‘Enabling Medical Cannabis To Grow Properly In Europe Is The Real Opportunity’ – Avicanna

In the run-up to Cannabis Europa 2023, Prohibition Partners’ CEO Stephen Murphy caught up with Aras Azadian, co-founder and CEO of Avicanna. Stephen and Aras discuss Avicanna’s landmark partnership with Canadian pharmacy giant Shoppers Drug Mart, alongside reviewing differences between the Canadian and European industries, patient access and affordability and what to look forward to in the emerging European market.

Stephen:

Hello, and welcome to the Business of Cannabis podcast. My name is Stephen Murphy, CEO of Prohibition Partners and joining me today is Aras Azadian, co-founder and CEO of Avicanna, one of the leading global biotech category companies based in Toronto, Canada, with operations around the world. Welcome Aras and thank you so much for joining us today.

Aras:

Thanks for having me. I’m excited to be here.

Stephen:

We’ve had the pleasure of knowing each other for a number of years. You’ve always been, despite being a public company and having to release a certain amount of information, one step ahead in terms of uncovering the latest development or latest requirements in terms of patient care and patient access when it comes to cannabis based medicine.

And there is the most recent announcement from Avicanna relating to the partnership with Shoppers Drug Mart, something that obviously has huge significance in Canada and for patients in Canada. But I think for patients around the world in terms of the evolution of the medical cannabis market, perhaps you can give me a little bit of background in terms of how you got in with the likes of Shoppers Drug Mart and the rationale for positioning this within your business and group

Aras:

Thanks Stephen. So I think first of all, it’s important for everyone to understand; Shoppers is the largest pharmacy chain in Canada, they’re the CVS or Walgreens in the United States. They were the first major federal national level pharmacy chain that developed, established and then actually delivered a medical cannabis care platform, which means full medical cannabis offerings to patients, full patient support programmes. This includes pharmacist led call centres and advice and support.

Also, they were in many ways pioneers in terms of reimbursement. We’re talking private and public reimbursement, which is obviously an adjudication process. The summary is; we’re going to be transitioning and taking over this very successful medical platform which has tens of thousands of patients across the country in Canada, and I believe is the gold standard for complete medical cannabis care.

In terms of how we got started on this journey, originally we were biotech, just a drug pipeline and taking sort of the Canadian version of the GW Pharma story. However, when access to capital got unlimited, we actually started transitioning into medical cannabis, meaning we took our pharmaceutical drugs and we took those pharmaceutical preparations that were substantially more advanced than what’s still in the market, products that had preclinical data, stability data, products that could enhance absorption and bioavailability etc. We started commercialising them under medical cannabis. But the first medical cannabis product I ever sold was with Shoppers.

So we actually were exclusive and for us coming from a more of a strict medical pharma background, we wanted this to be through Shoppers Drug Mart. So we built an incredible relationship with them and started with two SKUs exclusively. Today we have 23 and we have started getting into much more advanced discussions and collaborations specifically on the clinical side.

We’ve started in clinical collaborations. One of the collaborations I’m very excited to continue to do is Sunnybrook Cancer Centre which is a research centre / hospital where we are actually dispensing medical cannabis in the hospital to oncology patients which was done in collaboration with Shoppers. I think we demonstrated our ethos, we demonstrated our focus on patient care and I think when time came for them to transition that business we were identified as the right partner because of that very direct untainted focus on medical.

Stephen:

Patient access programmes and medical cannabis itself has generally been populated by new companies with first time management teams who are going through the ropes of building processes and the supply chain. What was it that Shoppers Drug Mart were able to bring to medical cannabis care for patients in terms of having a more established background and a history and a legacy of doing that for patients?

Aras:

That’s a good question. I think, first of all, they are the biggest pharmacy brand in Canada. So that allowed us to offset one of the major issues that we faced with commercialisation and scale of medical cannabis.

Naturally, if you’re a physician, and you want to prescribe medical cannabis to a patient, and you can refer them to a licensed producer or to Shoppers Drug Mart, you’re likely going to look at Shoppers Drug Mart as the less stigmatised or less risky pathway, I think that was quite important. And within that context, they were also able to leverage off of their existing infrastructure in many ways. They obviously have a large team dedicated to patient care, they were able to utilise their existing IT infrastructure and insurance relationships to actually get these insurance providers on board.

In many ways, Shoppers move this medical cannabis project forward massively because of their reputation, because of their scale. And while they’re a pharmacy company, the Medical Cannabis by Shoppers division, they became experts of medical cannabis.

Most of them are pharmacists, so it was a very unique positioning in which they had the infrastructure, but then they have the understanding of cannabis, you never get both. I think that they did an incredible job of building the platform. We think it’s an honour to be able to have worked with them for years, but now be able to take over this business, take over this base that they’ve built and hopefully be able to enhance it and grow it.

I think that those are the key variables. And again, having federal legislation allows that to take place, that’s not going to happen in CVS or Walgreens anytime soon.

Stephen:

I think our good friend Larry Lisser, who runs ‘Hello, MD’, has been looking to enhance patient care and bring together the healthcare community and patients for some time and he recognised the achievements and accomplishments developed by that Shoppers Drug Mart team. I think what’s also very, very interesting is the ability to blend the reimbursement in both public and private healthcare.

Is this a platform or technology that can be localised and internationalised? As you broaden the focus of Avicanna will you be looking to take this level of technology and services with you?

Aras:

I think I would call it a full package, I don’t think it’s just technology. In terms of technology the safety data privacy requirements that cannabis regulations have are relatively primitive compared to those of private and public payers that require in terms of data breaches, patient safety, patient information breaches, etc.

Shoppers helped build those processes, and we are now implementing those processes. So we will have a base that not only will allow us to provide continuation of care for the existing patients, but also to be able to build a platform that can bring on more private and public payers in Canada initially.
Second, it’s about growing that patient population. So it’s working with the payers to notify them of the opportunities related to medical cannabis, specifically in pharma-economic data. Essentially showing that currently reimbursement might be only for spasticity or for chemotherapy induced nausea, but have you considered the benefits of medical cannabis for your pain patients, and the potential reduction of short term long term disability?

I believe we will be collaborating with the larger private and public payers, this is going to be, in my opinion, monumental in the size of the population. But from there you take that entire package, and now you’ve established a standard in G8 country you can now work with other countries. For example one day when the US goes federal, in my opinion, it’s not going to be a multi-state operator that all the sudden lands in CVS or Walgreens. It’s going to be the company that has perhaps done this already in another country successfully that has SOPs, has the programmes in place.

I think that can very much be translated and expanded internationally. It does also come with medical education, patient education platforms, and continued metallurgical medical education courses, things like that you’re very familiar with Stephen.

Stephen:

Speaking of internationalisation and adding to your stack of services and offerings, on the second and third of May, you will be coming and speaking at Cannabis Europa is the Barbican in London and we’re excited to have you.

Europe has long had the interest of certainly Canadian cannabis companies, what do you feel is different about 2023, compared to 2018 or 2019 for European cannabis? And why are you making more of an effort now with internationalisation and spotting or adopting the opportunity within Europe?

Aras:

Let’s start with the companies. I think three years ago, I remember attending your conference, and there were thousands of companies. A lot of people that thought they’re going to become rich overnight from entering the cannabis sector. And I think that era is over. So now you actually have the companies that have survived, the companies that have built infrastructure and have a real businesses have been identified, and we’re looking to collaborate with those.

In many cases, we know them. So I think it’s a very different opportunity now, I think it’s a little bit more serious. I think the cleanse that was necessary is gone. Regulations have obviously advanced in Europe to a certain extent across cosmetic and medical and pharma. So I think there’s an interesting opportunity for us there.

We have certainly grown and evolved as an organisation. We really went double down in Canada and ensured that we got medical cannabis and our pharmaceutical pipeline right. So now we’re in a position to, in my opinion, have better offerings.

But most importantly, at a very macro level about the European opportunity, I think opportunity is medical. I think everyone is looking at the shiny object being recreational, and when will Germany legalise recreational because everyone’s going to become rich again, but I think the opportunity is medical.
Medical legislation exists and can be scaled. Shoppers is recognised as an example of that and that needs to be done with professionalism, step by step and it has to be done with hand holding for patients and collaboration with the medical community. I think that’s the real opportunity.

And for me, frankly I would prefer if recreational or adult-use slows down, because we saw what happened in Canada. Medical was growing, medical was getting established and the medical community was getting interested in getting involved with the likes of Avicanna. But then when the dispensaries popped up on every corner, physicians started saying: ‘Why would I prescribe? Why would I help a patient if they can just walk into a dispensary?’

And I think that’s also wrong from a physician’s perspective. You don’t want a patient with multiple sclerosis to walk into a dispensary and ask your bud tender for advice. I think having medical and rec at the same time can be can be harmful for the potential of medical, so having a strictly medical system and infrastructure for at least a few more years, so we can grow medical cannabis properly in Europe – is going to be the real opportunity.

Stephen:

The big question and challenge within the growth of the market is, of course, reimbursement. In Germany you have public reimbursement but for a lot of countries legalising, they’re citing their lack of evidence or lack of information regarding failure to reimburse and and putting the onus on the patients to pay for it out of pocket.

Do you feel much better equipped now with MyMedi.ca and the information you have at hand from lobbying or talking to regulators and showing them a very clear path forward in terms of best approach for reimbursement? And is that something that is an area you feel that you can take and have a market advantage?

Aras:

So I believe yes, I think we’re qualified and we have the experience. But I think the approach, in my opinion, would be first to make the products more affordable, because reimbursement is going to take time.

If medical cannabis is more affordable, because we’re sourcing the API or the biomass from the right suppliers, and we see a little bit of rationalisation of pricing within the market, people will pay out of pocket for products that are helping them if they’re affordable.

We saw that in the UK already, massive price reductions. If we can continue to drive those prices down to what is more affordable for the general population, you are going to have substantially better adoption. You don’t need reimbursement only to have adoption.

Second I think, in terms of reimbursement, perhaps the opportunity is with private payers first. That’s where again, the macroeconomic data and the collaborations demonstrate that you can reduce opioid use and you can reduce costs associated to short term or long term disability and other treatment through cannabinoids.

I think we’ve seen it, they’re doing it in Canada. I think ultimately it will be the government. They’re always going to be the slowest movers, as you know Stephen. But again, the opportunity is going to be patients first and they will pay if it’s helping them and if the price is affordable and the quality of the products are good and if they’re being educated properly and they’re getting the right information to them.

Stephen:

Hopefully we will in two weeks time when we’re near London – talk for hours on this. Super, super excited to have Avicanna back to Cannabis Europa 2-3 of May in London. Super excited to see the progress of Avicanna, one of the most exciting companies in the sector and certainly a flagbearer for how business can be done right. Aras it is always an absolute pleasure to have you on Business of Cannabis.