David Brown talks with Marc Wayne about his company’s plans for the future, and how the medical market will play out in the face of a recreational market
Marc Wayne, President of Canopy Health Innovations, says Canada is entering a golden age in cannabis research, as access to supply and interest from the public and private sector increases. While much of the attention is currently on the future economic potential of a recreational cannabis market, Wayne says he sees an enormous amount of potential in the medical sector as well. Access to a well-regulated supply of consistent product allowing for more clinical research and more confidence in the medical sector will mean significant advances in cannabis science, with Canada at the forefront.
And as much of the market has focused their attention on the expectations of a future non-medical, adult-use market, Wayne has chosen to stay dedicated to this medical research with his new company, Canopy Health Innovations. While the non-medical market is exciting, Wayne says he sees the real potential in the opportunity for increased, focussed research looking at cannabis and cannabinoids with new clarity.
Wayne is the founding president of Canopy Health Innovations (CHI), an independent and private collaborator with Canopy Growth Corporation and its subsidiaries, owned in part by Canopy Growth Corporation. Wayne has been involved with medical cannabis in Canada for a long time. First, he spent five years with the Canadian Consortium for the Investigation of Cannabinoids (CCIC), and then another five as the co-founder and president of Bedrocan Canada, one of Canada’s first licensed producers of medical cannabis. He’s also a founding chair of the Cannabis Canada Association (formerly the Canadian Medical Cannabis Industry Association), an industry association with 17 licensed producers as members (out of 45, currently).
Wayne stepped down from his position at Bedrocan Canada last December to start Canopy Health. He took some time recently to discuss this move with Lift, and where he views the future of cannabis research. You can read our interview below:
Tell us about Canopy Health and why you stepped down from your position at Bedrocan Canada?
“We accomplished a lot [at Bedrocan Canada] over the five years I was running it. I was proud of the team that made it happen. But at the end of the day, Bedrocan Canada is a producer, an industrial growing operation, and over the last few years has been fully integrated into Canopy Growth and their operations. So seeing that and under the umbrella of an evolving landscape, we felt the time was right to transition my skillset and passion into starting another company that will focus, really, on taking some of these products that we were making or can make through clinical testing.
“It became apparent what was needed within the group was a credible and focused research engine to do that and you know, it’s hard to do both in such a dynamic environment as we’re in right now. Canopy Health was created to fill this gap and this need. And it will be acting as a research and development engine with preferential access to Canopy Growth supply and Canopy Growth licenses, and the result of that, we hope, will be innovative products with improved and validated health and medical claims.
“Canopy Growth is the largest shareholder of Canopy Health and our closest partner, but we are an independent and private company, and through a framework agreement with Canopy Growth, they have the first right to commercialize all the products that we develop.”
You mentioned innovative new products. Can you give some insight into what some of those might be?
“We don’t want to get into what we’re working on specifically, for obvious reasons, but in the general sense, we’re looking at whole-plant, multiple compound formulations targeted towards specific medical indications, and layering on top of that intellectual property creation, and we are looking at all the health markets.
“We’re also targeting product development in the companion animal space. We formed a new, wholly owned subsidiary of Canopy Health, called Canopy Animal Health, and we feel there is a strong opportunity there to develop and do research on credible products to treat similar issues in companion animals such as dogs and cats. So that’s another aspect of this.
“We see changes on the medical side evolving; we see strong focus on plant characterization and isolation and knowledge of specific compounds and strain characteristics, and we see companies working on unique delivery systems, for example, to increase oral bioavailability, dose metering systems, etc. So all of that, we’re seeing the movement and preference away from flowers to the reproducible stable oils in the medical market. We want to take advantage of all of that and work with some of that.”
You mentioned oils. What I’m hearing from some producers is that they are seeing a broader acceptance from physicians of cannabis oils than flowers, leading to more being willing to recommend cannabis to their patients. Does that reflect your own experience, and are there other changes in modes of consumption that you see further increasing that acceptance from the medical community?
“There’s been a significant shift away from flowers into oil in Canada and other regulated environments. It’s clear that physicians are more comfortable with this derivative, and clinical research is mostly focusing on these types of products. I don’t see much value in doing clinical research on dried flowers moving forward. I’m not sure how the market has changed specifically in terms of numbers under the current regime, but I can tell you that from a pharma and research perspective, oils provide the standardized reproducibility and dosage forms that researchers need and clinicians want to prescribe, while at the same time they’re preserving the important issues of efficacy that we’re seeing from the plant and it’s multiple compounds, so it’s kind of unique in that respect.
“We continue to have issues around dosing and education around oils, and that’s a problem and an opportunity. Patients still have so little idea what to take, how much to take, what product works for them, how long it takes to work. So this is where we kind of fit in, this is Canopy Health’s niche. We wanted to answer some of these questions and fill this gap. And if we’re successful, we’ll open up the integrative market with an opportunity on the medical side with these oils and other products. More understanding equals more data, better products, more comfort for physicians, more prescribing, more access.
“Currently, the ACMPR is limited to oils that are liquid at room temperature. That’s all you have right now. But the ability to work with other forms outside of the ACMPR but under a GMP license provides companies who have access to this, like Canopy Health, the ability to work on different formulations, different delivery systems that allow us to try to advance medical cannabis products to another level, a next generation essentially.
“I believe that those kinds of products are the future and will further build acceptance for cannabis among the medical community. Medical access points like pharmacies who are clearly positioning themselves to distribute will be more comfortable providing their customers with health products that have that kind of associated claim, so that is a natural outlet in our view.”
There’s currently a significant amount of interest in the economic potential of the future adult-use, non-medical market. Where do you see the future of the medical market in terms of research and funding, and do you see it as being able to compete or compare with the future non medical market?
“I won’t predict this market over that market. That’s going to be tough. They’re both large and there will be companies that will succeed in either of them by providing great products, and of course there will be funding available to those companies who are working on great products.
“This is really a golden age of cannabis research coming up in Canada, and Canada should seize and lead this. Unlike the United States, the regulatory channels are open here to do this research. There’s never been such access to stable quality and variety of product, supply in oils, and we have a much better understanding of the plant chemistry now. We’ll see cannabis-focused biopharmaceuticals like Canopy Health with strong business plans and the bonus will be a robust pipeline of cannabis-based medicines and health products, in my mind—not right away, but a few years down the road.
“And this doesn’t have to only stay in Canada. We can export this knowledge and these products to other jurisdictions where’s there’s a favourable regulatory environment. So my vision of safe, effective cannabis health products that have validated claims is one I feel is achievable.
“When you talk to your 68-year-old neighbour who wants a certain dosage of milligrams of THC and CBD twice a day for X indication, or your 11-year-old niece needs X milligrams of CBD every four hours for Y, if these patients can speak to a physician and access these medicines with confidence, and pharmacies can distribute them to their customers with confidence—that’s where we’re heading. So my view is there is a whole much larger medical market of cannabis-naive-and-reluctant people who are not recreational, and we want to access and grow this particular market.”
The federal government has said they want to leave the current medical regime (ACMPR) in place for five years while they sort out the implementation of a non medical system. Should medical remain a separate regime, long term, in your opinion?
“That’s a good question, the one many people are wondering. From a product and general supply issue, I don’t see a need to separate them. Both require regulated, quality inputs, regardless of what market they’re going to, although you will need some GMP standards in some cases. But from an access side, it’s important that patients continue to have access to medical products, a variety of them. I’m not convinced that once the adult-use market is implemented that we will continue to see a strong focus on non-THC cannabinoids or other innovations around other compounds that may be efficacious.
“We need to be conscious and compassionate about lumping customers into one market. Obviously there’s skepticism about who are true medical users or what the true medical market size is, but I can clearly tell you that there are two markets, and patients should not be suffering or left hanging because of legalization. I think we’ve seen a lot of talk about that and it’s justified.
“There’s also concerns about cost and taxation. Everybody was surprised there was no recommendation from the Task Force to remove the tax on medical patients. But the reality is they were concerned about creating an unlevel playing field whereby non medical users would access the medical side if the product was cheaper without tax.
“Honestly, if we fail to distinguish, we’ll never be able to treat cannabis as a true medical option in the traditional sense. So I see the strong need to distinguish this, and hopefully this view will prevail.
“So I guess my vision is a combined regime on the production of input, but a diversion on the distribution side whereby medical products are perhaps held to a different standard, a higher standard but not an impossible standard. The result will be more distinguishable health products, and possibly better chances for tax relief and cost acceptance through insurance and differentiated and appropriate access channels like pharmacies. But to get there, these products will have to be developed and clinically tested.
“To achieve this, we need the medically-focused players in the industry to come up with strong research plans that achieve safety and efficacy, and produce data that is acceptable to the regulator. At the same time, regulators should approach cannabis research in a third way that we might call a “controlled natural health product“ that has some important rigors of traditional therapeutic drug development but is more in line with natural health product standards.
“I’m not saying that we don’t need proper drug development and clinical efficacy work, but we have strong safety data, we know cannabis is safe. We have to present it properly. We also know that other cannabinoid products were approved with reasonable low patient numbers, under 150, so I’m confident we can get there.”
In terms of excitement on the investment side of things, there’s a lot of emphasis on the rec side in regard to revenue through sales, but the medical side appears to be more about research and development of products that may or may not make it to market any time soon. Is there a way to better help the markets understand this distinction?
“Well, investors don’t have a lot of patience, first of all. So the research side is going to take more patience. But the value that can be created through credible companies with good teams and good plans can be extremely large. You have GW Pharmaceuticals which is a three or four billion dollar market cap company at this point, and that’s not insignificant. The pharmaceutical market in the US is a 400 billion dollar market. I’m not saying that cannabis is a 400 billion dollar market, but there was a study that looked at medicaid expenditures in the US where medical cannabis was legal and there was clearly a shift away from other prescription drugs to medical cannabis, I think in the order of ten or eleven percent. That was calculated to be four billion dollars in the states where there was medical cannabis. If you extrapolate that to all the areas around the world, that number becomes a lot larger.
“So there’s a market out there, and investors need to consider that. Frankly, It looks a lot less crowded right now on the medical side with legalization, so there is opportunity for quality companies with credible plans that will be creating great products, and there will be value there for those investors.”
We’ve gone from legal access to only dried flowers, then to oils in a limited potency. What are some future innovations that you see patients in Canada having legal access to in the next few years?
“The regulator needs to work with the industry in a big way right now, as I’ve mentioned for many reasons, both in legal and medical markets. And if that happens then we could see a multitude of interesting delivery systems providing access to cannabis based compounds, cannabinoids and others. Whether they’re sublingual delivery systems, or inhalers, or pills that provide better bioavailability, on the medical side there will be a strong focus on dose metering and an increased bioavailability of cannabinoids. So I think you’ll see quite a lot of companies looking for those innovative delivery systems and matching them up with unique blended compounds from the cannabis plant.”