Touring Tilray: Navigating Canada’s New Marketing and Selling of Medical Cannabis

Editor’s Note: This post is brought to you by Cynthia Belaskie and Lucas Richert. Richert is a lecturer in history at University of Saskatchewan and Belaskie is a senior advisor at McMaster University. Enjoy!

We weren’t left to wait in the B.C. rain. After presenting our IDs at the security station outside Tilray’s medical cannabis facility in Nanaimo, and once we were confirmed as being on the official “list,” it took less than a minute to enter the recently constructed $30 million, 65,000 square-foot facility.

There were four of us taking the tour of Tilray, one of Canada’s licensed producers of medical marijuana. We were part of a SSHRC-funded conference in the history of drugs and alcohol at Vancouver Island University, and this was one of the activities available to us as participants in the event.

GNM
Philippe Lucas VP of Tilray a medical marijuana business is seen here in the grow room in Nanaimo August 14, 2014. (John Lehmann/The Globe and Mail)

Our guide was Phillipe Lucas, Vice-President of Patient Services at Tilray. He walked us through the electric gate and led us into a cozy holding room filled with bottles of San Pellegrino, a weigh scale, and a flat screen TV flashing images of the building’s construction. A former city councilor in Victoria, an expert witness on marijuana in Canada, and one-time dispensary owner, Philippe was handsome. He spoke quickly, laughed easily, and possessed an air of mischief, too.

Over the past ten years, Phillipe has published peer-reviewed articles on cannabis’s therapeutic effects on patients in top academic journals around the world. In particular, as a PhD student at the University of British Columbia, he has been working on a concept called the cannabis substitution theory, which seeks to understand the behaviours and choices of marijuana-using patients in the medical marketplace. Besides this, he helped co-found a Canadian chapter of the Multidisciplinary Association for Psychedelic Studies.

We deposited our belongings on the leather chairs in the cozy waiting room, leaving our phones and cameras behind, and Phillipe explained the building was a Level 9 security complex. Level 10 was reserved for nuclear products and the facility has been described by Charlie Smith as “a vault wrapped by Fort Knox wrapped in a castle.” No pictures allowed. No videos, either.

With security passes on display around our necks, we set off. We engaged in an intricate dance as we tapped in and out of each fortified and sanitized room. Our graceless choreography, made ever more awkward as we stood outside each room and robed and disrobed to prevent contaminating the delicate crops, was all caught on internal security cameras – lots and lots of cameras, in fact. It is understandable, isn’t it? Just imagine what would happen if this stuff made its way on to the streets.

It has become clear in the past few months that we’re in the midst of a pot predicament. Canadian citizens, health authorities, law enforcement officials, and elected representatives have a lot to ponder. Public sentiment seems to more or less favour decriminalization and even legalization, depending on the survey. On February 29, 2016, the Globe and Mail reported that a majority of Canadians believe pot should be legal. According to a recent Leger poll, not only do 86 per cent of Canadians support regulated access to medical cannabis with physician support, 76 per cent believe that health insurance companies should cover the cost.

During his 2015 campaign, Prime Minister Justin Trudeau promised to move forward with legalizing marijuana. By December 2015, following the election, the Trudeau-led Liberal government described marijuana legalization as a priority during its first “speech from the throne.”

Months earlier, the Supreme Court enlarged the definition of medical marijuana – in fact, just weeks before the election was called. The Supreme Court ruling meant that the legal restrictions on extracts and derivatives were gone. Brownies, cookies, teas, chocolate bars, and oils, among various other products, can be substituted for dried cannabis. The Federal Health Minister Rona Ambrose scolded the Supreme Court and told the press that she was “outraged” by the ruling. “Let’s remember, there’s only one authority in Canada that has the authority and the expertise to make a drug into a medicine and that’s Health Canada,” she said during a news conference.

A day after the Supreme Court decision in June, it was announced that Bedrocan and Tweed Marijuana, two of Ontario’s largest medical marijuana firms, would amalgamate in a roughly $60-million deal. Bedrocan possessed strengths in clinical research, while Tweed’s consumer-oriented assets made the deal a good fit. As reported by the National Post, the merger was a “game changer” and would create a “dominant domestic player and reshape the fledgling industry.”

It was immediately evident that medical cannabis was very big business for Canada. As the CEO of Tilray, Greg Engel, has written, “there is enormous potential for Canada to correct the harms caused by cannabis prohibition, generate meaningful tax revenue, protect children and establish this country as a global leader in this rapidly emerging industry.”

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Tilray Medical CannabisPhillipe Lucas began our tour in Nanaimo above the “vault,” the secure space where the packaged medical cannabis is stored and, at any given time, home to $35 million worth of product. He told us about Good Production Practices (GPP). He walked us through the process of cultivation and processing, and then showed us a massive 30-foot flowchart that colourfully displayed the operations of the facility: from germination through to harvest, testing and packaging.

It was show time. We were given smocks, hairnets, gloves, and booties to wrap around our footwear before entering a grow room. All of this gear had to be donned while standing in a small, yellow square (clean zone), without touching any unsanitized ground. Then, playing a modified version of Twister, the five of us, including Phillipe, who insisted on merrily hopping onto the sterile yellow square from five feet away, each tapped our cards to the security monitor.

Upon entering the White Widow room, we were struck by the warmth and intense brightness of the room. It was sterile and aromatic. We were like Matt Damon in The Martian, tending to a futuristic moon-based grow-op. The byzantine fertigation system connected filtered water pipes on the wall to each and every separate plant in the chamber. These were the internal arteries of Tilray’s business and we were struck by the absolute lack of dirt.

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In July, 2015, Health Canada gave growers the green light to begin producing plant-based extracts. Liquids, essentially. Quick off the mark, Tilray announced in early October that it had a broad-based line of 20 cannabis extract products awaiting Health Canada’s approval and ready to launch. These included oils in liquid form, drops, gel caps and a topical preparation for certain skin conditions.

Tilray’s upward trajectory, however, may not be secure as Phillipe suggested. In June, Tilray, like many of its competitors, was hemorrhaging money. It was forced to lay off a substantial part of its workforce, approximately 60 employees – and this was likely due to the rise of dispensaries in B.C. In many cases, patients “don’t want the hassle of seeing a physician” to get an authorization form. Neighborhood ‘mom and pop’ dispensaries that are opening almost daily across the country are often not as stringent as Tilray on ensuring patients have jumped through the required hoops.

More than that, patients who promote dispensaries suggest they don’t want to have to wait for their medical cannabis to be shipped from a distant location. Instead, they want a face-to-face interaction. As with traditional pharmacies, they want to build a level of trust in their dispensers’ expertise and advice. They want to be able to see, touch and smell the product before investing. They want to be able to complain if it doesn’t live up to its claims. This is an experience that just can’t be replicated when shopping online

Leafly.jpgOne response to these market pressures has been the development of Leafly, a mobile app designed for customers to review the various strains (all of Tilray’s strains have maintained their street names so that the transition from illicit to legal purchasing is a smooth one for the patient). Acquired by Privateer Holdings, Tilray’s parent company, in 2012, Leafly considers itself the “world’s cannabis information resource.” Much like TripAdvisor or Yelp provides reviews about tourist traps, restaurants and hotels, Leafly gives information about which strains best target particular symptoms. It provides directions to local dispensaries, links to cultural and political articles in the world of pot, and allows users to compare prices.

Privateer Holdings, as a private equity firm, has expanded since its inception in 2011. Based in Seattle, Washington, it raised $75M in funding in April 2015. To date this is the largest private capital raise in the legal cannabis industry. Privateer owns Tilray and Leafly and recently it acquired Marley Natural, which was run by Cedella Marley (the famous reggae musician Bob Marley’s daughter).

Marley Natural has aspirations to be the world’s global cannabis brand. Reaction to this was not all positive and some commentators called it a “cynical, money-generating move on the part of his estate” and an effort to turn Marley into the “Marlboro Man of Marijuana.” For Cedella, she noted that “My dad would be so happy to see people understanding the healing power of the herb.”

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Phillipe, one of Canada’s most influential medical marijuana trip advisors, led us back to the waiting room after a fast-paced, hour-and-a-half of conversation inside the Tilray plant. He had just shown us the packaging and shipping room, where the medicine was divvied up and mailed out. By this time we were light-headed. Was it the smell? The lights? The staggering amounts of money being discussed?

Having collected our belongings, the entire group cracked a bottled water and plopped down on leather chairs, waiting for a cab to take us back to the hotel. As a group, we remarked about the interesting times we live in, and how medical marijuana was such an ideal topic to explore the evolving Canadian medical marketplace. Phillipe went a different route. He guided the conversation back to patients, and the help they might receive through the product. At Tilray, pot is medicine.

Yet, at its sister company, Marley Natural, pot is a recreational drug that is pleasurable and promotes a peaceful lifestyle. And over at Leafly it is just another commodity to be rated and reviewed by users with interesting aliases.   Pot has a long and subversive history that evidently will not be washed away by changes in legislation and sterile high-tech greenhouses. But does anyone really want pot to be totally clean? It probably wouldn’t be very good business if it were.

Phillipe’s phone buzzed, signaling our cab had arrived. As the electric gate rolled open, we expressed how others at our drugs and alcohol conference had missed out on an eye-opening trip. “Where did they go, instead?” Phillipe wondered and we indicated that local pubs were the answer.

“Ah, you can get a beer anytime,” he chuckled as the gate closed behind us.