An hour before close on the Canadian markets, and there’s not one news release out from a medical marijuana company we’re tracking today. For a Monday, when companies like to throw good news out to start the week, this is an odd thing.
But the medical marijuana industry is in wait and see mode right now, with pretty much everyone waiting for Health Canada to approve another MMPR or two, while investors count down the days until companies like Bedrocan, Organigram, Aphria and the like debut on the markets.
Added to the weirdness, the Canadian Medical Association, otherwise known as ‘aging doctors looking for a nice quiet place to pad out their remaining years’, came out and broke with no tradition at all over the weekend by taking the stance that cannabis is harmful to you and we should all be scared of it
In an article headlined ‘Medical marijuana producers attempting to woo doctors’, the sawbones brigade made a point of deriding the marijuana industry for sending out lots of sales guys in shiny suits to persuade doctors to use cannabis treatments, something the creaking leather armchair dwellers consider abhorrent.
Funny thing: they don’t seem to have a problem with Oxycontin salesmen and Ritalin hawkers taking doctors on golfing holidays in return for referrals, but that’s ‘good drugs’ while CBD treatments that help toddlers stop chronic seizures will make you rape donkeys and be mean to your parents and spend Saturday nights drag racing hot rods on the freeways, all hepped up on goofballs. Apparently.
The doctors, and I use the term loosely as they have a history of putting out angry white man press releases denigrating grown up pursuits without actually checking the science first (see their drive to ban mixed martial arts several years ago because it looks rough on TV), were represented by CMA President Dr. Louis Hugo Francescutti, who was quoted as saying he’s “actually quite frightened” because the weedcos are ‘operating in the same way that pharmaceutical companies do.’
“They’ve got product they have to move. So they’ve hired the best advertising firms,” he said. “Now, they’ve got very professional, well-dressed men and women knocking on doctors’ offices.”
Note to weedcos: The CMA would apparently prefer it if you were less professional and under-dressed.
The article is actually very well researched and written, with lots of counter arguments from the companies involved, including Tweed and MedReleaf, and doctors who aren’t booking a seat in God’s waiting room just yet.
Which just makes it all the more ridiculous when Francescutti says the business has “got nothing to do with medicinal properties. It’s got everything to do with people wanting to smoke dope.”
If there’s a more ignorant stance to take on this issue, I’ve not yet seen it.
A cursory look on the Tilray website
(a private company that, for mine, leads the field in presentation, packaging and design) shows each medical marijuana offering with clear indications of the symptoms they assist with.
The Tweed website
(which still only has one strain available) breaks down every strain in terms of THC/CBD levels, symptoms the product aims to help reduce, as well as anecdotal reviews from patients using the product, and potential side effects.
Of course, some people will use the medical system to attempt to procure weed so they can go out and get duly legless motherless stoned, but a whole lot more people use the medical system to attempt to procure Oxycontin and Valium and Xanax and Ambien and Morphine and Percocet for the same reasons.
And Vicodin. And Dexedrine. And Adderall. And Pseudoephidrine.
And cough syrup.
Perhaps Francescutti has been getting high on his own supply, because he managed to conjure a scenario for the reporter that, really, comes right out of Reefer Madness central casting, and the resulting 'what if' scene couldn't be more paternalist if he talked about it while patting the woman in question on the backside.
Francescutti described a scenario with a male patient, 6-foot-2 and 250 pounds, approaching a “tiny, little female” doctor who had recently immigrated to the country.
“He says to you, ‘I want marijuana,’” said Francescutti. “Do you think you’d feel intimidated?”
He said he received a call from “a physician exactly like that,” who told him she was terrified. “She said, ‘Here’s this big man in my office threatening me that if I didn’t give marijuana to him there would be consequences,’” said Francescutti.
What a load of unmitigated crap. Has that same doctor dealt with large guys looking for Oxy? Has she dealt with large guys looking for Viagra for the weekend?
Presumably this 'tiny, little female' has had some training about how to dial 9/11, or how to say no, or how to check ID of new patients so anyone looking to lord over her can be reported to the authorities, but to read Francescutti's description, the poor little sparrow of a girl was monstered by a reefer-hungry viking.
At the end of the piece, the head doctor with no head for doctoring outlined his hope that Liberal Party leader Justin Trudeau would be elected so marijuana can be legalized, which he'd disagree with but put with because it would ‘take the problem out of doctor’s hands’, channeling the spirit of Don Rickles as he noted he would duly buy stock in chips and nachos.
This is the mental giant representing you, doctors. He should be opening at The Hamptons for Shecky Greene, or handing props to Carrot Top, not representing an industry that is at least marginally associated with science.
Look, I understand how a doctor with no training in the prescribing of medical marijuana would feel out of their depth dealing with a patient that needed it, or would feel skittish about a besuited guy rolling up in an Escalade asking him to refer patients to a specific company.
But that’s what the educational process is for and, under Health Canada rules, it’s the only ‘advertising’ medical marijuana companies are allowed to do. The authorities specifically want commercial weed growers to reach out to doctors because DOCTORS ARE THE PROFESSIONALS.
They're supposed to WANT to get educated on the latest treatments. They're supposed to make the effort to find out what will help a chronic patient (no pun intended) find a way to live without pain.
Doctors are uncomfortable hearing from a Tweed customer service guy? Try watching your kid have her sixth epileptic seizure of the day as every 'legitimate' medicine either fails to help or creates a litany of side effects. That's 'uncomfortable'.
Growers in Canada are not allowed to run Google ads. No flyers on your windshield. No TV spots. Just face to face discussions with doctors, showing them what the science out there says about the drug, and it’s then up to the highly trained medical professional to put that information in context. You know, without making Doritos wisecracks.
I know plenty of smart doctors. They’ll take on a new science happily and constructively, but those individuals don’t sit on the CMA board because, you know, they have patients to care for.
In response to Francescutti's bizarre characterization of MMJ patients as people out looking to just get stoned, the Canadian Medical Cannabis Industry Association (CMCIA) wrote a letter to the editor
that refuted Francescutti’s points.
Frankly, I didn’t think they should have dignified his comments, which read more like something you’d expect to see in the YouTube comment section, with a response. What he said was clearly dumb and no thinking person would take his words seriously.
But the association, which includes ABcann, MedReleaf, Bedrocan and Tweed reps, is looking to take a leadership role in the debate and took a soft-treading approach to their response, designed to find a middle ground rather than go to the mattresses. Fair enough.
Meanwhile, in the United States, laws are set to be challenged
to help provide increasing access to CBD based treatments (for Dr Francescutti: They’re treatments that don’t get you high but help with things like seizures, pain, and ailments like MS, epilepsy and Parkinsons – read a book, man), with an increasing number of children with chronic and life-threatening ailments finding relief and quality of life in treatments that, sadly, remain illegal in most places.
As you can see in the CNN video here
, one child went from 300 seizures a week to two per month using cannabidiol oil-based treatments.
Moving on to the 21st
century: Tilray’s private equity backers put out a ‘public company bad, private good
’ piece in the Globe and Mail on the weekend that basically lumped all public medical marijuana companies into the ‘too risky to invest in’ basket. This would be a ridiculous claim but looks decidedly less ridiculous when put next to the CMA’s ridiculous claims. Kind of like going to a club with someone fatter than you so you come across as more attractive.
The intent of the piece was pretty obvious – since a private equity-backed company gains little benefit from retail investors thinking it’s a good bet, the motivation for doing the piece appeared to be an effort to ensure its public competitors are squeezed for investor cash going forward.
Business 101: If you can’t bring money in for yourself, choke your competition.
If Tilray went public, I’d invest in it like a shot. I like how it’s doing business on the ecommerce side and I think it has the best chance of building a user-facing MMJ brand to date. It’s really
But such things are easy to replicate if you have the dough, and a lot of publicly listed (or soon to be listed) players are coming out of the gate with big war chests that can buy a lot of accelerated market penetration.
While Supreme Pharma looks to raise cash to push through the last barrier to production, a competitor planting seeds of doubt in the minds of potential investors is a canny trick. If it can keep a company with the stated intent of undercutting the competition on price from actually getting to the starting line, well played sir.
But it won’t. There’s too much money out there looking for a weed-based home and, while I think we’ll see an increasing number of mergers and acquisitions shortly, the shonkier bets have pretty much already revealed themselves to investors that spend more than five minutes researching before they buy.
SPEAKING OF MONEY:
I’m hearing from several companies on an off-the-record basis that they’re looking to make acquisitions sooner rather than later. Some of these are intended to secure supply for value-added products. Some are looking to vertically integrate, adding potential product lines. Some are looking to aggressively expand into the US market.
On the back of this, and because the offers have been coming in thick and fast to be associated with many of the companies I cover, I have made a strategic move of my own.
I mentioned it on Twitter last week, but I’ve formed a consulting partnership with Tegan Adams, former COO of Affinor Growers (CSE:C.AFI
, Stock Forum
), to help companies in the agri-pharma space lock down their legitimacy.
Tegan is a Masters of Agriculture grad from UBC who puts the ‘diligence’ in due diligence, and has an impressive background in turning pipe dream projects into real world agricultural operations with defined supply chains, export channels, government support and ‘nuts and bolts’ realization. When I learned she was moving into the consultancy world
, and subsequently convinced her to work with me going forward, I couldn’t believe my luck – she’s the operational Ying to my conceptual Yang.
My role in the partnership will be to strategize, fine tune the story, find the business in the business plan, and run that plan through the wringer until it’s tight enough to get behind. Hers will be to make the gears turn, do the research, get her hands plunged into some soil, identify partners, and remove risk on inherently risky projects.
The first company to engage this process will be making an announcement tomorrow regarding their engaging Tegan to kick the crap out of their business plan and projects before reconstructing same in an effort to help that company move forward cleanly and aggressively with a genuine concept worthy of investment. I’ll join in on that process if and when it has the seal of approval from Tegan, and we've talked to a couple of securities companies about their bringing finance to companies that have endured our litmus test.
We plan to be aggressive with the companies we consult for – we will not be telling investors to buy, sell or hold. We will help potential merger partners find each other, we will help future public listings figure out how to best launch on the market, and we will be practicing what I’ve long been preaching – that companies need to hold themselves to the highest standards of operational excellence, communication with shareholders, and long term legitimacy if they’re to merit your investment dollar.
That includes establishing a Plan B for what would follow an MMPR refusal, something only a handful of companies currently give much consideration and few are equipped to move on.
Yes, I will continue to call companies out for their shortcomings, even if they’re engaging us as contractors, same as I do with Stockhouse clients. Only difference is, now, we might be in a position to fix those shortcomings from the inside and tell you more of the story than we can usually see.
In the last week, we’ve met with half a dozen companies in the space that are eager to be tested. There’s most assuredly a demand for help in setting good companies aside from pretenders, and I’ve been yelling about that demand for some time so clearly it’s time to get my hands dirty.
What does this mean for you, the reader?
More of the same, with an emphasis on ‘more’. I will remain at Stockhouse, I’ll keep pumping out the medical marijuana update, I’ll still be at conferences and still barking about whatever raises my ire on Twitter, but now I'll be getting more access to what's under the covers. I know full well that my currency is legitimacy, and that people read this column because I call companies out, and that if I begin selling out the reader, the reader won’t return.
More of the same. No holds barred. Legitimacy must be earned.
The much maligned Satori Resources (TSX:V.BUD
, Stock Forum
) climbed today on rumour of upcoming news, as did phosphate partner Jourdan Resources (TSX:V.JOR
, Stock Forum
), on a day when most weedstock dropped. Both companies have been in a holding pattern for some time so news will likely be well received.
Prescient Mining and Matica Resources reversed their recent big upswings while Supreme Resources (CSE:C.SL
, Stock Forum
) maintained its elevated volume as it rolls through its 5-1 rollback. That company has been working through some DD on some Arizona-based projects
in the last week which we hope to hear more about soon.