Cannabis Wealth caught up with Cannaray CEO Scott Macguire to hear about the company’s plans to expand its medical cannabis division following a £10 million funding round earlier this year.
In April this year, Cannaray closed a £10 million funding round that included a significant investment from Channel 4 Ventures. Cannaray believes the investment was a first of its kind in Europe for a major TV broadcaster.
“We were delighted to close on an amount above our initial targets, considering the difficult capital markets,” Cannaray CEO Scott Macguire told Cannabis Wealth.
“It was a great sign of confidence in the company to see existing investors come back in for this round as well as welcoming major new investors such as Channel 4 Ventures. TV advertising has taken Cannaray to new heights, so we’re thrilled to be able to partner with Channel 4 to continue to drive rapid growth of the brand.”
Other participants in the round include Three Bridges Private Capital, Alpha Blue Ocean and a mix of new and follow-on private investors.
Cannaray’s group of companies spans both medical cannabis and CBD wellness brands. Its CBD brand is already well-established in the UK. In the summer of 2021, Cannaray launched the UK’s first major brand campaign for CBD on TV. In addition to a high-performing B2C site, the brand is also stocked on Amazon and in over 1500 retail outlets across the UK including Tesco, Superdrug, ASDA, Waitrose and Harrods.
Now, the company is turning its focus to medical cannabis. The majority of the recent raise will be channelled into Cannaray’s medical division Therismos as it seeks to scale and expand its footprint in Germany and the UK.
“Our aim is to become the leading medical cannabis player in Europe,” Macguire said. “We have significantly strengthened our position over the last year to cover supply, distribution and prescription of cannabis-based medical products (CBMP) across Europe.”
In Germany, Cannaray recently embarked on a “transformational” partnership with Alliance Healthcare Deutschland – a division of Walgreens Boots Alliance – to help establish the brand’s presence in the German market.
The German federal government announced it would be putting plans in motion to legalise adult-use cannabis in November 2021. After a number of delays, Germany’s health minister Karl Lauterbach announced that the legal process for cannabis legalisation would begin this summer.
“[Germany] is the largest CBMP market in Europe and where AHG has a significant footprint,” Macguire added.
“Our medical cannabis division Therismos will be activating the partnership with AHG with the aim of becoming one of the leading providers of CBPM in a market growing at 13 per cent year-on-year.
“Our pipeline plans include product innovation, new presentations [and] galenic forms and novel technologies that will step change a market that is in its creation phase.”
Cannaray is also looking to tap into the medical cannabis sector in the UK. While only 30,000 patients have access to a medical cannabis prescription currently, there is huge potential for growth with an estimated 1.4 million people self-medicating with illicit cannabis, according to YouGov statistics.
The firm will soon be opening a medical cannabis clinic with the help of leading pain specialists in the UK.
“The UK is our second priority since this market represents the greatest growth opportunity in Europe,” Macguire said. “The UK is a small market relative to Germany and even smaller still when compared to North America.
“The prevailing challenge in the UK is the cost of the medication, as the NHS does not cover the cost of the medication. Estimates put the cost per patient per year at over £3,500. There will be a cap on the growth of CBPM in the UK until the NHS covers the cost and GPs are allowed to prescribe.
Macguire said Cannaray is now exploring additional acquisitions in its efforts to position the company as a leader in the European medical cannabis market.
Canopy Growth appoints industry veteran Christelle Gedeon as chief legal officer
Gedeon’s cannabis and commercial expertise will further Canopy Growth’s strategy for North American cannabis leadership, the company said.
Christelle Gedeon is one of Canada’s Law Department Leaders of the Year and formally served as chief legal officer at the international cannabis firm Aphria.
Canopy Growth has appointed Christelle Gedeon as its new chief legal officer. Listed on the Legal 500 GC Powerlist in 2020 and the 2019 Canadian General Counsel Awards Tomorrow’s Leader, Gedeon is a commercial lawyer and strategist with more than a decade of legal and strategic experience.
Most recently she acted as chief legal officer and corporate secretary for The Metals Company (TMC). Prior to this, she served as the chief legal officer and corporate secretary at Aphria Inc, where she oversaw the reverse takeover of Tilray.
“Christelle is a proven leader in the legal and cannabis industries, and we are excited to have her join Canopy Growth as we continue to build the leading brand-driven cannabis company in North America,” said David Klein, CEO of Canopy Growth.
“As a company, we have set clear priorities including achieving profitability while advancing our competitive positioning through a premium focus in Canada, high-impact CPG brands and the continued growth of our US THC ecosystem. I am confident that Christelle’s commercial and legal acumen will be key to further bringing our strategy to fruition.”
In addition to her expertise in the cannabis industry, Gedeon brings experience with complex regulatory structures, intellectual property management, corporate governance, government relations and strategic acquisitions.
She has also had a direct role in the completion of more than 50 mergers, acquisitions and strategic investments including during her time as a partner at Fasken, a leading Canadian law firm, where she advised life sciences clients on commercial, regulatory and government affairs matters.
Gedeon received her Bachelor of Law from McGill University and is a member of both the Ontario and Quebec bars. She is also a registered trademark agent and holds a PhD in Clinical Pharmacology and Toxicology from the University of Toronto. Her appointment to the role of Chief Legal Officer at Canopy Growth is effective immediately.
‘The hemp revolution has already happened, now it needs reigniting’
Hemp fibre produces some of the strongest and most durable materials in the world and absorbs more carbon than pine trees. Hemp Farms Australia believes interest in the plant needs reigniting.
Cannabis Wealth sat down with Lauchlan Grout, co-founder of the Australian industrial hemp farming agribusiness, Hemp Farms Australia. The company was launched in 2013 by Grout and his childhood friend Harrison Lee to cultivate, process and sell the primary components of industrial hemp.
A dedicated seed supplier, Hemp Farms Australia was one of the first players in Australia’s hemp industry. The company specialises in variations of the plant that perform well in sub-tropical environments, a rare thing for a plant that originated in the icy tundras of Siberia.
Now a leader in hemp seed genetics, the company supplies seeds for growing grain for food and growing fibre for animal bedding, hempcrete and bioplastics. Grout talks about his passion for hemp and its potential to tackle the growing threat of climate change.
How did you get into the hemp sector?
After school, Harrison and I both went to work for his family in their abattoir here in Brisbane. They supply a couple of big grocery stores and supermarket chains with beef. We started on the kill floor and then went to the boning room. That was about five or six years of work experience in the abattoir as well as out on their farm. We learned there are so many facets to a supply chain.
At the time, hemp was being brought up a lot as this wonder crop; there were 70,000 uses for it apparently, but that just didn’t make sense because we hadn’t seen it anywhere. If there were so many uses for hemp, why wasn’t it being used?
So we dug deeper into that side of it and realised that all the different prohibition laws and the fact that hemp was so closely related to cannabis meant both of them, in Australia and many parts of the world, were illegal to grow even as for food or fibre.
But not many people realise that back in the day, the British and Russian naval fleets were all kitted out with hemp sales and hemp ropes because it was the most durable fibre in the world. All that knowledge and all that belief and all that industry were lost so we saw it as an opportunity to bring back something that could actually have a great impact on people and the environment.
Why is sustainability so important to you as a company?
The Earth is not heading in a nice direction in terms of the environment and climate. The climate extremes that we’ve seen in the last ten years here are comparable to what farmers have spoken about over the past 60 years. It seems like the events of those 60 years have repeated themselves in the past ten but double the scale and in a harsher fashion.
Farming is not easy. You have to budget for one in three crops to fail; it’s sometimes a business that can make you extremely depressed and that’s why so many farmers kill themselves; it’s terrible. They just have no water and if you have no water, you can’t do anything.
If I can do something that would not only help potentially reverse climate change or at least stop temperatures fluctuating so heavily by reducing the amount of carbon in our atmosphere, I want to do it.
Hemp is the highest carbon sequestering plant and one of the most sustainable protein-producing plants in the world. Hemp can reduce the amount of carbon in our atmosphere on a scale 40 times larger than a pine forest. Not only does it suck out the carbon, but it also locks it in the plant material so you can then build a car with that and produce fuel. Henry Ford built a car back in the 1940s out of hemp plastic that ran on hemp biofuel. All this stuff has been around but it just needs to be reignited.
What are some of the biggest challenges you have faced on your journey running Hemp Farms Australia?
The first five years were challenging but also hopeful. Every mistake that we made hadn’t been made before because no one else had stepped that far yet. In other established industries and markets, you can read books or you can speak to people to find out what not to do, whereas in this sector there was none of that.
For example, nobody knew that you have to store industrial hemp at a certain temperature and in a certain humidity once you’ve harvested it, otherwise it will go mouldy within two or three days.
With our first crop, we harvested 40 tonnes of seed, we put it in an aerated silo which had heaps of fans running through it, but it was partially in the sun in a big metal container. We came back to check on it two days later and you could smell the mould from where we parked hundreds of metres away.
There were 40 tonnes of seed there worth every bit of $10 a kilo. That’s $400,000 worth of seed.
How have things changed since the early days of setting up Hemp Farms Australia and what have you learned?
We’ve got great advisors now and our key cornerstone investor is a very wise and smart agricultural businessman, so the last three years have been a lot different to the previous five.
I’ve learned that if you have something of value, then it’s worth risking a lot more than you think you would ever risk. I was questioning myself in the early days. I was doing it because I believed it will have a good impact on the world and the environment and the people living in it, but is it going to make me any money? Am I going to be able to build a family off of this? Those things were running in my head so much because things were ticking but they weren’t ticking the way we thought they would.
But I think the biggest thing I learned is If you believe something and you know in your gut that it will happen or it should happen then do not stop; the maths doesn’t need to line up. If money is the only thing that’s stopping you from keeping on the grind, then you shouldn’t be grinding it.
You run the business with a close school friend. How do you find running a business with one of your best mates?
Harrison and I have been very close friends – pretty much best friends – since year seven at school. We weren’t very fond of each other to begin with. He was very much into gaming. I was very much into sports. But he taught me the world of gaming and I taught him the world of sport and we became very close friends after that.
Never ever get into business with your best friend is what everyone told us. I will admit, we’ve been through some pretty bad times, to the point where we were not talking to each other, but you get over it, you harden up and you laugh about it.
We suddenly just said to each other ‘business is business and friendship is friendship’. We both have to pull our weight and we can’t be bickering at each other just because we know each other in and out.
Why are you proud to be part of the hemp and cannabis industry?
Not only can you heal people medicinally, but you can also house people through the fibres, you can clothe people through the fibres. There’s so much that hemp can do for people. Hemp revolutionised things back in the day, it’s now about reigniting it to a level where we can make a change.
Gerardo Gorostiza joins team at Linneo Health
Linneo Health has appointed Gorostiza as chief financial and strategy officer.
Gorostiza will be bringing experience of corporate finance, strategic planning, business transformation and corporate development to the Linneo Health team.
Medical cannabis research and cultivation company Linneo Health has welcomed Gorostiza as Chief Financial and Strategy Officer.
The company has stated that Gorostiza possesses a track record of success leading the financial and strategy functions of a number of multinational businesses, both private and publicly listed.
Linneo Health CEO, Don Bellamy, commented: “We are delighted to welcome Gerardo to Linneo Health as chief financial and strategy officer.
“He brings a wealth of experience and knowledge, and his strategic mindset and leadership skills will be invaluable to Linneo as we continue to build on our success and growth as the leading provider of medicinal cannabis, for the benefit of patients.”
Gorostiza’s previous roles include Uralita, Adveo and Grupo Costa Food, as well as having worked as a consultant with PricewaterhouseCoopers.
Most recently, Gorostiza was CFO and subsequently CEO of Juan Luna, a leading Spanish food processing company, where he played an integral role in the professionalisation of the company and its subsequent sale to a top industrial player.
Gorostiza holds an Executive MBA from the IE Business School in Madrid, Spain, and qualified as an Industrial Engineer with the Universidad del País Vasco, Spain.
Gorostiza commented: “Linneo Health’s fully integrated platform, enabling the research, manufacture and supply of the highest quality medicinal cannabis, puts the company in a prime position to grow at scale as this market matures.
“I am looking forward to working with Don and the team to maintain Linneo’s leading position and continue its expansion.”
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