Saul Kaye, Founder & CEO, iCAN
Saul Kaye is the Founder and CEO of iCAN and a true leader in the Israeli Cannabis ecosystem, as well as an industry advisor to the Medical Cannabis caucus of the Knesset. Saul is a licensed pharmacist and entrepreneur with both retail and e-commerce experience. He has founded multiple companies panning six countries across the US, Europe, Israel and Australia.
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers 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.
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[00:01:06] Welcome, everyone. This is Thinking Outside the Bud. I'm Bruce Eckfeldt. I'm your host. And our guest today is Saul Kaye. And he is a pharmacist. He's an angel investor. He's an entrepreneur, a cannabis expert. We're gonna find a little bit more about his background and the work that he's doing. He's CEO of ICan and also of Cannah Tech. And we're gonna learn more about both of those organizations, what they're doing with cannabis globally and within Israel. Fascinating conversation. I'm really excited about this. I think the international space is really one that doesn't get enough coverage and something that we think we don't talk about enough particular here in the US because we get very wrapped up in trauma in the US. But I'm excited about this. I'm excited to learn more about what's going on in Israel. As I think most people know, Israel has been really a leader pioneer in the cannabis space, particularly around research and the science of cannabis. So I'm excited to see what's going on there with that. Saul, welcome to the program.
[00:01:56] Thanks for having me. I hope that noise isn't too bad. I'm here in Malta at the cannabis conference, actually. Yeah, yeah. It's pretty amazing when you when you take a step back and look at the cannabis space, not just what's going on in Canada or the US, but on a global scale, which is what I've done from the very beginning. It's it's really exciting because it's happening everywhere. It is.
[00:02:16] And I mean, I just if you think back like five, 10 years, could you imagine that cannabis was going to be quite this level because it's really all over the place?
[00:02:23] Well, that was what, you know, I my a dream and my goal. I went to my first cannabis conference, I guess, six years ago in Colorado. There were maybe 100, 120 people there. And I walked in and I said, this is going to be big. And then I went to a j.p.'s in Vegas, which is where sort of the largest trade show happens. And, you know, they expect to get thirty five thousand people this year. So it really is starting to become something that's that's acceptable.
[00:02:48] We've we've removed a lot of the stigma around cannabis, which is fantastic.
[00:02:52] Yeah, we're still a little ways to go. But yeah, I think it's transformed as a from a social point of view quite a bit. You know, I think we're still working on politics and we're still working on kind of regulatory stuff. So tell us a little bit about your background. So originally pharmacist, how did you get into cannabis? How did you focus on investing in entrepreneurship? What's the story?
[00:03:10] So I took a friend six years ago around the world to try and find a therapy that was going to help him for his condition that he had. And we landed with cannabis and he'd never been, you know, something that I looked at from a business perspective. You know, as recreational available and very stigmatize
[00:03:27] And my sort of that was my light bulb moment where I saw this is really, really big. And I saw a fractured state by state program rolling out in the United States and in Israel, we only had eight growers. I started to look at why Israel is really special and it had a good name, but that the marketing around it was all wrong, that messaging was all wrong. And so we got into it really to, you know, as a society, my friend. And then I saw the business opportunity. I saw that the way this can help. But now my mother and my son are both taking cannabis for conditions and I'm a pharmacist. I've been trading patients for twenty five years. And the ability for this plant to treat conditions is is unbelievable. And we're only scratching the tip of the surface of what we're going to see. And that was what really sparked my interest
[00:04:14] Yeah. And tell us a little bit about, you know, being Israeli or looking, you know, focusing on the Israeli market. What I guess how is it different or characterize what it was like when you started and then how it's kind of transformed over the years that you've been involved?
[00:04:27] Sure. So when I started, there was maybe two cannabis growers, which then became eight cannabis growers. There really was only one brand that was well-known globally, which is to couldn't allow my company out of Israel. That means repaired. Well, there's been a lot of views around what they've been doing and there really wasn't any other news other than the Green Party. Let's treat the plants. I think around that the economic potential, the tax revenue, the Israelis crashing, not debates its health care system. That is a fantastic health care system. Everyone gets covered this social medicine, but they they owe about three billion dollars on it and there is no way out of that hole. So I approached the government saying that, you know, we could use the tax revenue from cannabis to supplement the whole that they keep digging with their social medical program. And it was rejected. But I started at that point to work with the government to hold their hand, showed them that this, you know, can move from an illegal plant to a medicalised clock in Israel. We're not looking at recreational cannabis yet.
[00:05:27] I think it's going to come in the next coming in like. But, you know, this was all pre-canned about before, you know, Cannabis 2.0. Oh. As we say. I like it. So, you know, there was a really I just wanted more patients to have access. We'd seen some amazing clinical trials. We did. I know we Israel. Professor Michelle Lamb, obviously isolated THC and CBD in 1962. He then went on to do all the clinical work around epilepsy. So izrael's had a very open framework for regulated clinical trials. They just saw this as a potential other Molla kill or set of molecules that should have a therapeutic value and they allowed clinical trials. And that sort of is what sparked Israel to be this leader in R&D in that we could do it, whereas in the United States it's still federally illegal to do it. And you can only get cannabis from one legal source. So now there's a few more like sciences coming on board that you can only get really, really bad weed from Mississippi University.
[00:06:28] You know, I know Sue Cicely's a very well known researching in the US, doing PTSD, and she's gotten a couple of videos where she'll show you the way that was available at that DEA FDA regulated market and it's not compatible to what's happening at the risk market. So I sort of stepped in in Israel to change the messaging, to bring Israel to the forefront, obviously with a business angle as well. I like business. I'm an entrepreneur since my early 20s. And I've I always worked with the regulator. I don't try and skirt the law. I try and get the law to make sense and help the regulator because they don't really understand. So we need to bring in some industry expertise, because typically regulators go straight and ask doctors and doctors know nothing about cannabis.
[00:07:12] Trying to bring a new voice to this industry. That's great.
[00:07:15] I know. I think that that kind of collaborative partnership approach with the regulators is kind of what we need. I mean, this whole thing is evolving so quickly that, you know, on one hand, we do need you know, we need wellness protection and, you know, making sure we've got good product and well tested and well, good quality product. On the other hand, we need to make sure we're developing the industry and putting in regular regulation that is going to help encourage proper or successful growth of the industry from a from a business point of view. Tell us a little bit about I can tell us about can attack. How did these come about? How do they relate and what are they focused on?
[00:07:46] Sure. So we started with can attack, which is our cannabis summit. It's sort of like taking Ted and TechCrunch and putting them together with a cannabis spin. So we started in Israel with a small event. We grew that, you know, to a very large event in Israel.
[00:08:00] And then we took a global because I'd always had a focus of a global cannabis industry, not a fractured, you know, single state or multi-state industry. And so we did it in Sydney, in Hong Kong and Panama.
[00:08:12] I loved it. You know, we go to the hard places where cannabis is illegal and we really spok the ecosystem along, then speak to the regulators that they've been having the right conversations, that we saw the law change in Australia after our conference and in Panama. And so we're rolling that out to global of that matter. The next one is kind of Cape Town.
[00:08:34] But they have not provided us an immense amount of deal flow in the cannabis industry from all over the world. So we started investing and we started an incubator where we had picked the best companies, the best teams, the best ideas, and we incubate them. What's unique in israelis' incubation is together with the government. So we tap into a whole bunch of non-dilutive funding, which is why so many tech companies come out of Israel, because the Israeli government essentially deals risks seed stage companies by putting in non-dilutive capital in order to really spark an industry. So Israel does about 400 million dollars a funding.
[00:09:11] Israel does 400 million dollars in startup funding and cannabis was allowed. They didn't say, well, it's an illegal drug. You can tap into that funding.
[00:09:20] In fact, Professor Mushu, lambdas initial funding came from the National Institute of Health in the US and the Department of Defense. So there is a whole bunch of unique capital out there that we tap into.
[00:09:33] Are you leveraging kind of the existing startup early stage ecosystem that Israel has developed or has fostered, or is this really a unique cannabis specific kind of focus for for Israel in terms of fueling the industry? And how much of this is just yet another industry that could, you know, launch successful early stage companies? And how much is this really cannabis focused?
[00:09:54] I think it's totally cannabis focused. Israeli smoke, a lot of weight on a recreational level. You look at it, it's a very stressful society. You work six days a week. We have a one day weekend. We have enemies all around us and all of us go to the army. So, you know, there's a high rate rate of PTSD. So they're already eating the that that sector. And it's an industry where you can make money and where there is development money to really start to be innovative and disruptive. So, you know, we tap into the other ecosystems of cyber. Water, agriculture and genetics, they all tap into cannabis. So there's already a robust ecosystem that is sort of pivoting. They have technologies to tap into cannabis capital, all because they want to be in the cannabis industry know and the ecosystem.
[00:10:43] I guess in terms of what you find you need to provide or what early-stage cannabis companies need. What is the ecosystem focused on? What are the benefits and areas that are trying to add value to these early stage companies?
[00:10:56] So, you know, across the whole value chain we've seen companies, but some of our key investments have been to a commodities trading platform that's anchored now by 44 countries. We have an ocular company that's doing it, delivery of cannabinoids into the eye. That's together with Israel was techni on that. My team and we work a lot with the institutions in Israel because that's how we tap into that massive pool of p_h_d_ brainpower. And Israel has the highest number of p_h_d_ per capita in the world. So it's it's pretty exciting. Yeah. So, you know, tapping into that existing ecosystem is is the driver that particularly we've got a lot of genetics, a lot of agriculture, precision agriculture. We've managed to grow all of our vegetables in the desert. And obviously, you know about the cherry, tomato and the small gambi that came out of Israel, that unique grape genetics that have been developed so that that already exists. And so when you put a spark into an ecosystem that already has some energy, you sort of get a little explosion. And that's what happened a few years ago with cannabis in Israel.
[00:12:04] Yeah, it's interesting, just because your background is really background in not only just kind of tech, you know, tech development, high tech development, but then, you know, agricultural science and kind of the challenges of being able to grow crops in a fairly harsh conditions.
[00:12:17] You know, it's an interesting kind of mash up of, you know, technology and history and expertise. I can see why that would have been some of the challenges as you've looked to incubate this industry in Israel.
[00:12:27] What what are some of the areas that were kind of against you or that you find are a bit more of a challenge that might be in other parts of the world?
[00:12:33] Capital is always a challenge, especially in seed stage. So, you know, until I got participation by the Israeli government, it was harder to raise capital because the opportunities are much quicker. If you open a retail dispensary in Massachusetts, however, you're going to be a retail dispensary in Massachusetts at the end of the day, not a big pharma company, you know, backed by intellectual property. So that's always been a challenge. Our biggest challenge is finding the best tepes.
[00:13:01] There's a lot of people with great ideas and a lot of passion. And this is a passion industry. You know, a lot of people came to the industry because the plant has helped them in some form in their life. And so you put that together, it's it's really hard to weed out the ones that are just passionate to the ones that know how to operate a business. And if you're looking at, you know, we probably see 30, 40 day decks a week across the world. And you're talking about companies that are predicting 40, 50 million dollars a year this year, next year. Are those people really able to run 50 million dollar companies? Yeah, and that's always gonna be a challenge. But they are the is is researchers, academics who are coming into cannabis really just want to do academia, which is there is no necessary commercialization strategy on the other side, you know, and always dealing with someone who's I'm all in 90 percent there and I just need to take one or two more things and then I'll get there. And they're always, always tinkering, always fixing, but never actually delivering, you know. And I can we try and deliver at 80 percent and we usually hit 95, 96 percent. But you've got to consistently deliver. You have to show, you know, the way the market. You can't just have an idea and a piece of tape. I really at this stage in the cannabis industry, you have to have a proof of concept, which is at least a, you know, a product or a brand or something that has got some traction. And then I think the capital, you know, comes easier.
[00:14:35] What have you noticed internationally? I'm just curious. You've been you've been traveling the world quite a bit, talking with folks in different countries. What are the trends that you see? What do you think is kind of coming down the pike in terms of countries that are going to be embracing, adopting kind of pro cannabis policies, laws, economies? What's your what's your view globally at this point?
[00:14:55] It's mostly driven at this point by CBD and hemp. Obviously, it's an easy entry point. You know, no THC, non psychoactive cannabis is is something that's getting easier to handle around the world, getting to know conformity. You've got 1 percent THC limits in Switzerland and 0.2 percent in Europe and 0.3 percent in the United States. So that's going to make global trade somewhat more difficult, which means we're moving really to an isolate world that isolate cannabis, in my opinion, is going to become an FDA controlled. And this is going to go around so that those are sort of the trends I'm seeing everywhere. Slow regulation is nothing moving quick enough, the industry moving faster, which is not always a good thing. Look at a fast moving vaping industry calls over a thousand people to be hospitalized. So cautious is sometimes OK. However, you know, this is a medicine to people and we want to get it into their hands as quickly as possible. So those are the challenges I'm seeing everywhere. But if we're talking about where I'm seeing change across all the nations of Africa, Asia, Thailand is coming online. We're looking at China, obviously large head plays, but there's already THC conversations happening in China. And those are the really big markets. You know, everyone's talking about the German market from AIDS, a national perspective.
[00:16:18] There everyone in Africa is planning to export their their products. So Germany's going to have a collapse of cannabis.
[00:16:26] But everywhere else needs cannabis. So, you know, once we've got some unified standards around the world and that, you know, my GMP in Israel is the same as the GNP in Europe, then we'll really start to see some global transactions.
[00:16:40] Now, I'm curious on the on the deal side, the deal flow that you're seeing, what any interesting trends or parts of this of the cannabis sector that are generating interesting ideas or interesting businesses? And what are you noticing in the companies that you're either seeing in the pitch dark or that you're funding or that you're seeing out there on the market?
[00:17:01] So like I said, if you're a tech entrepreneur, I focus on the tech side. So we don't look at vertically integrated companies who are going public on the Canadian Stock Exchange. So that, you know, takes out a whole bunch of noise. So we're looking at delivery systems, clinical trials in unique conditions like A.D.D., Alzheimer's, dementia. I don't want to see decks where you're telling me you're going to do a study on PTSD. We already know cannabis works for PTSD. And I look at this as a very much a generic drug market. I'm a pharmacist. I've built drug companies, retail pharmacy companies, online pharmacy companies. And cannabis is a generic right. So intellectual property has to come from the other things around the plant or the genetics, which is delivery and dosage.
[00:17:47] And still today, that's the biggest problem from a patient perspective is I got cannabis. I used that. I usually took too much or I didn't take enough and I didn't like the effect and that's it. I'm never using cannabis again. It's like saying I went and tried an antibiotic once and it didn't work. Well, maybe need to try a different antibiotic. Right.
[00:18:06] So, you know, being a pharmacist, having that experience is is is all helped me to to hone in on really what what is a differentiator in the market. And that's what we focusing on investing in.
[00:18:19] So madness, so much of it. It's fantastic. New vape devices, new delivery, new oral delivery systems. And then how are these clinically trialled or marketed so that they can actually get to the hands of the patient? Because at the end of the day, you can have a brilliant product with zero distribution, and that's not going to work.
[00:18:38] So, you know, we try and look at the holistic point of view and then where do you operate and how do you operate becomes very important.
[00:18:46] Now, it seems like there's I mean, the big things that I've noticed as this industry kind of matures is the kind of the need for fairly sophisticated supply distribution systems. You know, how do you actually deliver a quality product to the market on a consistent basis to the level of demand that is out there? And then the whole kind of brand aspect of how do you create real brands that consumers are going to identify with and be able to understand what the product is, what the benefit is, what the application is going to be, and and addressing these different markets, because what's your what do you notice in terms of the companies that are doing either of those particularly well, either from a kind of a supply distribution model, figuring that part out or from the brand point of view, actually developing segments, developing the market and market segments and creating brands that are going to address the needs of those those different groups of people.
[00:19:37] It's really tough follows at a conference in Santa Rosa in California.
[00:19:43] And there was a brand conference. And really, when you start to see that as a breath's and grab some of these these brands that are coming out and, you know, there's two, three typical brands, styles as that, you know, the very California you look and there's the sort of like brass knuckles, very, you know, Sons of Anarchy. Right. And it is the most sophisticated women's brands. And your you know, your cosmetics, there isn't really all that much that differentiates across that whole spectrum. So it's a really does come down to distribution. How many people are you getting your product in front of? And then you could create a beautiful product like a lol's pre rolls. Right. Fantastic product. Really well-designed. But supply chain problems has caused them to not have a great following where, you know, loyalty becomes an issue because I want the same thing every time you feel supply chain can't deliver that your product is going to be affected.
[00:20:42] So it really, really does come down to branding and distribution and making sure you've got a solid supply chain. You know, because that if you'd lose your your one supplier of your high quality extract and you have to move to someone else, it will affect the flavor and the taste and your customer ultimately will know that. So, yeah, we're also starting to see a move, I guess some more conscious cannabis companies, you know, with social equity portion, with some form, it gives back, you know, like Toms Shoes did and things like that. So that's an interesting little thing that's happening as well.
[00:21:16] Yeah, I think there's some kind of the segments that are developing are fascinating. And then the response, you know, how all companies are approaching.
[00:21:23] I mean, you know, marketing to, you know, someone who's been using cannabis for 30 years, you know, recreationally is very different than, you know, trying to help someone who's 65 and dealing with, you know, ailments and pain issues and things like that. It's just it's such a radically different market. But yet we're basically using the same product in a lot of people. It's kind of like taking the same product and trying to pitch both groups as doesn't seem to be, you know, it's going to have limited effectiveness. And I think that whole kind of development of segments is fascinating. Any segments, any sort of cannabis using segments or parts of this comment that you see kind of up and coming or more interesting from who who you're trying to address or who you're trying to provide a value proposition to?
[00:22:03] And some of the companies you've seen, I think the baby boomers, the you know, the recreational market is a millennial driven market. The medical market is driven by yours and my parents, you know, who doesn't suffer from sleep issues, pain. Not to mention, you know, major catastrophic issues that they often have so that they're the biggest users. And I think if you look at analytics coming out of the strong states, over 50 percent of people present first time for sleep disorders. So, yes, we've got the leash medicine right now where we're helping lots and lots of people with epilepsy, but we're helping, you know, possibly millions of people with sleep disorders. So, you know, I think that's the biggest segment. It's our parents.
[00:22:45] Yeah, I agree. It's fascinating to see you kind of come online number maybe eight years ago, you know, talking, talking to about cannabis to people over that generation and the stigma that was there. You know, now that now they ask me if I know someone who can get their son or their daughter a job. That's right. And so I switch on kind of the perception of it. Tell me a little bit about the investments that you're making and interested in and how you're set up, if you know what. What kind of companies are you primarily focused on? How does your investment structure work? What is that ecosystem look like? Tell us about how how you're kind of structuring that and what you're hoping to achieve.
[00:23:22] Sure. So we've made, you know, small to large investments anywhere from fifty thousand a hundred thousand dollar checks up to millions of dollars. We've created a network effect with Kabateck. So we have, you know, thousands of alumni that have attended events. These are usually people who are interested in the industry. So we pull together and syndicate deals through that engine.
[00:23:45] And then my heart really does lie with the R&D side, where we tap into the academia that's going on in Israel and find those really early stage companies that we go all the way from ideation through to products. And we've got a strong partnership network of for me ladies, manufacturers across the world so that our supply chains can always be very robust across all the companies that we're investing. So, you know, trying to build a platform with a lot of synergies in the companies that we both invest capital in, all that we incubate as well as the other companies that we invest in to provide an infrastructure for those startup companies to roll their products out on a global scale. And we recently announced a partnership with a California manufacturer who's going to be dropping Israeli products into shelves in California, coming again back to the distribution. Wow. And really nailing how do we do tech transfer for the cannabis industry from Israel. But ultimately, we are going to have this happening in every country that we operate so that we can take African innovations to the California market and African brands and Latin American brands and European brands. And we look at sort of the channels the opposite way. Everyone's trying to get products into Germany. I want to get the Japan brand out of Germany into Mexico as an example. So trying to build that sort of infrastructure, both in investments in companies that that we believe in, you know, strong players in the Africa continent, Latin American, you know, U.S. plays so that when products are ready, we really do have the ability to take them and commercialize them. Cross the board. That's interesting. So that's yeah, that's us.
[00:25:31] It's almost like having a contract manufacturer who can, you know, in the end, the geography that that's gonna you're gonna have production and distribution in and then then figure out how to take the different IP and brands and processes and things that are being developed from an IP point of view and figure out how to get them into the facility to actually execute on the product. That's a really interesting model. Interesting challenge.
[00:25:53] Yeah. And you know, not all brands work in all locations is Starbucks land that, you know, very quickly where it didn't work in Israel at all. It didn't work in Japan initially, you know. So there isn't nuance. We just try and speak that language and understand, you know, the differences and really try and in and take the winners. And with, you know, all these CEOs or investment houses, it's it's our ability at this point to pick the winners in this industry. And so far, we've we've got a pretty good track record and we hope to continue building it now.
[00:26:27] Yeah, that's great. So take us out. You know, a year or two here, what's in the strategic plan for Icahn for a can attack? What do you have coming kind of coming down the roadmap of of initiatives, plans. You know, conferences, things like that. What's what's on your what's on your backlog of things you're working on executing?
[00:26:44] So like we've done in the past, where we go, where it's hard and where it's needed. Our next major challenge is China. We're doing our conference in June 2020. And the Chinese market is just so massive as a local market. Never mind that they, you know, produce 90 percent of the hand in the world and we'll become a net exporter as well. So that that's something it's very exciting to tap into these new ecosystems. You know, obviously with it, Chad, Chinese, U.S. cool down. That's going on. We'll see how that all plays out. But you know the rest, the world's still doing business with China. And then, you know, continuing. Our goal is to get 12 new companies in the next year. We have our cohorts starting in January. So we're always looking for new technologies that are looking for that global strategic help that we can provide. So I'd love to hear more and see more. But this is this is the plan. I am planning something along the lines of what I built with eye, candid view, psychedelic world. Interestingly, the criminalization that has happened in Colorado and Oakland and Oregon is on its way. And they've been Netherland's already has a deep cream. So I think cannabis is provided somewhat of a framework for the decriminalization and possibly legalization of mushroomed psilocybin, LSD, et cetera. So we're definitely looking at that space. And I think we'll see something coming out very soon or at that.
[00:28:10] That's exciting. Yeah, it's that's a kind of fascinating, you know, extension of what's happening in cannabis. So, you know, I'm curious to see how that plays out. Obviously, a little different kind of historical background and social political background. But, you know, fascinating to see how that that's kind of paralleling at some level to what's been happening in cannabis. And to tell us more, if people want to find out more information about you, about I can about can attack, what's the best way to get that information and find out more?
[00:28:34] Well, I think if you do a Google search for Israel, cannabis, I can usually comes up pretty much on top. So Israel Dasch cannabis dot com is our website cannot dash tech. SEO is our conference Web site. We'd love for you to join us at one of our next events there in Israel. Cape Town, Davos at the World Economic Forum or China. And I look forward to continue building a global cannabis ecosystem.
[00:29:00] Perfect. I'll I'll make sure that those links are in the show. Notes people can click through, get that information. So this has been a pleasure. Good conversation. I'm fascinated about by what you're doing. I'm excited about the international side of this. It's been a pleasure to speak with you. Thank you for taking the time.
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