his partner Pholoso, and they then acquired Medhel, which is a historically pharmaceutical company in Europe. We speak today about that bridge between the medical side of the sector, which really doesn’t get a ton of focus in the U.S. space.
The U.S. is interested really, in the rec side, the adult use side, more than the medical side, but in Europe and Africa and Asia the interest is much more on the medical side. The legality is being pushed on the medical side. David talks to us about what it means to be a historic pharmaceutical company with those connections with those ties to those areas, and building on those relationships to inform the established medical community about the power and the potential in Cannabis.
He talks about being based in South Africa in Cape Town, putting their farms in a community with the intention of raising up that community, but also integrating themselves and being partners in growing this community and growing Cannsun within that community with their feedback, not imposing what they think will work, but really listening to the community and how Cannsun Medhel is made up of largely women and people of color, which is great to hear, which we don’t hear enough of. You know, we speak about all the lip service that is paid to the social equity side, but not always followed through.
David gives us a really frank and honest look at what it means to run a company with an eye towards repairing that inequity that mostly in most cases, racial inequity, especially in a place like South Africa, which obviously carries its own history and is in its own way trying to right some wrongs in that sector. And David talks to us about being part of that, and wanting to further that growth.
And also, we talk about the geographic locations. Why they’re focusing on Thailand. Thailand’s relationship to cannabis, which is a great perspective. What he sees in Europe. What we have coming out of Europe? Specifically France, we talk about Africa, specifically South Africa where they’re based a great global picture.
We’ve been focused on the U.S. This is a great global picture, and also understanding and tapping into the indigenous communities that live in these parts of the world, and tapping into them for their knowledge about cannabis, which is extremely rich, and which really enhances their understanding of the plant, and how much it can help different elements, new elements, a ton of research being done.
How important that research is to further the knowledge and understanding of the potential of cannabis, how botanical extracts and other natural elements complement THC and CBD and really push the treatment and execution forward and efficacy forward of, you know what it can treat, focused on women’s products which are designed and conceived by women and how important that is to have the woman’s perspective, you know, on a woman’s product. And just really a richer understanding of cannabis and a richer understanding in different parts of the world than we typically focus on. So, a great conversation with David. Hope you really enjoy this one. Love to hear from you in the comments.
And before we begin, a brief disclaimer, nothing on this podcast should be taken as investment advice of any sort. And in my model cannabis portfolio, I’m long Trulieve, Khiron, GrowGeneration, Curaleaf, Vireo Health, and Isracann BioSciences. You can subscribe to us on Libsyn, Apple Podcast, Spotify, Google Play, and Stitcher.
David, welcome to the Cannabis Investing Podcast. Really happy that you are on the show. Thanks for joining us.
David Parry: Thank you. It’s a pleasure to be on your show and it’s a pleasure to get up early and talk to you.
RS: Yeah, yeah. Thanks for getting up early and talking to us. And like I said, before we got started, happy to have your first thoughts of the day, and I got David started on COVID talk before we started recording. But before we get to some of that talk and all the other things we want to talk about, talk to us about how you got to the cannabis industry and also the journey that you’ve taken with Cannsun.
DP: Well, I think like most kids that grew up all or part of their life in North America, we – mom’s had us in front of the TV and said that cannabis is a gateway drug. And we basically put those values on to our kids as well. So, it was something that, you know, you try to not be upfront in using it for whatever Medicaid or non-Medicaid reason and so I didn’t come into it complete with open eyes. I had to educate myself through friends that were self medicating and coming from a [complete new sector], the oil & gas engineering side, I was surprised once I started talking to people, seeing the number of friends or associates that were self-medicating for certain reasons. It just made me feel that that this industry six, seven years ago, really with the way natural medicines moving forward is hand-in-hand with really what most people seem to have a lifestyle that they want to portray in their life, you know, sort of that eat healthy, farm to table that cannabis health, you know, certainly could be part of it, and that’s sort of how, my sort of short-term journey into the space and then the last six years it’s – I’ve seen, you know, massive changes in Canada from, you know quite a regime that it was sort of, if it’s – if you don’t see it, don’t worry about it. It’s sort of in a – it’s hiding, given the background people are doing it to the point now that I can walk into a government store and they’re charging me tax on it. And a complete flip in six years. So, yeah, it’s good to see but, you know, we’ve got a long way to go on the medical side of it.
RS: Yeah, absolutely. So, professionally, you were in engineering?
DP: Yeah. I – we ran a – some companies that were based out of Russia and in the Middle East, that were supporting oil & gas companies in the parts of the world that people weren’t that keen on working in. So, given an opportunity to create some good contacts in places like Iraq, and Yemen and Kyrgyzstan, you know, places that are really not on the general list of people. Places people don’t work in or holiday in and that we don’t think it’s the downturn of oil. It’s the difficult place to work that seemed to close first and after seeing multiple cycles it was time to focus my energy on sending out and a friend asked me to help him out on a cannabis company in Canada that was just – he was just forming, that had a very small footprint and I got involved with him for two or three years and we turned it into a, quite a large footprint. We increased the size by about 40 times and now the company is up and running and hopefully in the – in sort of the over saturated Canadian market, I think that they’re going to be fairly successful in what they’re doing, but it’s, this is a decision we made that not to focus in Canada, because we just saw, you know, close to 200 companies in Canada, chasing 35 million people. And we saw three or four companies in Europe chasing 400 million people. And the math just made sense for us to use our contacts and folks in Europe and focus in Africa.
RS: Yeah, it’s interesting. You know, there’s a number, you know, people that are familiar with the cannabis industry know that there’s a bunch of people that came from the oil and gas sector into the cannabis industry, especially in Canada. And as you were talking, I was thinking, you know, you had a successful entry into the cannabis world from that, but what did you take with you that that enabled you to be successful? And I think what you just said, is probably the answer. I don’t know if you have more to add to that. But the fact that you saw right away that Canada was an over capitalized market, and you kind of pivoted to a different region of the world, would you say that that’s mostly what you took on from looking at the sector and kind of figuring out where you wanted to be within it?
DP: Yeah, I mean, absolutely. I think the other thing too is, we weren’t. We weren’t strictly focused on hiring people that knew the cannabis sector in Cannsun. We were focused on people that were best in their class of what they did on. It was the engineering side and the project management side and the fact that they might not have touched the cannabis plant. It didn’t matter so much to us because we also had some very good growers that complimented the team.
And I think that it gave us a more of a sort of an engineering approach to the business and I think that’s bode well for us and at the end, being able to work in remote locations as a team. So, when you get issues, like COVID, for instance, we were, it wasn’t devastating was just another problem we had to work through and find a solution for. So, I think it’s people is what the – key thing is we made sure that we brought the best people in.
RS: And did you parlay a lot of your relationships from your previous work? Were you like, listen, I’m starting this cannabis venture, you know, you’re, I know you’re going to be a good person to work with, did you broach it like that? Or did you just connect with people that were, you know, had connections to your previous connection?
DP: No. Both. I mean, on our current management team I have two that have worked with me in the oil & gas sector prior. And one of the hearing side, and one on the legal side and when we brought them in. And then, what’s – from a bureaucratic point-of-view, a lot of the same people we were dealing with say in Greece or in South Africa or Namibia or Iraq, that might have been in the Ministry of Oil & Gas or Ministry of Transportation or something. I also had contacts in the Ministry of Health. And we were able to leverage off those contracts to get in front of the right people to make proposals on how we wanted to start a new business in their country.
RS: Okay, so you start Cannsun, you kind of are building it out, and then what’s the next kind of iteration what takes it to where we are now?
DP: Well, so in 2017, I went down to Cape Town, my father lives there and I was going to visit him and I spoke to a friend of mine that, that I had some dealings with in the past getting Pholoso Malatji and I explained to him that what I wanted to do in South Africa and he said, let’s do it together and it made sense. Pholoso was – had some good connections to the [indiscernible] industry in South Africa. He knew Cape Town very well from a from a business point of view. He was there full time and it was important for us that we were part of this black business, empowerment – economic empowerment side where we could – we know, between Pholoso and I we made an important decision that we were going to pick up a very underrepresented community in Cape Town and put our farm beside them, so we could actually start creating jobs in that region. So, we’re that, that, you know, well 97% of our workforce or more would be people of color. And it was important for us that we were able to put something back to the community. And it would be very difficult. You need somebody that’s represented the community to be able to help you in that community as well. I think that’s where I was stubbing with Pholoso a little bit. Pholoso not only, you know, he was excellent at what he does, from a business point of view. He was the right person at the right place to be able to get the community behind us on what we wanted to do, and actually build the largest medical cannabis farm inside our community.
RS: I got it. And are those numbers dictated by the government or those numbers that you guys took on yourself?
DP: Which number specifically?
RS: In terms of, you know, locating yourself in that community and having a certain amount of people on your staff from that community.
DP: So, the choice of community was us. I mean, we could have chosen another – we could have chosen a more leafy white area to put the farm in, for sure. And that wasn’t a choice of – that wasn’t a government decision. That was a decision from us that, you know we had ideal growing conditions, but also, it was close access to labor. And it was an area that the city of Cape Town, we’re very happy to have us in that area because it was would be drawing jobs and drawing services out to that area that really needed help. And then on the government side, the Government of South Africa have something which is a black – there’s a broad based black economic empowerment. And what they do is, if you meet this criteria, you can then get into – have access to government loans, have access to government tenders that you wouldn’t have met if you were not part of this criteria or met this criteria. This criteria is based on the amount – the color of your skin, is probably the main criteria.
RS: And so what is the licensing? Are there any licenses given to white people are they all given is it predominantly, black people are given the licenses to kind of make amends for apartheid?
DP: I would say the first six licenses, five licenses, I think four of the first five were given to black enterprises. And then the fifth one, I’m not sure if they’re BBBEE compliant or not, but it was, it would certainly be one of the criteria’s that they would favor BBBEE compliant companies to get the licenses. But then there’s the whole other side of it, too it is, to be able to sell your final product into the National Health. You also have to be BBBEE compliant as well.
RS: Got you. So…
DP: So it, yeah, there was not – there was a number of different numbers of levels of bureaucracy that it was advantageous to be this. But from a management point of view – humanitarian point of view, we wanted to be in this area that our workforce weren’t being [bussed back and forth], but they could – they can walk to work or take a taxi to work and we wanted to be in the community.
RS: So talk to me, because this is something that comes up not just in South Africa, but also in America. You know, we’re seeing this with Illinois and different states kind of make amends and kind of make regulations to kind of, to make well the inhumane and unjust practices that have been up until now, and you know, giving out licenses and some people take issue with companies that are bringing on, you know, black executives or black employees as a way to get these licenses, is there have you been – have you met with any pushback from South Africa? Like the fact that you’re coming from outside South Africa? Is there any issue of, you know, you mentioned like not wanting to be exploitive and wanting to kind of like have the community be a part of your company? What was the process… yeah, yeah, go ahead.
DP: Sorry. You want to finish?
RS: No, I was just going to say like, what was the process of coming to those decisions and what have you been met with there?
DP: Well, majority of our board is black. Our senior management is also people of color as well. So, I think for us, it’s actually, it’s been quite smooth. I don’t know. I’m just speculating that it wouldn’t be as smooth. If you’re – if you weren’t black in dealing in some of these institutions and I think that – I mean the big fish of South Africa is 90% or 85% of the farmland is held by white farmers. I think the other 15 is not. And so, there is a land distribution issue there, and I think that if you could find some middle ground where to make it work, I think that you can keep the economy working there and still, you know give access to land that really should not have been or should have been shared earlier.
RS: Right. So, talk to me about bringing cannabis to that community. What’s the reaction been by the employees and what’s been the reaction of patients who are – or have you yet harvested and brought to market? Are you still in the growing stages?
DP: So, we’re about four weeks away from harvesting. From like from a cannabis point of view, South Africa would be far ahead of most places and that the indigenous community have used cannabis for, you know hundreds if not thousands of years. There’s when you talk to some of the sangomas, some of the local doctors that have bush medicine. They always have a treatment around cannabis and cannabinoids. There’s a good friend of mine Chris Maddie. She has told me stories of her grandmother’s grandmother giving cannabis tea to the kids when they were young for teething. I have other friends that they’re using for altitude sickness. So, the adaptation of cannabis in South Africa will be very, very quick.
It’s the government, I guess with COVID have slowed down a little bit on their priorities right now. We were hoping to see a little quicker access for patients in 2020. But like everyone in the world, the priorities have changed slightly. And rightly, so, but I think from a appreciation of cannabis as a medicine, not as a drug, I would say that South Africa would be much further ahead of North America.
RS: Love to hear it. It’s so interesting. I mean, first I want to say a couple of things; one, you know, especially in recent times, but it’s something that I think people in the cannabis world have been grappling with since it’s – since it became a more serious industry and an investable industry. You know this notion of righting the wrongs of completely unjust and racially biased, you know, incarceration. And also the amount of business people are predominantly white in a largely, you know, the industry on the black market side has mostly been, you know, people of color and I think grappling with these kind of discrepancies. And I think what people are asking for is, look, if you’re a company that’s coming into these indigenous communities and building your company, build it with that company in mind, you know, even if the founder or the owner or the CEO or the President is white, you know, like bridge it with the community that you’re being a part of, and that’s what is so nice to hear about what you’re saying not only are you putting Cannsun in the community where these people, you know where it makes most sense for the community itself, but also that you’re engaging with the community, you’re not just coming in and being like, listen, learn these genetics and grow this kind of cannabis. And this is what we want it for, but kind of integrating what’s already there. And that’s so interesting. I would imagine that only heightens the quality of what you’re growing.
DP: For sure. I think that they, it’s like any good workplace where people if they, if they enjoy what they’re doing, they’re going to do a better job and put more care into it, but I think the other – one of the things we haven’t implemented yet that we really want to and it’s really the reason we haven’t done it is just, we’re just getting our first crop right now is finding other ways to put the balance of the crop when we’re not using, if we’re just using the flowers and the trim, what do we do with the stock? And what do we do with the roots? And this is something that we’re in discussion with local community on, you know, can we pelletize it back and let them feed it to their chickens? Can we use it for their cattle? So, potential to use the whole plant? Obviously, we’d love to be able to put it into textiles, but the scale we’re at right now just makes it more sense to put the balance of the plant back into the community.
Hence, this way that, you know, we’ve sort of gotten this whole cycle that we’re taking the flower, we’re growing it, we’re putting jobs but in the community, we’re taking the stocks, we’re repurposing it to plant, to animal feed, and we’re buying those same animals, the milk, the eggs, the meat and you know, using it on the farm, you know to feed ourselves and feed the workers. I mean just trying to keep the farm as local as possible.
RS: Love to hear it. Love to hear it. So, talk to me about the focus of that because I think it’s an interesting angle and something that has come up before on the show the notion of focused, especially on the medicinal side focused targeted approaches, especially towards women, you know and kind of things that women have been dealing with that may be addressed by cannabis that hasn’t been yet. Talk to me about what you guys are aiming for there.
DP: So, like any business, you evolve and I agree that what you said Rena is, we have this, you know majority of the pharmaceutical companies and majority of the cannabis companies seem to be made up of men that are somewhere between 40 and 75 years old that a lot of them have probably never seen the plant before. Maybe they haven’t seen it yet.
And you know, we wanted to be a different company, my partner myself also we wanted to be, we wanted to be white, we wanted to be black, we want to be female, we wanted to be Asian, we wanted you know, we wanted to focus on that, when we design products not everyone’s basic [skin pigment], the – you need different APIs in there, depending on your color of skin and these sort of things. Depending on your age, and we – so we made a point that we would have this, you know diverse view of the industry and trade from the very beginning.
And I was very fortunate that early on Pholoso introduced me to a lady out of Cape Town that had a strong pharmaceutical background, but was very, very passionate about all women’s health about treating yourself naturally, and was very big in the community in Cape Town in helping other women. And we had dinner with her, and we offered her a job right then and there, and she’s – Donna Hewes, just did an amazing job in dragging us in this area of women’s health and I mean, all these sort of things we all know about already that women buy majority of the household goods, especially in Africa.
You know, women generally are the earner in the family. And we just and when it came from my own point-of-view and I know that women are generally they’ll pay whatever they have whatever they have for a good cosmetic. And things like, we were seeing all these discussions around men’s health and cannabis and nothing around the female health and cannabis and Donna just said let’s really think about this focus and she brought us some data and submitted some ideas and some energy and so we started building a women’s division and now we’re at the point now that I would say a majority of our company is probably slightly – what majority for sure is female, but on the management side majority of the company is probably female now. And on the board we have a couple of females that are very strong and driving us to certain way and I think that having this pivot and really focus there has actually really different just from a lot of people in the space.
RS: In terms of who’s driving the product?
DP: I think on the product – also on the product development side, I think that not everybody are looking at things to do with post mental syndrome or fetal alcohol syndrome, and cannabinoids. And I think that there’s a big sector of – there’s a master sector of the buying population that don’t have products that are developed specifically for them. And I think that’s where Donna and in Greece, and their teams have really started to, you know explain to us that this is a focus and if we get this right, we can own this area because it seems to be a secondary thought for most companies.
RS: So, talk to me about the research and the development that’s going into developing this.
DP: So, right now we have two clinical studies underway on female depositories. One is a lactose based depository with a cranberry extract. The second one is a depository with CBD for anti-inflammatory and pain management. And we’re already in protocol for a third trial with THC around pain management as well. It’s just a little more problematic right now because there’s no current legislation in Europe around THC as a pharmacopoeia. So, we’re just trying to figure out if we can do this study in Europe, or will we do this study in South Africa? So, and we expect to have at least two of the three products in the market in Q2 next year.
RS: That’s exciting and what is, if you don’t sell in Europe because of the THC requirement, what do you think the timeline is when that may be allowed?
DP: Well, it’s not so much about selling the part of it. The part for us is lining up the recent institute of the university to work with us that have the proper regulatory framework inside them to be able to handle THC and in Europe…
RS: Got you. In terms of the R&D side?
DP: Yeah on the R&D side so that they can actually run clinicals and they can run studies because most of them were not set up for a schedule on narcotic. So, we have to – it just takes – it’s a longer protocol to find the right university to do that with us or the right institute to do that with us.
RS: Got you. So within that you’re still aiming to release product in did you say Q2 next year?
DP: Q2 next year we should have CBD female suppository that CMA approved and we’ll have – prior to that we’ll actually have one without CBD that’s lactose and cranberry extract.
RS: And would you say most of the people on your team or in the company view cannabis as a medicine?
DP: I would say that everyone in the company views cannabis as a medicine. When we went out and – we went out and hired people that obviously were – obviously we were best-in-class, but we’re also like minded.
RS: And given like Medhel’s legacy, as you know, a European institution in the pharmacy industry, how much does that, I guess how much does the pharma drive the R&D side of cannabis or how much is, I guess kind of like how much are you innovating in terms of taking on former ways of doing things in the pharma industry and kind of pushing it forward in the cannabis industry?
DP: Well, I mean, the whole, the whole premise of buying Medhel for us was we had this facility in South Africa that we’d built the largest cannabis medical cannabis license in Africa. And we have a second license in the city where we’re focused on a certain cannabinoid. And we wanted to take the information that’s out there on cannabis now also develop some new cannabis products, or medicine products, and focus them on certain sectors of the industry in pharmaceuticals, like central vascular system, diabetes, pain management, and central nervous system. And what we would do is then we would use – we would have traditional pharma surgical products like [Fisher myosin] in these sectors that we would go out and continue to sell to doctors.
But as we were selling to doctors and promoting these products for what would they do and some of what most of them are very, very good products or all of them are, but also to educate them that there is an alternative product out there that either we have or is in development that we want them to think about natural medicine and natural medicine didn’t have to specifically be cannabinoid based, but most of it is what we’re doing, but they could replace what you’re doing, say with a Prozac where we could say listen, there’s studies out there that show that CBD is a very good replacement for your central nervous system. It cannot be received, it can help with anxiety. With this dosage, it’s something that your patient might want to try rather than using traditional pharmaceuticals. Here’s the data behind it.
Now, what we’ve done slightly different, obviously that’s completely different on the space. But the other thing is, we started to introduce other botanicals from some of the geo markets we’re in that will complement what CBD is doing, something like a Sceletium, which is known to really help your central nervous system. We found that with CBD it acts very quickly Sceletium as the CBD takes a little bit longer, so the two of them together will give you a nice balance on dealing with anxiety or helping you sleep, and introducing doctors to these sort of adapters and products that we’ve developed. And this is a premise of what we wanted to do. So because of that, we had to make sure that we hired the right people, from top to bottom from R&D to production, to senior management to the sales team that they all believe that there were cannabinoid treatments that could replace traditional medicines, but also, they still believe that it’s, at least at this point in the research cycle of cannabis, it couldn’t be 100%, maybe it could be 30% or 40% or 50%.
We’re going to – we obviously want to strive to 100% replacement, but there is a way to complement these together or for the doctors to think about something different, rather prescribing the same thing over and over again that add certain side effects. Think about an alternative treatment. And this is the how we try to get our staff to buy into this direction that it’s not, it’s not a black and white, either you’re a pharma or your cannabis. Now there’s, a way to pull doctors to our side of the argument. And a lot of that is educating the doctors and in your case the patients and treating the regulator’s and educating pharmacists that they don’t have to prescribe a pharmaceutical product right away. They can think of an alternative treatment before they go to what might be a more drastic move. And that’s – so the question I guess was, is everyone 100% if you bought in and actually the answer is 100% yes.
RS: And you know, do you feel like the fact that you are talking to doctors and regulators and talking to them about the effects and the power of cannabinoids and working in conjunction with other items? Does it help the fact that you have, you know, that pharma kind of background to draw on, not you specifically, but the company? Or do you feel like that the education and the science that you have that you’re bringing to the table kind of speaks for itself?
DP: No, I mean, I think we’d be naive to think that you can pick up the phone and unfold a doctor and get a meeting. So, I think that if we were and then we saw it already. I mean, as a cannabis company, I had very difficult time talking to research institutes or universities like Stellenbosch other than seeing their Ag department, but they’re – they are made for Health Department or Cape Town, or they as a cannabis company, they were – they put you in one group.
As a pharmaceutical company, then there’s – with a legacy of you have a, obviously an added credibility where the doctor will actually pick up the phone and listen to you. And I think that, you know, once you have somebody talking about different ideas, then you can introduce new ideas. And I think that that’s helped us. Obviously, the COVID situation has made it more difficult because the doctors are focused on COVID health and the regulators as well, but I think once we come to more normal world, I think that the model that we’ve developed in introducing cannabis to doctors in this manner will continue to be successful.
RS: That’s interesting. So talk to me a little bit first about the genetics of the cannabis that you’re working on. Are you developing that, I mean, you say that you’re working to partner with institutions, but are you so far developing those genetics in house?
DP: Yeah. So, right now in Cape Town, we’re growing about 11 different strains where we have a joint venture with University of Stellenbosch in South Africa, on developing or working with them on other land restrains that are unique to Africa. And in the lab in Cape Town, we’re doing some crossbreeding as well. I mean, the thing about a plant that I wasn’t, I really wasn’t aware of this until five or six years ago is, if you take a seed from sea level and move it to 2000 meters that seed is not going to work the same way or produce the same way does at sea level. It takes a period of time for plants to adapt to different humidity, different micromoles different elevation. So, there is a lot of science around run agriculture, and so we’re starting to use the resources we have and the access to some really good traditional cannabis farmers around Africa in building quite a good seed bank of land raised products from Africa. And then we’re doing a similar – we’re building a similar seed bank right now also in Thailand with our partners there, just because we’re, you know, we’re looking for a different type of plant there. It’s more of an outdoor grow.
So it’s – but we’re also, it’s not easy to move a plant from an area Cape Town into an area like Northern Thailand because of the way that the plant reacts it will take two or three generations for that plant to start, you know pretty similar to what you want. What you want to find in another location, if it pleases that way at all.
RS: So, how did you decide on Thailand specifically?
DP: On Thailand, in Asia, it’s the most progressive of all the countries in pushing cannabis. We were in China in January looking at a joint venture there and with everything that’s happening with China we decided that we’d focus more on Thailand just because it was sort of a, we were – we couldn’t take on both for management time. And some of these – some of the really interesting things about Thailand are, and there is – I think it’s the only country in the world that actually has a cannabis mascot that’s being promoted by a government.
RS: What is that? What do you mean by that?
DP: It’s – well it’s name is Mr. Ganja. I’m not sure why they said, Mr. and not Mrs. Ganja, but – and or maybe – and it looks like a very big cannabis leaf with a person’s face in the middle of it walking around.
RS: That’s great. That’s great.
DP: Yeah, exactly. But I met Mr. Ganja in Thailand. People, kids were going up and getting photos with them, you know senior politicians as well. So, yeah, they’re really promoting the medical side of cannabis. Nearly every university in Thailand has some research project or something or looking to do research project with it. So, and it’s also like South Africa, they’ve had cannabis as traditional treatments, you know for thousands of years in Southeast Asia. And from the other reason we like Thailand is, Thailand gets about 35 million tourists a year. And we think that Thailand have a goal. I think the number is to have one 1 million medical tourists per year and they want cannabis to be part of this treatment.
So, we couldn’t really be in a better place for R&D. We couldn’t be in a better place for government support. And we also, we made a decision there that we wanted to focus on women’s health. So, our entire company is female, our senior management is completely female. Our CEO is female. Our scientists are female. And they’ve actually so over performed for us during COVID that I would wonder if we didn’t have COVID what they would have done in the last four months. The supply chain was really disrupted in April and May of this year out of China.
So, it seems that there’s only a couple places in the world that make lotion pumps, and there’s a factory in Italy. There was a factory in Brazil and remember factories in China, making these certain type of lotion pumps. And because of Italy was shutdown, Brazil also shutdown, and China logistically also shutdown, we – our team in Thailand, actually the girls went out and they rented a truck for the day. They drove from factory to factory, trying to find these lotion pumps for us, jumped on a plane, so we can continue our production in Greece. And this was completely out of the scope of work that we’ve asked them to do. They just wanted to find a way to help out.
In the meantime, they’re developing their own products. They’re working with our scientists in Greece on how to ramp up and mixes and from scratch when we started the project with them about four months ago they – actually it’s tomorrow, they’re at their first trade show and I think they’ve already sold out their first production run. And yeah, no it’s just the – how they just went from A to Z in four months was just so impressive. And they’re having fun doing it.
RS: Well, if you believe in what you’re doing, it’s amazing. It’s amazing what you’ll do.
DP: Yeah, no, absolutely. But it’s just you talk to them every time on the phone, they’re happy with what they’re doing. They’re so proud of their products. They’re so proud of all the other local products to mix with CBD, because they come from their part of Thailand. Things like black rice extract, and things that we’re extracting besides CBD, and blending into skincare products. And they’re – I think every day I phone them, it’s a different video call and they have something else different on their face and they trying out. So…
RS: That’s really cool. That’s really cool to be discovering things. I mean, I imagine that’s super encouraging and propels people to keep doing it. You know, it’s funny, we had a grower on a couple months ago, and he was talking about traveling to different countries around the world and gaining, you know, kind of like sharing knowledge on best growing tips. But it’s interesting what you’ve said in terms of like, calling from different cultures and locales in terms of not just best growing practices, but best things that complement cannabinoids and what they can be paired with. That’s really a whole thing that I haven’t even heard anybody talk about, honestly.
DP: Yeah, no. I, it just makes sense. I mean, that, I mean this comes back to someone described it that, you know for millions of years we’ve walked through the forest and eaten cannabinoids and the flower and endocannabinoid system is built-up that way, and it’s – our receptors work a certain way because we have this endocannabinoid system basically through our DNA. But it’s the same thing as if we had the same thing with Sage or propolis or these sort of things as well. So, I mean, we believe that there’s natural medicines that we can blend with CBD or with THC or combination of the two, to make adaptogens to make what we’re doing better. And it might be instead of Sceletium with CBD, or it might be a [Mastiha from Chios] with CBD or it might be propolis that we can use that too, it seems to be very good skin restoration. But your body never recovers until your anti-inflammatory system kicks in where CBD is excellent for it.
So there, there is a way to incorporate these things together and to go with a better product. And that’s really what our focus has been on our cosmetic side and also on the female health side.
RS: And your R&D and your scientists, where are they – what disciplines and what fields are they coming from?
DP: In Thailand, we’re from the cosmetic side and the natural health side chemists. In Greece, we have a number of different scientists also from the cosmetic and the adaptogen side. We have about 15 different adaptogens that are non-CBD, and about five that are with CBD that are, you know really interesting. And we’re continuing on research of adaptogen, like you said, a mixing CBD with other products to come up with different outcomes.
And then in South Africa, we have a number of – it’s mainly on the growth size, but we’ve incorporated a number of different local doctors with what they would call sangomas and then have different local products that you would see in the Eastern Cape or the Peru that might be like a Hoodia or a Sceletium or a Polygonum that they’ve used for millions of years or thousands of years as a cough suppressant or cough syrup or as a way of calming your body down or getting your energy up like a Moringa. And so, we started to work with some of these local [with doctors] in a sense with what they’re doing and then test their products or those natural ingredients with cannabinoids and seeing if we can improve the outcome either as a skincare product or as a medicine or natural medicine or a food supplement. And so, we made a made a real point of not just being strictly focused on doing something like cannabis, but doing something on plants that naturally go around cannabis.
RS: You know, it’s conversations like these that make me feel like I’m consistently feeling like their projections for growth are underestimated even the most bullish projections and hearing you talk, I mean, it’s not just focused, efficient, high quality targeted cannabis that we have to look forward to and that we’re already experiencing in some locations, but this notion of further and further developing cannabis to complement and work with other natural elements. It’s so interesting. I mean, the runway is just huge.
DP: Well, yeah, I mean, absolutely. I think that – from the natural health space side of it, it’s so massive that in the amount of supplements everybody takes, but if we can make them better with CBD and make your life easier, even it is just a little thing that, I mean, I kept asking, I’m probably not – I probably could not guess, because they’re sort of all over the place here, but I kept asking my team, why can’t we develop a one a day product that every single day, I’m going to take a certain amount of CBD just for my anti-inflammatory system with my vitamin C and my D and my B and those sort of things, like why can’t we have a simple little product like that that everyone, it’s not expensive, that it’s not going to fix everything, but it even just helps lower my inflammation every single day, where I can take one in the morning and one at night and a little easier to get up in the morning, just when you’re about 50. I think that – just the base of that part of the plan is such a massive part of the industry that we could grow into.
RS: Yeah, really interesting. I wanted to follow up what you said about Thailand wanting to become like a tourist destination for medical cannabis. Is that what you said? Is that right?
DP: So, Thailand have, prior to COVID, the government put out a policy that they wanted to have in excess of 1 million medical tourists per year come to Thailand. So, I mean, you’re seeing it already. I’m sure. I’m not sure about Israel, but I’ve seen it from other countries in the Middle East, from other countries, even from North America, where you’re getting people will go to Thailand on holidays and get their dental work done. Or they might go on holidays and get some stem cell work done from North America because the price might be a root canal might cost you $1,500 in Los Angeles and cost you $350 in Thailand. And so you already seen this movement of people, price conscious. And then other jurisdictions where maybe the medical regime is not as good either a Russia or, you know, some places in Southeast Asia some places in the Middle East or North Africa where the quality of medical care is not as high. The Thai quality of medical care is extremely high. So, you have people going there as a preference for safety together work being done there and so they’re trying, they want this to be a big part of their economy moving forward, and they want to have cannabinoid treatments as part of this as well. So, I don’t know if it’s going to be what percentage of these million will be – have some sort of access to medical cannabis. I mean, but I’ll give you one example. One of the things that we’re in discussions with is a university in Northern Europe is, they’ve asked us if we could develop a sublingual patch, or, yeah, sort of a sublingual patch that they can give to their patients to take each night, one week prior to dental surgery.
DP: And this patch will have – it will have a high dose of CBD because they think that if they can give CBD in high doses to a dental before you get a root canal or before you get a extraction that the inflammation will be much lower and the recovery will be much quicker, and you’ll need less opioids during recovery and less side effects. I mean, all those sort of things.
DP: So, if you – if that becomes a common practice in dental industry, you just imagine this is a sector that under the cannabis space has not looked at it at all. But there’s people out there thinking about it. I mean, this wasn’t my idea. This was a – this was a dental hospital University Hospital in Northern Europe that we met with and asked us to work with him on this.
RS: Yes, so exciting to think about. I mean, the disruption in terms of, yeah, the need for opioids and just more natural approach to things. It’s so exciting to think about. I just hope the regulators don’t mess it up too bad. Speaking of regulators and you know, talking about COVID and how it’s affecting things and we were talking before, we started recording about you know, even flying these days, it’s like, between ordering your ticket and getting to the airport, there could be a million changes and given all of that, and you know, you guys are looking to get your to get your product to market next year. What do you see in the industry within this context? In the next year, and then kind of like thereafter? How much do you think this sets the industry back? Or do you think the people that are pivoting – and just as you say, the people whose employees are hitting the ground and you know, making pivots along the way and innovating along the way and improvising? How much do you think all of these things affect things? And also, you know, obviously, how it affects capitalization and how many companies are going to be able to survive these uncertainties? I guess so, what do you see like in general, going forward?
DP: Yeah, it’s – I don’t really have a view on what’s happening in the U.S. or Canada so much. And I think that those two countries are so regionalized anyways. Obviously, you know, in California I think the numbers are, I’m sure everyone’s doing very well there right now on the cannabis side, and maybe Illinois and other states not so well. So, it’s hard for me to judge that. I think in Canada it’s the same way because even though it’s a federal policy, each region has adapted that policy to their own region. And that’s affected companies in different ways. From a European point of view, it’s very difficult right now because with Brexit, with novel foods, with the different jurisdictions sending different messages, for instance France is going to start the biggest cannabis study. I believe ever undertaken in January of 2021. And I think they’re going to start with somewhere with 3,000 and move it to eventually 30,000 patients, which is massive for inside – anywhere in the world.
They’ve also, last week moved their enforcement of cannabis away from the courts where now you’re just issued a ticket and you pay your ticket, you don’t have to go to court, you’re not arrested anymore. On the positive side, on the mixed message side, they’re saying that they want to treat CBD as a scheduled drug. So that’s the thing, like it’s really difficult as a company to look at these three different messages and interpret what’s going to happen, say in France in the next 12 months.
I think this whole world or everybody, I think anyone that’s even not in the industry feels like this whole world is going in one direction on, which is CBD will become a supplement like vitamin C and THC. It’s, I think people are treated differently than CBD. I mean, there will be complete separation. And I think it’s very hard for someone to give a counter argument to that statement there. Because I think that’s the momentum that’s going there. But what it gets there is a different story. But we, so…
RS: How many steps backward we need to take before that?
DP: What was that? Sorry.
RS: How many steps backward we need to take before we get there?
DP: Yeah, no, for sure. And yeah, it’s – but it is going, we are going in the positive direction even though it’s not as fast as some of us want to go, but from a medical research side of it, we’re starting to see more and more universities, more and more institutions, you know get behind studies like come up with this idea of this, you know, [buccal strip] for pre-dental surgery. There’s some really smart people that’s probably hadn’t really thought about CBD in this manner before and they’re starting to push more and more new ideas out there. Even we were having a discussion with a professor, University of Cape Town last week about you know, developing a treatment for fetal alcohol syndrome based on cannabinoids, which is so far off the radar that anybody that’s thinking about, but there’s also a lot of money in the beverage industry that are willing to spend on studies on fetal alcohol syndrome, but I don’t think they ever thought about cannabinoids as a treatment, they only thought about, you know traditional treatments out there or historical treatments out there that always had side effects.
So this is a – this was another really smart doctor out of Cape Town that said, have you guys thought about this? Because of the way your receptors work, this could be something that could really benefit and we hadn’t thought about it, but he had and we were going wow, that’s right. So, it’s really interesting.
RS: That is. That’s really interesting. So, you’re – when you’re bringing your products to market will you be selling across Europe, South Africa, Thailand or even broader?
DP: So, right now, we have – we own part of the medical distribution company in Malaysia as well. So, they’ll be selling into to Singapore and into Indonesia. We were working with a number of companies in Asia to do white labeling for them. And we have a group out of Hong Kong that’s looking for a line of main skincare products. They want us to white label for them, but they want to – they wanted to have it made in Europe under [UGMP]. So, we have a lot of different avenues for markets. One of the things we’re really focusing on right now is with some of these female products, is getting them into – getting them on a wider distribution in Africa. For instance our one product, the [lady balanced product], it promotes very good female health, but it’s good bacteria back into the female reproduction system and because of that, you have less chance of picking up HIV or STD.
And so, we started talking to non-government industries or organizations and asking them, is this something that they wouldn’t want to, you know, push through some of their medical clinics that we could have the additional benefit of not only the benefits of CBD or benefits of cranberry for urinary tract disease, but also to just promote better health and better bacteria. So, there’s less chance that you could pick up HIV or an STD, you’re not going to stop it, but you’re going to improve the likelihood of not getting it.
RS: Interesting. Did you say Singapore? I thought they were like super anti? Are you talking about CBD like cosmetic products only?
DP: So we make – currently we make a lot of products that have CBD in them. And we also make a lot of products that don’t have CBD in them. So, we were on both sides. So, and this is part of our strategy is, in a market like Singapore, we have some really unique products without CBD that we can start pushing through their distribution channels and sales channels, different metabolic health or hair health or men sexual health things like this, that the moment they pivot to allow CBD products our branding’s already in the market with an established product. So, we could put our CBD products right beside it and say, you know, here’s an additional benefit that not only is it going to help your metabolic health, but it’s going to make your anti-inflammatory issue – inflammation issues just disappear.
RS: Interesting. While really exciting things to think about, I think we’re hearing things that even in the exciting world of cannabis innovation, there are things that we’ve never heard on the show before. So, not at all, I would not judge yourself as a guest that’s been all over the place. I think you’re providing us a lot of interesting new pieces of knowledge. Anything else you want to leave listeners with before we go.
DP: Yeah, no, just thanks for having us. I, you know, I’m a big believer in cannabis as a medicine. I think that’s the one differentiator that Cannsun Medhel is, we’re, you know 100% focused on medicinal cannabis. But we’re also 100% focused on trying to optimize, you know, the human experience. So, it can be with cannabis, it can be without cannabis, it could be a product that it could be a one a day product or it could be something that you use for specific cases, but maybe for during dental surgery, but we think that the adaptation of cannabinoids into the space. We’ve only sort of, only the tip of the iceberg so far.
And, you know, we’re focused outside of North America where we think that maybe a disadvantage for us because North America is so focused right now on recreational that they’ve left the medical behind a bit. And I think that, you know, Israel, Europe, Thailand, and even South Africa, I think we’re seeing from an institutional and from a government point-of-view that they’re very happy to push the window push the envelope on medical cannabis. And I think that these sort of innovations are just going to benefit everybody, including our shareholders.
RS: Yeah, yeah. I think that’s right what you said, you know, focus and I think it’s also true about why I haven’t heard a lot of this is because, you know, the United States and Canada is so entrenched in THC as a recreational, you know, product more so than medicinal. I think that’s right. And I think in Europe and a lot of these other countries, the recreational thing is completely not there, but the medicinal is being driven and driven way further. Yeah, really interesting to hear about that, and also like, it’s nice to see them match up at some point, you know, there’s so much innovation being done.
It’s great to see I mean, if we believe that cannabis is a medicine above all else, you know, I think even people that take it recreationally wouldn’t. That may not define it as a medicine for themselves. You know, I think it’s interesting to see all the different ways that we can take it and things that we’re not even thinking about right now. You know, so much just talked about anxiety and the general, you know, kind of reasons for taking it recreationally. But there’s a bunch of other reasons that you can be taking it and helping yourself. I love what you said optimizing the human experience. That’s a great way of putting it.
Yeah, super interesting. Do you see kind of those countries that you’re in now? Do you think eventually it becomes something that’s decriminalized or do you see that as kind of a slow roll and right now just focusing on the medical side of things?
DP: Well, I mean, if it had, I mean, definitely decriminalization is pretty wide. I mean, so do I see it – I guess the question is, do I see it? That it looks like Canada where it’s, yeah, I don’t really even know. I mean, yeah, I’m sorry. You know, I don’t – it’s a difficult question because there’s so many different jurisdictions that have their own version of decriminalization.
RS: Right. Well, let me ask you within that, what about like the, you know, cross border when it does open up a little bit like, do you think that it stays for a while, each country has its own unique set of rules and working around that and not for some time? Is there the notion of open borders in terms of transporting cannabis?
DP: On a personal point of view, I’m sure of a person moving from one jurisdiction, which outside of the Europe into other jurisdictions, I think that those will be in place for a long time. No, absolutely. I don’t think that will change. I think that – I think some of the jurisdictions in Europe will move quicker to recreational. I mean, I guess in a sense, I think Portugal basically is decriminalized now, isn’t it?
DP: And, but even in Canada, I don’t know. I mean, I would say that Cape Town’s also decriminalized, Cape Province from the rest of South Africa in a sense that they, if you’re a recreational user, really you’ll just get a ticket or they won’t bother with you, same in France now. But, you know, in Canada, if you’re growing a plant, you still – you’re not – I think your allowed to grow four plants, if you grow five plants, then you’re outside the law. So, yeah, I mean, I don’t know if we will ever have this one consistent policy on where medical cannabis or cannabis will be. And, you know, I, that will never happen there’s too much – the government’s are too different. There’s too many strong lobbies inside the pharmaceutical industry to allow that in my mind, and I think that the perfect example is alcohol. Your neighbor of Saudi Arabia treats alcohol differently than Jordan does, that treats differently than Israel does. And yet it’s this very generic product that is almost available globally and does much more harm than cannabis.
RS: Right. It’s interesting. I was just as speaking of that, I was just in a mixed Muslim Christian, Arab community and like if you go into a community like that, then their take on alcohol is different than even within the Muslim side of things. It’s different than if you’re in a strictly Muslim community, obviously. But yeah, there’s so many shades of grey I think even in things that look black and white from the outside. I think what you’re saying is dead on.
DP: No, I mean, I look at – I don’t know about Palestine, but Jordan, to hold the license to sell alcohol you have to be a Christian. But to buy alcohol, you can be anything. So, it’s treating as – treating differently. I think, I mean, we’re going the right direction. I mean, as a company, certainly, but as in the industry, I think we’re going in the right direction. I think that this focus in North America on 25% or 20% THC, probably is slowing down the medical side of it because people are putting money into genetics on better lights and better genetics to grow a higher THC, which really benefits the recreational side and not focused on say where we have and trying to find the right genetic in the right area of the world to grow, where we’re going to get rather than 1%, we’re going to get a 5% of 6%. Because then we have to grow 6x less plants to get the same amount from the plants. And that’s going to benefit us in what we’re doing in our diabetes studies. I think that that’s a disconnect between North America and the rest of the world right now.
RS: Yeah. Do you think America changes or do you think the focus is just – the interest is just so widespread on the rec side, that that’s what’s going to develop there? Do you think it’s more regional?
DP: No, it will change. I mean, the universities and the innovation that comes out of the States is so high, I think that you’ll see it start as you know, some of these new studies come out of some really smart doctors in Israel, some really smart doctors in Germany, in the UK. I think the U.S. will start getting on it for sure. I think you’re going to see a lot of products coming of Thailand because every University in Thailand is now starting to back medical cannabis. And I think these things will – the U.S. will get pulled into it, but I guess this federal regulation side of it is, will have to get resolved at some point as well in the U.S.
Yeah, for it to happen and then I think that, you know, there’s a lot of unresolved issues also, you know, in the U.S. around incarcerating people for having cannabis. You know, even Southern California I think and it’s been legal there for a number of years. And just, yeah, there’s a whole lot of healing has to happen so, around that.
RS: That is definitely the right word. A lot of healing, a lot of rights need to be wronged, and a lot of healing definitely. Well, we started this conversation even before we started recording with the regulations and the frustrations that we have. I feel like we’re kind of gone full circle. David, this has been a really interesting conversation. I want to talk to you again down the line and see where Cannsun is at, but super interesting hearing from you today. And thanks for taking the time.
DP: Thank you as well. I hope at least we created some new ideas for you guys in this to think about and anybody who listens, we love collaboration, we love new ideas, we’re open. So, if anyone’s out there that’s listening, I appreciate the introduction.
RS: And how can they find you?
DS: cannsun.com, all our contacts are on there, my e-mail is easy [email protected] Generally I’m based in Europe, but right now I’m sitting in sunny Gibsons, British Columbia waiting out the pandemic. And we’re happy to always talk to people and new ideas and we have a lot of products coming online, cannabis and non-cannabis products. And we’d love to, you know, create some more avenues for sales and introduce more people to a unique way of looking at the plant we think.
RS: Awesome. So, David great talking to you and hope to talk to you soon when we are all in non-versions of lockdown, but doing our thing safely and healthy hope that’s happening next time we talk and until then, if it’s in British Columbia, stay safe over there and talk to you soon.