Stephane Dupervil, Quality and Compliance at Cannacure
Raised in Montreal, Stephane has degrees in Microbiology and Management from McGill University. He made the jump to the Cannabis industry after working for more than 10 years in pharmaceutical injectables production. Now, he's the Head of Quality and Compliance for Cannacure Corporation, a company with facilities in Fort Erie and Essex County in Ontario, Canada.
stephane@cannacure.ca
http://www.cannacure.ca
EPISODE TRANSCRIPT
[00:00:01] You're listening to thinking outside the bud where we speak with entrepreneurs investors thought leaders researchers advocates and policy makers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt
[00:00:30] Welcome everyone. I'm Bruce Eckfeldt. I'm your host This is the thinking outside the bud podcast and here we're going to talk a little bit about what's going on in the cannabis space. From a business production point I have my guest today is Stephane Dupervil.
[00:00:47] Stephane welcome to the program. Thanks for having me. Bruce let me just give people a singing background little bit of background on you. So if people haven't figured out by the little bit of accent that we've heard in your name. You were born and raised in Montreal are actually not born raised in Montreal where you're born in Montreal.
[00:01:05] Actually I wasn't there was born in Haiti. Born and raised in Montreal.
[00:01:09] One of my favorite cities. Stephane is a graduate of McGill University in both microbiology and management. My alma mater so I'd love to see McGill on the list here. Yeah and the reason he's here today is because he is head of quality and compliance for Cannock cure corporation and we'll talk a little bit more about Akure and his role there as well as kind of what's going on in the Canadian cannabis market in the cannabis space and you guys have facilities in Fort Erie which I believe is near Buffalo. Exactly. And Essex County which I think is the other side of the lake. But we're by Detroit.
[00:01:45] Exactly that's exactly right. So right right kind of on the U.S. border but both Canadian facilities.
[00:01:51] So why don't we start just with kind of helping people understand what's you know kind of what's been going on in Canada relative to the kind of Mark I know you've got a very photogenic leader right now who has been very big on talking about cannabis. I know the provinces have been doing various things. Give us a little bit of background on what's going on with the kind of space there.
[00:02:14] All right. Let's go out very quickly like you talk a lot about legalization for the recreational market right now and this is what's happening with Trudeau and which you alluded to but all this started a while ago with the first legislation for medical marijuana. So the thing is at the beginning you had only a Crown corporation that could sell medical marijuana to a very small amount of people and they could not supplies be had treated as second legislation where people could while more people could apply and companies started that way. This is where you have those sweet and all that and all the bigger companies that's when they started and this company you know under this regulation it was called the MPR which is the medical marijuana production regulation and crowned it just to clarify for folks.
[00:03:01] When we talk about a crown company that's a government a government organization it's that. Originally it was controlled by the go. The government said OK we're going to do. We're going to control the actual production of cannabis for the medical market.
[00:03:13] That's exactly it. So the problem with GM UTM NPR is that he created it was it was basically saying that people could not grow their own which was a little bit kind of possible. I'm talking about individual so individual could not roader their own and this was possible before and this was struck down by the Supreme Court and then the new regulation to be created and as the ACA MPR which is basically the mix where you could have people that could grow their own medical marijuana and still had the companies that had to go to get their licenses and and grow this way.
[00:03:46] So this is growth growing for personal use. This is I can grow my own medical marijuana for my own personal use.
[00:03:52] Yeah exactly. Right now this is this situation so you have companies that can grow marijuana for any random person or you can have you yourselves you have a medical. You have your medical card and you can grow your medical marijuana for yourself. Got it. Is of course you know restrictions there the amount you can grow. And all of that. So so that's the situation right now. And then what Shudo is what that has been going on in the past few months that everybody's talking about is the stock market going up you know and while down these days. But you know we like to think it's really because recreationally like it will be legal for companies to sell to recreational users. You're removing the medical part now and people that want to buy marijuana to get high. Can't you. So this is basically the end of prohibition. Got to end it as everyone here very very excited about this and what the legislation is in place like.
[00:04:45] What is the actual status and what's the timing of the market actually from a you know boots on the ground.
[00:04:50] You know people being able to actually go down the street and purchase recreational marijuana where we were few months away I would say like the last hurdle which was the Senate got passed a few weeks ago and it was really good news. Now the government has to put in place the regulations. You've had time to you know they've done public consultations. They have draft regulations that are propositions that are being made. So this is working. The goal was to have this before July 1st. You know frankly that's the goal. Personally I'm a bit skeptical but either way like it's happening it's happening fairly quickly like in the grand scheme of things it had decades of growth.
[00:05:34] This is the end of the it to give us a sense of how how the federal and the province plays their or their province by province aspects to this or is this universal across across all provinces.
[00:05:47] So the federal is basically legalizing recreational marijuana. Now how this is exactly set up will be province by province. So each of the provinces one day want to tax they want the tax money right. So they need to set up in a way that will maximize that for them. So are the provinces have fairly different setups. For example Ontario. It's a little diesel sold through a company that we have here that's called LCB which is a crown corporation owned by the Ontario government. We're going to LCB all currently sells the Liquor Board of Ontario. So it's like that.
[00:06:21] Q in Quebec.
[00:06:22] Exactly. Yes. So they sell liquor and they basically regulate this whole thing and then marijuana would come under their umbrella.
[00:06:30] So actually let's let's talk about this briefly so people understand just from the market dynamic point of view because in the U.S. We don't have this and the same way that alcohol is actually sold by the province so I know and Kovak we have a say.
[00:06:44] Q Certainly old poured alcohol and some certain wines and things like that or purchased you purchased through an essay Q store so you don't have the same kind of market as you do here in the U.S. with local liquor stores. Similarly in Ontario they have their own government controlled liquor sale program and you and I know in Quebec you can buy wine and beer through grocery stores and other places as well that the same in Ontario or do they have to they control all alcohol sales.
[00:07:14] Yeah I'm pretty into Ontario actually but I think from what I understand is they control all the alcohol sales and there's another entity that's called the Beer Store where you can buy beer and the like beer store drinking beer and in grocery stores.
[00:07:28] Now yeah I remember that from college.
[00:07:32] So there'll be a similar kind of model that the provinces will be involved in the actual dispensing and sale of marijuana products.
[00:07:42] Well not all provinces if you look at Alberta for example there they're talking about having private private companies selling it. So the thing is that the other provinces basically set their own framework to how this works. Another difference is as an example is Quebec is saying that you will not be able to grow your own as an individual for personal use. Whereas Ontario. This is Boston. This is possible as it. Now like this is the way they're setting this up.
[00:08:08] Got it. So so it those those kind of the finer aspects of how the market actually produces distributes dispenses product will be kind of dialed in mostly determined by the provincial legislatures on a case by case basis. Exactly right. I think that's what gives us a sense of where the federal situation is what the time frame is perennially those things are getting worked out. So talking about the market and you know how sort of can a cure we know what it is how it plays in the market what its focus is what it how it's hoping to kind of take advantage of the legislation as it rolls out. Give us a sense of that.
[00:08:46] So the thing is this has created is that you have a lot of companies that are coming in. I was looking a little bit earlier. There is 92 licensed producers talking about conservation licenses. Well actually I should explain this. So there way the licenses worked here is that you can get a cultivation license which lets you cultivate marijuana and then you can sell it to another licensed producer or. Well basically that's it. And then you can get a sales license where you can sell that to and when you can sell their marijuana or or actual BAHFEN somebody else and you can sell it to an individual that has a medical card or the like. So it's basically a two step process. Now the thing is right now we have 92 licensed producers we are talking about cultivation and about half of these have sales licenses. Now that cannot cure the we we saw we saw things were in the process are getting our cultivation license so that when we saw us doing things and to take advantage of the fact that there's a lot of companies that want to sell to people is that we have 150000 square foot facility in Fort Erie where we'll be focusing on processing cannabis so we'll be doing traction we'll be doing edibles we'll be doing you know any type of these things right now. This is where we're in the process of getting all these licenses these but this is how it's starting now. The other thing is that we also have we're in the process of getting licensing for our greenhouse which is in Kingsville in Essex County which is an 80 acre greenhouse and this will be our focus for cultivation. So we'll be growing at the Greenhouse shipping into 40 year and then and then processing it crosses and get it.
[00:10:31] So you're going to literally do the growing of the greenhouse in Essex create the raw plant material transport it to your location for basically turning it into a saleable product so you're actually going to take it to an extraction take it to an edible ready to sell. Are you doing packaging and things like that. Are you letting the final sell or do the final packaging to it.
[00:10:55] So the ideas that have this whole thing as a turnkey as a turnkey solution. So yes there will be packaging you know people can send us their artwork in and do and then we'll be doing the packaging that's now. I just want to be clear in terms of the timeline we I would say months away from from getting able to to do the whole drinky thing but we're moving there very quick. And the more license produces there are the better it is for us because there's more customers for us.
[00:11:23] Yes. It's interesting. So you really kind of taking the sort of the early part of the process and say look let's be experts or not let's partner then essentially have as clients. All those people that are good at the marketing and the retail and you know getting customers and building customer relationships and just being really good suppliers. It's like a third party manufacturer OEM kind of of a of these products now. So I think from a business model that makes sense now you're going to be supplying the idea that you're going to be working just on the side of Ontario or throughout Canada.
[00:11:59] We're going to be working throughout Canada. Of course we're close in Ontario and we're building our network C with Ontario's first talking's and we were outside as well and we are even talking to people outside of Canada as well. So we're talking about Europe where you know Germany just opened their borders to medical marijuana. It's a big big thing. This week there's conference there about medical marijuana that I think a lot of people are looking to. And this is a big opportunity. I mean Germany has more people than Canada and this is no no this can be potentially huge and can companies have the expertise to make this legally within within a level of quality that the German people are used to with drugs with new pharmaceutical drugs. So this is this is a big this is a big plus for Canada.
[00:12:46] Yeah and I think that's I mean it's one of the interesting things. You know just from a business point of view that the Canadian market offers which is you know you've got you've figured it out you figured out the federal legislations you can actually participate in a global economy.
[00:12:59] You know we're still kind of stuck here in the U.S. with this kind of the federal issues and you know we can't it's hard to contemplate participating at the international level when you're dealing with the Reds the restrictions that we're under. So well said let's look a little bit about. So I get I get the role that you want to play in the market. I think it's a good point that the market really is international now not just national for your federal now for you in terms of you know the scope of this. Let's talk about the kind of the growth side first because I think that's interesting. I mean you said this facility was 40 acres 80 acres acres so you've got 80 acres of greenhouse facilities. When you start to contemplate going from you know having a little tent in your basement you know growing a couple of plants like to going 80 acres like a house. How do you actually what are the considerations or factors that go into thinking about a growing at scale like how are you guys. What have you learned or what are the things that you're you're grappling with.
[00:13:58] Have to say we're still learning and we have as I said we have some ways to go. Yeah but the thing is is that everything is much bigger in the sense that all the dealings all the you know the technology that needs to be implanted to control all of this is just as well.
[00:14:17] What it means to be at a bigger scale is that something that you know would have sex you that's a one in one thousand or one in 1 million they would have sex like you have to take care of that because 1 1 million will happen you know you're doing it like and this will happen you have to do to plan for this. And it's really I would say it's also figuring out how to use all that capacity and to make sure that we can be you know you don't want to flood the market either. So you need to make sure that you're profitable in doing this. So it's really finding the way that we can use this in a very cost efficient way and that we can have a report of this high quality and cost efficient.
[00:14:55] And your role there as head of quality and compliance. So what is your day to day look like or what are the things that you're focused on relative to this whole production process.
[00:15:05] Yeah I would say right now my role is quality and compliance but at the startup phase so my day to day is very hectic in the sense that well you can see in the video but you can't hear that.
[00:15:17] But the thing is just here everything is temporary right now. I mean it's 40 right now and they're doing the construction building the walls and everything so it's making sure that that this is going on to according to splines and there there's no issue related to the compliance which is there were no issues related to the law in terms of the greenhouse at this point is reburying all the reports the way an application work without Canada is that you need to submit several reports. One of the most important ones is the quality assurance reports which will have all your SEPs that's all your standard operating procedures from you know how you grow you package how you investigate this you know you then follow your packaging procedure. How do you investigate that discrepancy. All of that need to be written down those that are familiar with the pharmaceutical space will will be very familiar with this. But you're not it can be very very daunting because you know we have I don't know how many documents but it has been around like three hours for 360 documents that we submitted and business we're looking to submit as well as what we know so.
[00:16:24] So my understanding is the backgrounds in the pharmaceutical space. Yes. So tell us a little bit about what you've been able to learn or what you've been able to apply from your expertise in pharmaceuticals to this patient and what has been new and challenging.
[00:16:36] So in terms of pharma like what I've been able to bring is this understanding of what health canada wants us to do so health canada is there to make sure that we are bringing in a product that is safe where people know the quality you know we have a product that you know is good or whatever. But the end rule is not that right as you just make sure that you know nobody takes it in and has a really bad experience. Hopefully nobody dies or anything like this and they need us to prove that to them and to prove that to them you need to have all that documentation and need to show that you are following that documentation and if you say that you're going to do X and then and then well you want to do aid and B and you do aid and b do agency. So. So this is very important and this is something that that coming from pharma is not really something that you see in other industries that are not highly regulated. This is something that can bring and show make things smoother when you're going outside without Canada you know. Now the thing that has been more challenging I would say is Pharma is a little bit more like this mentality is entrenched in pharma so it's easy to explain.
[00:17:46] Whereas here you have a lot of people that come from a lot of different backgrounds and then explaining this can be a bit difficult to understand if you haven't lived through a health kind inspection or a regular regulator's inspection from whatever industry. It's hard to explain exactly what it is. I tried to say that's a little bit like now when you go through customs and then they start asking you a bunch of questions and the like. It's a little bit like this but you know less is less a whole day. You know a few days or a week. That's right. So they're not here they're not your enemy or anything like is there. They're doing their job and everything but you need to understand that you're answering questions in a way that you want to go to right now. So so so that's the thing. And then explaining that to people is one thing. Of course I learned a lot about growing marijuana which I did not know about or joining this industry. Now it's really fascinating it's really interesting and this is. This is this is a super exciting opportunity to be able to be part of the industry at this point in time.
[00:18:48] Yeah yeah I think that's an important point which is this where we are on this whole kind of you know kind of his business kind of a space is this is really a kind of intersection or or a mashup of of that sort of the marijuana pot culture you know historically with this kind of pharmaceutical medical science with you know business investors you know looking to you know create new companies new profit streams and then the international stuff. I mean we've got all these kind of regulation market dynamics you know people coming up with standardization is like how do we even define what these products are in a way that we can buy and sell and trade and you know create international standards around us. It's it really it's a fascinating time.
[00:19:34] So I guess some more are some of the things that you're focused on in the coming months in terms of you know both the industry kind of a citrusy in general I think things you're waiting to have happen uncertainty's that you see that are going to be big to kind of watch out for as all this unfolds in the coming months and years.
[00:19:52] Yeah in terms of the cannabis industry in general the way I see it is the main thing that I see is really how medical marijuana will take cost in the country in the countries where it's not right now. The thing is if you look you know Germany does it in this big deal like you look at the stock market when this started happening that was likely last year and then people start realizing that KADEK and Solidaire like it started blowing up. This is Germany and this is one country. There's other countries in Europe that are doing it. There's a lot of big countries are not there like France or not like and those countries eventually will get there like as you get more and more data supports that medical marijuana is useful and can be used for treatments. Then you get all those countries that come in and as you get more and more data that you know you can get a lot of money out of it and governments will want to jump in as well. You know even the United States like recently saying that they're looking at medical marijuana at a federal level you know is going to be a big deal like to be able to sell to the U.S. 300 million people against 30 million people in Canada. So this will have a lasting impact. And of course the other big thing is wreaking recreational marijuana where you are where you are multiplying your your client pool by tyddyn or more. This is seeing how it will evolve in Canada which is the biggest country to do it like on a federal level at this point will be very interesting I think a lot of countries are looking at that is one big thing is and I don't know if people are aware like Uruguay is another country that legalized recreational marijuana. Yeah and they've had some issues with banking where it was not possible for people to use banks at all. So this was a purely cash business.
[00:21:37] And I think that in the U.S. This is some problems just to. Santos correct. Yes
[00:21:42] Sir. Looking to see like how Canada will approach this issue because international treaties are still there and there's there can be some issues there.
[00:21:52] Yeah yeah it does seem like there's a lot of sort of secondary and tertiary issues around the markets and secondary market. Other marks that need to also catch up that are going to impact or at least create stumbling blocks potentially at certain stages. So figure out what those are and getting out of them. And honestly those are probably where the the other business opportunities are for people that are just getting in here. So if this was amazing if people wanted to find out more about you and Cannock your and the business what's the best way to get ahold of you.
[00:22:21] Well I would say the best thing is to go to Cannes and cured CA. Our Web site I'm guessing better time to read this is going to be up and running again to find more information about this. I think you're putting my contact info if anyone has any questions feel free to ask and my email is going to be there.
[00:22:42] Perfect. Make sure that your email address or no link to the website is on the show notes here. And I really appreciate it. It's an exciting time and I'm curious to see how this plays out and it's going to be it's going to be an interesting six 12 months so look forward to keeping a close and see how you guys do.
[00:23:03] Thanks. Thanks for having me. I really look forward to listening to the other interviews a bus cast Castledare. It's a very good idea.
[00:23:10] Excellent. Thanks Stephane missable crew. Have a good day. Sure. So
[00:23:18] You've been listening to thinking outside the bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at thinkingoutsidetheBud.com. And don't forget to sign up for the free newsletter at thinkingoutsidethebud.com forward slash newsletter.