Editors’ Note: This is the transcript version of the podcast we published last Wednesday with Barry Fishman. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below, if you need any clarification. We hope you enjoy!
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 out there is doing well, staying safe, staying healthy, maintaining their mental health as much as anything else. Really excited to have Barry Fishman on the show today. He’s the CEO at VIVO Cannabis (OTCQB:VVCIF), a mostly Canadian – it’s a Canadian cannabis company that also has business in parts of Europe and Australia, which we talk about in the interview.
You know, something we’ve talked about a bunch on the podcast is people’s views on the Canadian market. Some are quite bearish on it. Some people still bullish on it. Barry tells us why VIVO is maintaining their focus on Canada, Germany, and Australia and why they don’t want to get into the States right now, his thinking behind that.
Also, something we talk a lot about on the show is company’s path to profitability. Obviously, a few years ago when the industry was getting started in terms of the business development of the industry and investors getting into the industry, everybody was super excited about, you know, all of these sexy headlines and all of these deals and all of this money and capital pouring into the markets, but obviously, there were a lot of companies that were more focused on the more exciting parts and not as excited about corporate governance, more excited about producing super slick commercials not as excited about producing consistent quality, product and revenue.
So something Barry talks about, he’s coming to the cannabis industry from the pharma industry. He spent many years at Eli Lilly (NYSE:LLY) and at Teva (NYSE:TEVA). He talks about that also on the show and what that taught him about building a serious, responsible company, and having the proper procedures in place to have that high quality corporate governance and to lead a company to profitability. Obviously, with COVID, it puts a wrench in things we’ve seen a lot of companies, you know, retract their guidance for the year so many people don’t know, you know, everybody, nobody knows what’s happening right now, and hard to predict the numbers that are going to come out of this time period, but Barry talks about the consistent revenue growth at VIVO, and they’ve had a number of consecutive quarters of revenue growth and the importance of that as building a company towards profitability.
So, really interesting to get Barry’s take on that. He also talks about the necessity of debt. You know, debt isn’t just a four letter word. It just depends on what kind of debt you have something Barry gets into. And we also talk about M&A targets, how he – how VIVO has decided which companies to partner with, which companies they wanted under the VIVO umbrella. We talk about social equity component of the cannabis industry, the challenges that COVID is bringing. So, lots of really exciting stuff to get into. Happy for you guys to hear the conversation. Would love to hear your thoughts on it, would love to hear your thoughts on the podcast in general. Let’s keep building this community of investors and let’s keep growing our portfolios, growing our own bottom lines and doing good in the process.
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.
Barry, welcome to the Cannabis Investing Podcast. Really happy to have you on the show. Great for you to join us today.
Barry Fishman: Thank you, Rena. It’s a pleasure to be here with you.
RS: So, something I like to ask my guests at the outset is how they found themselves in the cannabis industry.
BF: Yeah, so that’s a great question. And I get a ton of people asking me that. I’m a long term pharmaceutical executive. As a matter of fact, I think we discussed before the call started that I ran Teva, Canada, which is a leading company in the generic pharma world. Before that I spent 17 years at Eli Lilly, a major product innovator and branded pharmaceutical company. And, you know, during my time at Teva, I really learned about you know, compliance and quality and the importance of focusing on patients and healthcare professionals. And when my – when I thought my time was up and I explored other options, I actually reached out to a number of well known companies and started my cannabis career with a company called Bedrocan. When they first licensed the name Bedrocan to Canada, and they were one of the first LPs.
So, I joined the board when they were a private company, and then became a board member when they became public and was involved in the combination between Tweed and Bedrocan, which became Canopy Growth Corporation in its very early days, and served on the Canopy Growth Corporation board for a while as well. And then after a while, after serving on boards and learning about the industry from a 30,000 foot level, I decided that it would be a great time to switch from an operational role in pharmaceuticals to an operational role in cannabis because it was a new industry with huge growth potential. And I thought that it would be a fantastic learning experience. And that’s where I met the people at ABcann, which became VIVO, very impressed with – as a niche player and decided to take a shot at running a licensed producer in Canada. And that was about three years ago, two-and-a-half, three years ago. So that’s sort of my start in cannabis.
RS: Nice. What did you learn from your experience on the various boards that you were on? I imagine there’s things that you took with you as kind of points of guidance and also points for you to know well, let’s not do it like they did it. You know, let’s learn our lessons.
BF: Yeah, yeah.
RS: Can you speak about what you took away from that experience?
BF: Yeah, the key takeaways in the early days of the cannabis business is a lot of companies were run by founder entrepreneurs, and there was not a huge emphasis on governance. And there was not a huge emphasis on having independent board directors that really provide valuable input to strategy. And one of the things that I really learned in the early days of serving on boards is, you know, those companies that have a sharp focus on a select few things, really makes the execution a lot more seamless. So, when I started at VIVO, one of the very first things that I did was brought the leadership team together, and we aligned on a very clear strategy of a handful of priorities. And then since you know, last two and a half years, we’ve been executing on that and we were really haven’t changed course.
You know, we essentially operate in three countries. We provide premium products and services. We pride ourselves on compliance and governance. So, you know that really was our strategy and our competitive edge right from the beginning. And I think some of the lessons that I learned is many of the cannabis companies did not have a sharp focus at the beginning. And a lot of them are trying to do that now with, you know, renewed boards and renewed leadership teams, and they’re saying, hey, we tried to do too much too fast. And that generally doesn’t work out for long-term success.
RS: Yeah, yeah, I definitely think we’re seeing that shake out now. Would you attribute the fact that when you started at VIVO, the decision to kind of acquire companies as opposed to develop your own growth was that based on developing your core competencies and then kind of acquiring companies that did it well that you could absorb into the VIVO umbrella?
BF: Yeah, you know when I started, we’re a very, very small company in a small town called Napanee, Ontario, which is just east of Toronto, and we needed to build scale. And with our strategy being focused on medical cannabis at the time, we looked for some M&A opportunities. And one of the criteria that we have in M&A are buying companies that are high performing companies with good teams, and generally profitable at the time we buy them. So, our two major acquisitions starting with harvest medicine, which is a network of medical cannabis clinics, had a sharp focus on patient care had, you know a really well established flagship clinic in Calgary, Alberta. And we were super impressed with the way the patient journey happened at Harvest Medicine.
We like the leadership team, and we took over the company to allow them to grow to the next level and post the Calgary clinic, we’ve expanded the four clinics in a very robust telehealth platform and that was a very strong acquisition provided us with great data. You know, one of the things you learn when you deal with patients is, what works and what doesn’t work. And what you also learn is sort of what’s happening in the marketplace. What are some of the new trends, what are the unmet needs? And so that was our first acquisition. And the second thing we did is, we realized that we needed a little bit more scale, and we also needed a flagship brand. And that’s why we bought Canna Farms. Canna Farms was a established brand in British Columbia grew really high quality premium product had a phenomenal team passionate about cannabis had well over 20,000 medical patients at the time with a very strong following and loyalty.
So, we did our homework. You know, I really pride ourselves and our team on really understanding how to do due diligence. You know, one of the things that I’ve learned in my career is, you need to do your homework before you commit to buying an organization. You need to find out what’s really behind the curtain. And do, you know a significant amount of work before you conclude a definitive agreement.
RS: I think that’s some good advice in general. I think that’s a good way that people should be approaching their knowledge gain. Talk to me a little bit about the scene in Canada right now, your vision for it going forward. You know, there was so much excitement about the legality happening in Canada and then people were super excited about Cannabis 2.0. And you know, a lot of people have been super disappointed, investors included. What do you think about Canada’s rollout? And what do you see kind of, I guess, within COVID, you know, what do you see for the next year or two in that region?
BF: Yeah. So, in the last five or six years since I’ve been involved in the cannabis business in Canada, there’s been huge evolution. At the beginning, people cared and investors cared about funded capacity. I don’t know if you remember that terminology was a, you know, this company has funded capacity of, you know, 1 million square feet or whatever happened to be, and a lot of companies valuations were dependent on, you know, how much funded capacity they had. Well, I think that that metric really has evolved into the companies that are solid now are those with strong balance sheets, a sharp focus on a few things, a competitive edge that is able to sort of help differentiate an organization from a very serious group of competitors. And then I guess at the end of the day, it’s all about business fundamentals.
It’s about managing your expenses and managing your inventory, and doing the right things to turn positive cash flow so that you could, you know, your business and self-fund growth into the future. And I think that’s the right way to look at businesses, growth businesses is those that focus on the fundamentals and have a very clear path to profitability. And, you know – and do their homework, like I said before they buy companies and carefully ensure that the companies that they buy fits squarely in their strategic focus. So, you know, it has been a huge change in what investors are looking for in Canadian based cannabis companies from what they looked at five or six years ago at the beginning of the cannabis boom time in Canada.
RS: Yeah, it’s something we talk a lot about on the podcast, you know the importance of doing your due diligence on companies and not kind of going with the sexy headlines or the deals announced, you know, really look at the balance sheet and the finances and the management team. And I feel like the good companies or when all the headlines are happening, there’s no headlines coming from those companies and then you kind of start looking into them. And you notice oh, there’s a reason why they’ve been quiet. They’re building something, you know. What do you think about the effects of the regulatory bodies in Canada? Are you a fan of what’s been happening there?
BF: Yeah, well, I think Health Canada has been on a learning curve, just like the entire industry has been on the learning curve. You know, at the beginning, there was no real Canada’s division that looked at licensing and product approvals and policies. And now they, you know, there’s a large team of people across Canada working for Health Canada, but most of them are relatively new to the cannabis business. It’s not like the pharma world where you have people that have been reviewing pharmaceutical submissions for 10 years or 15 or 20 years. And these people are learning just like we are. And I think, you know, there’s a very delicate balance between sort of supply and demand.
I think they’ve had a staff up recently. I think COVID has played a role most recently in the inability to do live inspections, which you know, which delays the approval process in certain situations even further than it had already been, but I think for the most part our relationship with Health Canada is very positive. You know, we’ve been around since 2014, you know, ABcann in Napanee and Canna Farms in Hope, were two of the first 15 licenses granted. So we were very early and we’ve been able to, you know, develop our profile at Health Canada and our relationships in Health Canada. And certainly, can they speed up the approval process? I think they will. And they can, it’s just I can’t imagine their workload. They’ve been flooded with hundreds and hundreds of applications and submissions.
So, you know, I don’t envy their situation, but I think that, you know, the people are, you know, the people that we have dealt with are all highly professional, and confident and open to sort of learn with us. We’ve been hosted tours in British Columbia for new Health Canada employees that wanted to tour around the cultivation facility that’s been operating for several years and learn a little bit about, you know, the processes, the standard operating procedures. And, you know, we’ve been a host site for several Health Canada employees, which really bodes well for our reputation with them. So, yeah, you know, for the most part, yeah, you know, I also think we pride ourselves on compliance and quality.
I think the bar should continue to raise in the industry, you know, as companies mature and they get better in quality and implement quality systems that are appropriate, you know, the standards in the cannabis business will be a little bit closer to the standards in the pharmaceutical business. I think that’s a good thing. You know, product traceability, product stability, you know, product delivery devices, you know, like sort of, you know, a little bit more pharmaceutical, like discipline wouldn’t be a bad thing. I think it would weed out a lot of companies that don’t have the resources or the competency to meet that new higher level of standards.
RS: And do you feel limited as a brand or as a suite of brands, with the packaging limitations in Canada?
BF: Yeah, you know, it’s been a challenge, certainly from a marketing perspective, that, you know, your labels and your package design has had significant limitations on your ability to really market in a creative way, you know, like they do in the U.S. and some other countries, but it is what it is. And so we’ve had to, you know, try to build brand awareness and visibility in the marketplace by other, you know mechanisms and actually word of mouth, you know and I think word of mouth works in most industries. It’s sort of a patient or a consumer has a good experience with a product and then they tell their friends and it expands and you know, that is one of the best ways to grow a business these days and you know, and social media sometimes takes over and, you know, helps companies with solid brands build their reputations.
RS: Yeah, I think at the end of the day, you know product is key and if you have a quality product, especially one if you’re talking about on the medicinal side if it’s targeted and effective and – but even on the [rec side], you know, if it’s effective for what the person is looking for, and it’s a quality they like, you know, I think you can never go wrong with that. Switching gears a little bit from Canada to Europe. You guys are – you’re waiting to hear about a couple licenses there. Is that right?
BF: Yes, we are very close to receiving our license for Phase V of our Hope facility, which is a, you know, a building that will incorporate some processing capabilities, additional vault storage, and some cultivation space as well. And, you know, we’re just awaiting. I think the ball is in Health Canada’s court. We believe we’ve dotted all the I’s and crossed all the T’s and, you know, hopefully very soon we’ll be able to start to utilize Phase V, and we’re excited about that.
RS: And that’s more on the medicinal side in Europe?
BF: Okay, so the Phase V and Hope, British Columbia is mostly, it’s a combination of medical cannabis products, as well as 2.0 products for the adult use side of our business and some cultivation capability. I think maybe what you were referring to is we are also on the journey to getting GMP certification in our Napanee, Ontario facility. And we’re working with the regulatory authorities in Germany to pass the finish line. So we’re very excited about that. You know, unfortunately, as I mentioned before COVID-19 has put a little bit of a wrinkle in the plans because I don’t think anyone is flying over from the German regulators who visit Canadian facilities. And we’re trying to figure out alternative ways to satisfy their needs that we have closed all the gaps.
RS: And what do you envision in terms of COVID affecting plans, not just in terms of regulators coming, but also you know, what that means? Does that affect like, once the deal is signed, does it affect when experts can go out? And also, if you could speak a little bit to the picture in Europe and internationally, like Europe’s another place where I think a lot of people were excited about the growth prospects and then a little disappointed at how it was actually rolled out? I know a lot of people still believe in that. In that growth picture there; A, I guess, how much does COVID affect those things? And what’s your take on it in general over the next few years?
BF: Got it. So, Rena I’ll start with the first part of the question, which is sort of, you know, how has COVID impacted our Canadian domestic operations? And I guess I’ll put it into two segments. Number one is, we have a lot of frontline employees that actually work in our plants and wear, you know, protective equipment and practice physical distancing. And we’ve been really pleased with their dedication to going to work every day as an essential worker. And our output has been maybe not 100% of what we planned pre-COVID, but probably close to 90% of what we planned pre-COVID.
You know, there are occasional employees that, you know, cannot come into work because of family responsibilities or elderly parents or children that they need to take care of, but we’re very happy with the frontline employees dedication to getting product out the door, quality product out the door, and I think we’ve been, you know, super successful in maintaining, you know, motivation and output in our facilities. You know, we’ve, you know, the other big thing that’s happened with COVID is a lot of business has moved from sort of live person to person contact to, you know, internet based solutions.
So, a lot of the business now that used to happen in retail stores is happening sort of by online vehicles as well, even our medical for facilities have had to shut down. And all of our patients now are using a [tele medicine] platform to have their, you know, their refills and initial visits with healthcare professionals. So, you know, and the other thing is, you know, when people go on the internet they have different views of what products they select, you know, a lot of times premium products, which is the part of the market that we participate in. A lot of times that is really beneficial when someone walks into a store, talks to a budtender and the budtender directs them to the highest quality products available, and maybe even some products that they’ve had personal experience with.
Right now there’s very limited budtender in the, you know, dry flower premium sector, there’s been a huge increase in the value sector, and we’ve most recently introduced the value brand to compete in that market segment called Canadian Bud Collection, which is a lower price, but high quality product from the VIVO family of brands because we felt that, you know, missing that segment was just not a great business decision. So, we reacted quickly built the brand and implemented over the last little while. So, you know, COVID, you know, it’s sort of, it is what it is, and we’re trying to adapt the organization to compete as effectively as we can. Because I don’t think you know, COVID-19 is completely going away anytime soon. So, we need to learn how to compete in sort of the new reality of business.
RS: And then regarding Europe, your vision there.
BF: Yeah, yeah, good point. We are squarely focused in Europe having Germany as our sort of jumping off point. So, we have a small team just outside of Berlin. They are working through both on the regulatory aspects of being successful in Germany and also the commercial aspects of being successful in Germany. We have in our plans to start selling a product with, you know, appropriate GMP certification facilities, and an acceptable stability in the German market before the end of this year. And we’re – we have two options for supply, one being Ontario, Canada, and the second one being Linneo Health, which is a Spanish, Southern Spain based GMP certified cultivator of high quality cannabis, which is a partner of ours. So we’re looking either bringing Linneo product into Germany, or ABcann medicinal product into Germany, or both.
So, we’re sort of hedged our bets and working on both of those scenarios. And we’re excited to start selling in Germany because we think we’ve prepared the market. Our brand in Germany is called Beacon Medical, which is our global medical brand. And we’re even using that in Australia. So, we’re also trying to build a global medical brand, which is very professional, which will have new innovative products, we call them cannabis 3.0 products in the future, which will be more pharmaceutical like using precise dosing as one of the advantages and we hope to launch new novel medical cannabis products over the next 6 to 12 months, and we hope that the market will say, boy, that is innovation and that we are very excited to move from some alternative formats to the new Beacon Medical format.
So, you know, we deal with a number of pharmaceutical companies, mostly in North America to be our product development partners. And we provide the cannabis knowledge. They provide the formulation, expertise. And together we’ll commercialize products for the medical cannabis markets globally.
RS: And in terms of, I wanted to talk a little bit about the listing, you know, the necessity right now, I guess, to be on the OTC markets in the States. I know you guys up listed to the TSX in January, I believe. Talk to me about, are you frustrated by the index in the States or do you see it as a matter of you know, kind of paying the dues until you’re able to get up listed? Or are you thinking about that at all?
BF: Yeah. So, we up listed to the TSX so that we could tap into some more institutional investors, and that it raises our profile from being on a TSX Venture Exchange, the TSX Venture Exchange. We are also not active in the U.S. I don’t believe we have a significant amount of U.S. investors. We contemplated listing on some U.S. Exchanges, but I think the time is not right. Right now we are focused only on growing our Canadian business. We’re focusing on building a platform in Germany that will eventually expand to across the – across Europe. And we are from an Asia Pacific point of view, building our network and actually selling product in Australia, because we think that that’s one of the best markets outside of Europe and North America to be in.
So you know, the U.S. situation, you know, it’s one of these things that a while back, we said, if we focus on a select few things, we could do them really well. And the U.S. market is a huge nut to crack with, you know, complex regulations and intense competition, super intense competition. So, we would rather play in a market that has less competition, we could differentiate ourselves, we could build a brand, and then we’ll determine whether or not we, or when we eventually move into the U.S. market.
RS: So that’s mostly based on where you stand as a company as opposed to where the market is going. Like, if the USD schedules cannabis and it becomes legal does that push your trajectory forward in terms of wanting to uplift or your focus more on the company’s status?
BF: Yeah, yeah, I think if the U.S. becomes similar to Canada in that, you know, the regulations are a little bit less complex state-by-state, we will have to look at that market, but we will probably determine where best we can play and where can we provide some kind of competitive edge. So, you know, I guess in my opinion, I don’t think that that will happen in 2020. That’s sort of a 2021 and beyond strategy for us. And right now, 2020 is focused on three countries, accelerating the path to profitability, rolling our sales, containing our expenses, containing our capital expenses, because we believe we are sufficiently prepared with, you know, an appropriate amount of cultivation space, and also a number of supply partners that are third parties that meet our quality and product specifications that we don’t believe there’s an urgent need to build new larger cultivations capabilities at this point in Canada, or Europe, as a matter of fact.
RS: Before we get more into the financials, because I want to talk to you about that also, but just what you mentioned about that you’re most excited about Australia. I’m curious why you see it as one of the more exciting regions.
BF: I think their patient growth in the last year or so has been substantial. I think Australia is also on the verge of opening up market access so that it’s easier for physicians and specialists to prescribe cannabis. So, in other words right now or last year, you know, the paperwork involved and the criteria was pretty tight and they are making it more Canadian like in the future. So that, you know, doctors will, you know, be more apt to put patients on medical cannabis. They also have a medical cannabis clinic model that’s similar to Canada. I don’t know if you know that, they’re building cannabis clinics across, you know, Australia, that they are focused on gaining knowledge of cannabis. And there are doctors working out of those facilities that, you know, for the most part, their entire practice is dealing with patients and when appropriate, providing the appropriate type and dosage of medical cannabis.
So, you know, I like the way they do business. I like their model. I think it’s, it’s a growth potential. And, you know, Australia does business very similar to the way you know, we do business in North America. So, it’s a very familiar market. And I have and some of the team members have experienced building other businesses and other markets in Australia and Europe so that we’re familiar with that territory.
RS: So, getting back to the financial picture, you know, you mentioned the path to profitability, obviously, you know, investors are really focused on that right now we discussed that you know, the capital crunch that’s been happening and then COVID hits, you know, the shakeout that is coming has come, will keep coming, I think for the near future. You guys aren’t profitable yet, but you know, you have increased revenue, I think, for the past number of quarters. Talk to me as, you know, the leader of the company, what you do to ensure you guys are on the path to profitability.
BF: Yeah, so we recorded 8.2 million in net revenue in the first quarter of this year, which is our fifth consecutive quarter of growth and something like 62% higher than the same period last year. So, we continue to grow our sales at a substantial rate, we continue to very closely manage our expense base. Our operating expenses are roughly the same this year as they were last year. And our sales are showing significant growth. We also have a healthy balance sheet. Last time we announced our financials, we – in cash and equivalents, not including some strategic investments, we had $35 million in cash. You know, we have significant patient base, we have strong predictability of our business. And, you know, and a high, very high average selling price of our products, roughly somewhere between $6.50 and $7, generally.
So, you know, we believe that, you know, we’re on the path to profitability because, you know, any company that continues to grow sales and contain capital expenses and operating expenses is on the right road to profitability. You know, we’re also not trying to tackle too much we’re looking at all, you know, non value added expenses, we consistently look at our operations to include, you know, a review of our productivity versus benchmarks. And we very carefully set very high standards. So that, you know, based on the headcount that we have, there are certain levels of productivity in our facilities that we need to ensure that our cost structure is appropriate. And so, we believe that, you know, over the next few quarters, we’ll continue to show investors that we are on the road to profitability we had originally targeted to turn the corner this year.
We’ll see how that goes with. You know how COVID-19 shakes out on the retail marketplace. You know, we had certain market projections in January of this year when we put our plan together that was based on a certain growth rate pre-COVID and we’re very carefully looking at that to see if, you know if the market needs to be adjusted, but we’re very pleased, we’re very pleased with our Cannabis 2.0 products. They’ve had phenomenal reviews, our vapes, our bubble hash, our chocolates, which are super premium chocolates. You know, our Cannabis 2.0 rollout has been great. You look on the Ontario cannabis report that was issued today or yesterday, we are number one market share in extracts with over 50% of the marketplace in Ontario. And that’s the most recent report that I’ve seen, and we were very pleased to see that.
RS: I also wanted to talk about, you know, something that we’ve also talked about a bunch on the podcast is company’s debt situations and the trouble that gets them into in terms of, I guess, onerous, you know, liabilities and the structuring of the debt and how that comes back to bite them. Talk to me about the debt in the company and what your goal was in terms of setting it up how you’ve set it up?
BF: Yeah, so perhaps you’re referring the debt we have on our balance sheet is convertible debentures, and it was it was done quite a while ago in a very hot cannabis market. We have due dates on those convertible debentures over the next few months. We’re currently looking at, you know how best to handle those, and probably a little bit premature for me to comment on our exact plans, but we believe we’re well-positioned to handle our business growth going forward. And, you know, we, you know, we’re kind of looking at both basically, as we go forward a combination of having some debt on our balance sheet.
We believe that that’s a prudent way to run a business, and we are probably going to either, you know, look at how we could handle the convertible debentures or get into some new debt instruments in the future so that we could continue to have a healthy balance sheet and fund our growth going forward. But, you know, things change every, every week and every month and kind of depends on how markets are and the timeframe. You know, we still have plenty of time to determine, you know, how best to handle the convertible debentures, and we’re evaluating a number of options as we speak.
RS: Something I really liked that you talked about on the last call is you mentioned the importance of patient and consumer reviews for your products and how salient that spin towards furthering your growth. You know, also as the host of a podcast, I know how important reviews are to keeping your product going and getting people interested and keeping people engaged. It seems like that’s really a point of emphasis with VIVO, the connection with the consumer, but also kind of evidencing that as a point of differentiation. Would you agree with that as something? I mean, you’ve spoken a little bit about it today, but would you agree with that as kind of coming from the management level as something that you guys are focused on?
BF: Yeah, so Rena, I think there’s a philosophy at VIVO across the company that we want to be a fact based decision making company. So, when we – when I walk into cannabis stores and I talk to the manager, one of my first questions is, can you provide me with feedback on our brands? And can you provide me with feedback on our packaging? And is there anything that would be valuable for me to know so that we could shape our future in a way that’s more conducive to what patients need and what consumers need? And we do the same thing at Harvest Medicine or Canna Farms medical platform is, you know, we treat feedback as a learning experience. You know, we sort of, we take it very seriously.
A lot of times we get lots of positive feedback, but occasionally we get feedback from people saying, you know, why don’t you do this or why don’t you do this with your packaging, or, here’s what I found, and this was my experience. And we take that very seriously. And a lot of that feedback gets up to my level. And we talk about, you know, how could we deal with that. We don’t just take feedback, and you know, clap our hands with the positive feedback and ignore the negative feedback. We actually are very happy to get positive feedback, that’s great, but we, as a business, have a philosophy that if we get constructive feedback from budtenders, or patients or consumers, or you know, the people who own the retail stores, you know, let’s obviously you’ve got to, you got to address it, and you’ve got to probe and you’ve got to find out, you know, how can you turn that piece of negative feedback into perhaps a competitive advantage? And that’s what we’re doing with new product development.
We have these, these Cannabis 3.0 products that we’re developing. It’s because patients came into clinics and say, wouldn’t be nice if you had a product that did this. Or when I take my oils, I don’t really, I’m not clear on exactly how much I’m taking, because it’s an imprecise way to dose my medicine. And, you know, and also people that you know, smoke dry flower, it’s not as precise and people don’t exactly know how much they’re getting, like some of the format’s we’ll be introducing into the future. You know, it’s like a pharmaceutical product when you when you take 20 milligrams of a pharmaceutical product in a capsule format, you know, you’re getting 20 milligrams, you’re not getting 40 and you’re not getting three.
RS: I saw that Raphael Mechoulam is on your board, which I, coming from Israel, I always like to see his name because I feel like he was really, you know, one of the greatest legacies, I think in the cannabis industry, what he brought to the industry, obviously. Has he helped form a lot of the, I guess, medicinal, I’m trying to think of the right word, a lot of the medicinal things that you’re looking for in terms of that you’re looking to adhere to as a company? Is that a deliberate approach in terms of the efficacy side, the medicinal side of things?
BF: Yeah, so Professor Mechoulam has been on our Scientific Advisory Board for quite some time and it’s a paid position. And we have, you know, kind of norm like ongoing contact either through me or our Vice President of medical product development, and what we utilize Professor Mechoulam are, you know, we basically, you know, he’s under a confidentiality agreement. So, what we do is we talked to him about some of our Cannabis 3.0 product plans and get his feedback, and also try to pick his brain on saying, you know, what would you do if you were in our shoes and you had to fund a program to develop, you know, a couple of new novel medical cannabis products?
What would you put your money into? And we sort of, you know, have general discussions with Professor Mechoulam and he sort of provides some, you know, great feedback. And, you know, he’s also a great person. He’s super modest. And I’ve met him a couple of times. And, you know, he’s, he’s always he’s very passionate about medical cannabis, obviously, I think he’s dedicated a lot of his life towards it. And we’re privileged and honored to have him as part of our scientific advisory committee and being able to reach out to him and ask him questions. I think that’s fantastic. And we probably should, you know, make a little bit more of that, and you know, sort of talk about it a little bit more. So, I’m very glad that you asked me about it. It’s probably [indiscernible] because you’re in Israel. And you know, there is that Canada Israel connection. And yeah, we’re happy to have him and yeah, he’s done some great things, and he’s really helped us out.
RS: Was it difficult to get him on board? Did you have a connection with him? How did that relationship come about?
BF: Well, it was like the – I replaced the founder of ABcann Medicinals, Ken Clement and Ken had a relationship going back, I think five years ago, maybe six years ago. You know, he, I think he met Professor Mechoulam at one of the conferences, and you know, struck up a relationship and then we were one of the early movers in the medical cannabis business. You know, we obviously had a huge focus on quality, which, you know, not everybody did at the beginning. You know, we’ve never had a recall. We pride ourselves on, you know, if a product doesn’t meet a certain standard, it doesn’t go into the market. It just does not and you know, if we buy a product from an external party, and it doesn’t meet our products, specifications, we reject it even before we put the final labels on the product.
So, you know, I think Raphael Mechoulam sort of really appreciated our passion for product quality and consistency. And, you know, and I think he, you know, he just did, yeah, he’s been, he’s been great, but the relationship is long. It predates me, but I’m very happy to have inherited.
RS: Very cool. I guess I wanted to end with this. I don’t know how much Canada, you know, Canadian companies are affected like they are in the U.S. in terms of, you know, the civil rights, the pursuit for civil rights in America, but also not just that, but also the need to address I guess the social equity component of, you know, being in the cannabis industry. Coming into it, especially, I guess from the pharma side, what’s your vision there? As you know, a leader of the team, how do you, how do you address I guess, kind of the social equity side of things?
BF: Yeah, I think the events that’s happened in the U.S. are, you know, super unfortunate, but I guess on the positive side, it woke everybody up to a very serious issue. And as a company, you know, we have 250 employees around the globe, and we pride ourselves on having a very diverse workforce. You know, I think that we should do more to sort of send the message that some of the things that are happening in the U.S. that are causing concern are completely inappropriate, and we should use our social media vehicles and we are actually. I think even yesterday, we were reviewing some messaging that we were going to put on social media to say that, you know, VIVO supports equality, and, you know, is horrified by the events that have happened in the last little while.
And, you know, we’re very supportive of a diverse workforce and a diverse community. And, you know, I think overall the cannabis business needs to, you know, the industry needs to rise up to actually get on the bandwagon and state some of these key messages, you know, saying that we support equality, and that our hiring practices support equality, our workforce supports equality. And that’s kind of a non-negotiable in my mind and in the minds of I certainly hope every single one of our VIVO employees.
RS: Well said. Well, before we go, Barry, do you want to leave our listeners with anything?
BF: Yeah, I just, first of all, thanks Rena so much, been a pleasure talking to you. What key message I want to leave the audience is VIVO prides ourselves on being a company that cares about our people and cares about our products and does not compromise on quality. You know, that that is something I learned very early in my career is quality matters. And if you can’t put out a quality product, don’t put out a quality product. You know, so you know, that’s it, and I certainly would love to have further conversations with you. It’s been a pleasure. And one of these days, post-COVID I hope to meet you face to face. That would be great.
RS: I agree. Absolutely. Hopefully there you get out to Tel Aviv, I get out to Toronto. I would love to meet personally and really appreciate you coming on. I think listeners will be excited to hear from VIVO. You know, it’s a company that doesn’t get a lot of coverage in the States. So, I’m really happy to have you on and definitely look forward to continuing the conversation.
BF: Thanks so much and have a great day.
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