“The industry, at least as it evolves in different countries, needs to start to look at Canada, and I think a perfect place to start is the regulatory side... There wasn’t a roadmap for us to follow; we were the first G7 country to have legalized cannabis at the national or federal level, and I think that’s a significant milestone.”
“We’ve got a diverse set of talent across the country that is very specialized in understanding cannabis, and I think that’s what we’ll be exporting, quite frankly, is that know-how, that talent, that knowledge, on the international stage. While we may not be able to export a lot of physical product itself, outside of medical, I think we’ll be able to export that intel, that IP. And we’re seeing it…there’s tons of companies on the global stage coming here to be able to set up because we’ve created that atmosphere. So, I think we’ll see more of that IP, that talent, being exported out of Canada, because we’ve just been in it for so long and we understand it better than the global stage. And I think Canadians, generally, will be able to stop Europeans or Americans from making the same mistakes that were made in Canada, because we have the benefit of hindsight.”
– Deepak Anand
This week’s guest, Deepak Anand, was named a top cannabis industry player by the Financial Post, and deservedly so. He founded the Canadian National Medical Marijuana Association and has guided the development of medical cannabis regulations at all levels of government in Canada, taught courses on professional management of medical marijuana, and been a member of multiple business and non-profit boards in the sector.
Most recently, Deepak co-founded and now serves as the CEO of Materia Ventures, which aims to enable global access to medical cannabis by having best-in-class cannabis extraction, processing, and distribution—done to EU-GMP quality standards. Materia’s team brings their expertise in manufacturing, processing, extraction, regulation, import, distribution, and retail to operations across Europe.
In this episode, Deepak discusses his own career shift from pharmaceuticals to cannabis as well as attitudes toward medical cannabis, illicit markets, GMP production standards, and much more. A self-proclaimed expert traveler with expertise in the medical and adult-use regulatory environments around the world, Deepak brings global examples to his analysis of areas where Canada has set the roadmap, and other areas where the country needs to catch up.
[0:00] TEASER: How did Deepak get into cannabis? Distributing pharmaceuticals across Europe and North America gave him a unique insight into the regulatory environment. Ultimately, he was involved in shaping MMAR and subsequently MMPR regulations, and later the Cannabis Act with Health Canada.
[1:18] Jason and Joel welcome Deepak to Extraction Insiders and immediately start asking the big questions. But first, how did Deepak make the leap into cannabis from conventional pharmaceuticals? He discusses the stigma associated with cannabis (“just a bunch of stoners”) and how conversations with parents, patients, and physicians started to change his mind.
[4:06] From the perspective of Big Pharma, cannabis was never seen as “real medicine”—but now Deepak feels that attitudes are starting to change. The trio discuss the tipping point of physician education and what North America and Europe can learn from each others’ mistakes. As an early adopter, Canada has created a roadmap for legalization and executed a unique rollout compared to other countries and states.
[9:02] Deepak encourages us to rewind and look at how challenging the journey has been. Counter to perception, Canada’s legalization did not happen overnight; it really started with patients demanding access to medical cannabis. Only once this precedent of licensed use existed, was there a base to build on for subsequent legalization. One such example of patient advocacy was Billy Caldwell and his mother, Charlotte, who changed the UK medical cannabis law with their advocacy.
[12:31] Research is now undeniable, as are the absolute benefits of legalization (economy, taxation, product consistency, and cleanliness). Are other countries looking at cannabis as an export opportunity? Deepak believes that they are—with a range of attitudes and viabilities—and discusses examples.
[15:09] There are countries where cannabis can be cultivated very economically. In Deepak’s opinion, will cannabis behave like other natural resource commodity markets, such as steel or lumber? The answer may vary for medical cannabis, recreational cannabis, and CBD in Canada. For CBD especially, consumer demand is there, and retailers are eager to deliver—provided that regulations can catch up.
[19:13] The US is already importing CBD from countries like Colombia and exporting to countries like Japan. Deepak warns that Canada could be “left out of the conversation” with respect to supply chain arrangements and price competitiveness. Canada might not be able to compete in cultivation (thank you, Alberta winters!) but we can export our intellectual property and innovation.
[21:39] “But that’s not how we do it here!” Joel and Jason highlight the challenges of helping new producers shift their thinking: Their pharmaceutical equipment may have needed to withstand a vast combination of acids and substances, but liquid CO2 and cannabis is the only thing that will ever pass through their new cannabis extraction equipment. Plus, as Joel points out, cannabis product demand is ever-shifting.
[24:51] “We’ve done a good job in Canada calling cannabis medicine, but we’ve done a very poor job regulating it as such.” In this regard, Europe is paving the way by regulating the registration, licensing, and distribution of medical cannabis as mainstream medicine.
[25:43] What made Materia land in Malta? Favourable government programs. Outside of Germany, Malta has done the highest number of EU-GMP inspections. Deepak reviews a positive last few years at Materia.
[27:45] What will the need for regulation mean for high-volume processers in the US, and what will this mean for the industry? For Deepak, this is a “be careful what you wish for” scenario. The FDA has very high standards, and their oversight will require substantial retooling for producers. Will this throw gasoline on the illicit market?
[30:23] “You’re not a drug dealer, you’re a bootlegger.” Until consistent product is conveniently available at an affordable price, will there still be an illicit market? Or will companies quickly scale to fill gaps in the market? In Canada, retail access has generally been a problem, and municipalities don’t realize that “out of sight, out of mind” is a false notion.
[34:06] Deepak discusses the varied understanding and rules for minor cannabinoids around the globe. Health Canada has taken the position that all cannabinoids are treated the same, but on an international level, conversations are still at a very early stage. Deepak believes the future is in minors—and in synthetics—and regulations have to catch up. When we compare access to CBD in Europe and Australia with the limited Canadian access, it’s “almost insulting.”
[36:55] GMP is more than a buzzword that generates more paperwork. Deepak breaks down what it means and why it’s important. Why do most organizations lean toward certification under EU-GMP as the gold standard? GMP doesn’t make sense for everyone, so it’s important to understand what it entails and how it does or does not tie into your goals.
[41:35] What should a consumer look at to determine if a product is consistent and high-quality? Does Deepak think that on-site inspectors will be needed in the cannabis industry, or would that be a mistake? Regardless, the trio agrees on the best advice: “operate like you’re being regulated.”
[45:25] The future for Materia will involve launching their first Materia-branded products in the German market and ramping things up at their Maltese facility. They will also continue to be present in CBD in the UK and Europe via e-commerce. Deepak is excited about moving full steam ahead.
[46:23] France, Italy, Spain, and the UK will be the largest areas of European cannabis expansion, and that’s before accounting for recreational adult use in Europe, which is rapidly progressing. Canada is being looked at as a regulatory example for other markets—but not always as a business example, despite the available information.
Connect with Materia Ventures:
Selected Links on Topics Mentioned in this Episode:
Health Canada—MMAR, MMPR, and ACMPR
I am Billy Foundation
Malta gives Materia green light – Reuters.com
Canada-EU Mutual Recognition Agreement
Hosted by Joel Sherlock and Jason Laronde, Vitalis brings you wise, humorous, and sometimes shocking conversations with entrepreneurs and extraction industry innovators on 'Extraction Insiders'.