Cannabis is a growing market in Canada.
From the dwindling stigma to the ever-expanding patient community, a lot has changed since medical cannabis was legalized in 2001.
Green Relief sat down with John Prentice, CEO of Ample Organics, to discuss some of those changes, and where the Canadian cannabis market will go from here.
Green Relief: We’re here with John Prentice, CEO for Ample Organics. For those watching and listening to this as well, can you kind of explain Ample Organics to the people?
John Prentice: Of course, yeah. So, Ample Organics is a software company, first and foremost, and what we do is we create software for the legal cannabis industry here in Canada and internationally. So, today we represent clients across five different continents, and we help them with compliance and business process within their organizations.
JP: So, that’s, you know, simple things like tracking the plant inventory, to the manufacturing operations within the facility, and being able to create a system of recall so that any product sold to a patient can be brought back in the event of pesticide contamination or any other quality issue that may arise. And beyond that, we add a whole other layer in terms of E-prescribing and E-commerce, and all these different pieces to help facilitate the actual business components of operating a cannabis business.
GR: So, how long has the company been around for?
JP: Sure. So it started back in 2014. My adventure started in 2012 in fact. I met a girl, moved to the city, I moved in with her, but didn’t have a job. And so she sent me to work with her brother to get me out of the house. And of course, I didn’t get paid for that. But during that time a guy came in and said, “Hey, the federal government is gonna let us grow cannabis.” And we sort of laughed, and didn’t believe him but then he produced some paperwork from Health Canada and this was this new regulation called the Marijuana for Medical Purposes regulations, or MMPR. So we responded. We wrote an application. I come from medical devices background so I had a little bit of familiarity with regulatory applications. And ultimately that was the very first license issued by Health Canada, and that was the Peace Naturals project in December of 2012.
JP: In 2013, I’d moved on to broadcasting. And I was watching this business become more and more exciting. I was thinking about it all the time. I was bored at work because I was thinking about weed. So I made the jump. And so I thought, “let’s go start our own facility.” There were 1600 applications in the queue at that time and we really didn’t want to be just one of the herd.
JP: But what we’ve done for Peace, is we’ve sort of advised them on record keeping and compliance. I’m an IT guy by background and I realized there was a real need for software. If these 1600 companies are going through the process, they’re all gonna need regulatory software to operate on. And that was the impetus for starting Ample. So we’ve been around since 2014. It started with two guys at my dining room table. We’re 85 people today and we’ll be 150 by the end of the year, and things are just, you know, it’s three and a half years of incredible growth and incredible success.
GR: Definitely, the numbers don’t lie right there. Given your growth and where you’re at now, how are things different now, just from what you’ve seen behind the curtain?
JP: It’s changed a lot. So, when we started there were 12 licensed producers. So raising capital was nearly impossible because people always laughed and said like, “Oh you’re gonna have like fifteen customers. What’s the point?” So, that’s changed. We have 101, I think, licenses out there. Obviously, that’s being added to every week or every two weeks, depending on Health Canada’s mood. And so we’re seeing that part of it.
JP: The other thing we’re seeing is, you know, the enforcement of the regs has changed a lot. So, in the early days, everybody was still learning so that Health Canada inspectors would go to one facility and they would set a new standard for every other facility. So you know, what was fine at the first visit, they would then go after and see a really sophisticated security system, go back to a little LP and be like, “Well, time to change all this. You know, you’re throwing that all away.” So variation and interpretation and enforcement of the regs.
JP: And finally, that sort of leveled out. We also saw the introduction of the Access to Cannabis for Medical Purposes regulation, or ACMPR, which allowed the grow at home, change how prescription intervals work, and sort of streamlined the system from a regulatory perspective. And now we’re starting to see Bill C45 coming down the pipeline with recreational, which will be interesting to see how the medical market and recreational market sort of co-exist with each other, and you know, move forward into the future.
GR: Definitely. That’s the thing. This industry finds it’s exploding at such a rate. Not just patient growth, but technology and legalities and everything too.
JP: Yeah, it’s a growing business about growing.
GR: So, how would you say that things have changed from a patient behavior perspective?
JP: Yeah. So I wouldn’t necessarily say that patient behavior has changed substantially. But what I would say is that, you know, as serving 75 percent of the Canadian industry today, we’re starting to see a lot of the preconceptions that existed in the early days of the industry proving to be false in the data.
JP: So, things like, you know, “most of the patients are in their mid-twenties, they’re seeking recreational cannabis so they’ve gone to a cannabinoid clinic and got an easy script from a fake doctor in there. They’re just using that to get cannabis.” Well, the data says that’s not true. The majority of patients in Ontario are between 40 and 60 years old. You know, we treat people in the system as young as three years old all the way to 102. And that’s in every province and territory across the country. You know, the three-year-old is Epilepsy. The 102-year-old, it’s old age.
JP: But cannabis is making a meaningful difference in the lives of Canadians everywhere. And it’s really, really important as we move into this recreational market, we don’t forget why we started and where we came from. Because those are the people who are gonna matter most and those are the people that need it the most.
GR: Well that’s a great segway into another follow-up point. It’s about, you know, all this buzz around legalization – when it happens. How do you see the true medical patients being serviced by the licensed producers and other companies?
JP: Yeah, so thankfully, what we’ve seen – and I mean nothing is final yet, as you know. We’re still waiting on a Senate hearing on June 7th to kind of hear out this Bill C45 bill thing, and see what’s gonna happen. But, the indications point to the fact that the ACMPR will remain status quo going forward. And that’s a really good thing. It means the patients will still have the opportunity and freedom to choose their licensed producer of choice, and still be able to order directly from that licensed producer through the mail, right to their house.
JP: You know, I think that what’s going to happen with the introduction of recreational is going to be a lot of demand for the product. So, you know, a group like OCS or Ontario Canada stores where it’s a Crown run organization, it’s limited resources there. They’ve had a very limited amount of time to build a very large organization to handle the retailing of cannabis. So you know, they probably have eight hundred, nine hundred employees now, and probably ten thousand in three years with all the retail locations they’re gonna spread out. You know, it’s how many per store, a hundred stores and so on. You can do the math.
JP: So, you know, we have to give them credit where credit’s due. They spun out this incredible organization in such a short amount of time. But, the downside of that is that we know that those lineups and the access to product in the early days of recreational is gonna be nearly impossible. You’ll have massive lineups and a huge shortage of product in inventory, just by the very nature of what we’re doing. So maintaining the ACMPR in its intact condition is gonna be critical to maintaining access for the patients who need that medicine, and to be able to get their hands on it.
JP: And not only that, but being able to have their preferred type of medication available, whether that’s an oil, or dried cannabis, or a topical, or whatever the case may be. It actually shows great promise, you know, we also have the side benefit of recreational cannabis adding major benefit to the medical side, because now we’ll begin to see more extracts, edibles and things twelve months after legalization that’ll then fall into the medical system as well. So, I think, all in all, these two things are gonna tie together, they’re gonna move together, as long as we keep them distinct and make sure that those patients have their constitutional access to cannabis. That’s what’s gonna matter the most.
GR: Well, based kind of on your data across the country, in all these groups that you were mentioning, how are they buying? In terms of the customers, what are they mainly using cannabis for?
JP: The way to look at it is about 75 to 80 percent of all revenue realized vertically by a licensed producer that’s offering both extract and dried, will be dried. However, that being said, extract is growing about 10 to 20 percent month by month consistently. So, we’re seeing oils are becoming more and more popular in the space which is really great because I think there’s a convenience factor for the patient to just take this food grade oil, put it on whatever and be able to use it. It’s decarboxylated. It’s ready to go.
JP: The other area that we’re seeing a lot of uptake now is in the capsule market. Because I think there’s a certain convenience to having a capsule. You know, there’s no stigma associated with taking a pill. It’s discreet, doesn’t leave you stinking like cannabis. Simple, simple. So, we’re seeing a lot of uptake there as well.
JP: But typically, if you look at the top three skews at a licensed producer: generally speaking, the number one seller is gonna be the highest THC product that they have. Because I think we have a heavy veteran influence in the patient community, and I think THC is very effective for PTSD, helps people live in the present, at least that’s the anecdotal feedback that we’re hearing. Obviously, not making any claims here.
JP: The second product that we’d see on the top three would be that high CBD strain. So one that’s completely devoid of THC or has a very minimal amount of THC in it, and people with chronic pain conditions and things like that are using those products.
JP: And then finally, that third position is usually dominated by a balanced blend. So, about a seven percent THC, and a seven percent CDD, something you can smoke through the day that’s gonna give you a little bit of a relief, but not mess you up either, and not be overly potent to prevent you from functioning in your day to day life.
GR: And now you didn’t, in terms of product selection, across the board, and obviously you know terpenes are coming into such prominence now as more research becomes available. In your opinion, does Sativa, Indica, or Hybrid, does that still matter to consumers?
JP: That’s a good question. So, from my perspective, no. That’s a completely non-scientific way of saying this strain is good or bad. You know, I had a good friend come up to me last night. He was like, “You know, I found this great strain. It’s got a little bit of Sativa, it’s just enough to lift me up and lots of Indica to help this.” I’m kinda sitting there like, “well, that’s very anecdotal and hyperbolic, there’s no science there.” So, what we’ve learned is you know, you’ve got 155 plus different cannabinoids occurring in the plant. And these are called terpenes or flavonoids.
JP: And then you’ve got your primary cannabinoids, like your THC or CBD, CBG, CBN and all the other assorted main cannabinoids. And, so really I think the medical benefit from that side is pretty well researched. We kinda know what those ones do.
JP: The terpene side is what creates an entourage effect. So, you know, patients who are consuming different strains will notice different effects, even if the potencies are the same. So, if I smoke a 15 percent Girl Scout Cookie from OrganiGram, or someone like that, I’m gonna have one effect. And if I order a 15 percent Girl Scout cookie from Aphria it may feel completely different. And that’s an indicator that there’s genetic drift between those two strains. It’s not a bad thing. It’s completely expected. But then the terpene profile is different. So, it’s the combination of these 155 different cannabinoids interacting with everything in your body that’s gonna make that effect.
JP: So, a great example is something like beta-caryophyllene. In a small dose, it’s a stimulant. In a large dose, it’s a sedative. So, if you wanna go to sleep, find something that has a lot of beta-caryophyllene in it. You wanna wake up, find something with a little bit of beta-caryophyllene in it. And I think when consumers can wrap their head about what that means and how that translates to how they’re going to feel that’s a huge step forward for everyone.
JP: But this Indica/Sativa thing? I mean, it’s a great rule of thumb. I think Sativa’s are naturally low in beta-caryophyllene. Indicas are naturally high in beta-caryophyllene. But I mean, there’s no hard fast and rule to say that Indica is always gonna make you sleepy, and Sativa is always going to lift you up and make you feel stimulated.
GR: Well especially since they all seem to be hybrids now. Everything’s almost a hybrid. Whereas a true Indica or a true Sativa –
John Prentice: They’re almost extinct. Like pretty much non-existent. I mean, once in a while you’ll find one. I knew guys who were out searching for land-raised strains that nobody’s found before that are still pure and unadulterated. But the reality is, even the stuff cultivating in the wild – I mean cross-pollination a major issue. So all it takes is a Sativa plant to be near an Indica plant of an opposite sex, and you’re gonna have a hybrid come out of that.
JP: So, I would say of all the cannabis strains, probably 90 to 95 percent would be considered in that hybrid category. But to which degree is sort of the differentiating factor. So it could be only 10 percent Sativa and 90 percent Indica. Or it could be 90 percent Sativa and 10 percent Indica. So it really just depends, but I think those pure strains are pretty much a thing of the past.
GR: Well, like you were saying, in terms of the range of effects. Even with the same THC percentage, strains can react differently to a certain type of person.
JP: That’s right.
GR: Can you give some advice to some people that are buying for the first time. The question always is, “I don’t wanna buy 20 or 30 grams of a certain strain.” What advice would you give?
JP: Yeah. So what I see a lot of producers doing are sample packs. So you know, they’ll send you three bottles, each one will be five grams, and there’ll be three different strains for you to try. And generally speaking, you know, they’ll have several varieties of sample packs. So one will be a high THC sample pack, a high CBD sample pack, and a balanced sample pack. So, really, depending on what you’re trying to treat and the recommendations of your physician, that should indicate what sample pack you should try. But that will at least expose you to three different products from the same licensed producer, and you’ll be able to feel those different effects.
JP: But you know, one piece of advice I can give to any patient that’s starting out, is “start low and go slow.” This is not a race. You’re not gonna have a good time if you have too much, so just start simple, take a little bit. You know, as much as doctor’s frown on it, I always say a joint is a great way to start because it’s real time. You know, as you puff on the joint you’re gonna feel it, and when you hit that point of titration where you’re comfortable, you can put that joint down, and it stops. With an edible or something like that, where it takes 45 minutes for the drug to onset, in those circumstances it’s very easy to overdose on it and have a pretty incredible effect on your body, and if you’re not ready for it can be a really dissuading experience.
JP: But generally speaking, from the feedback that we hear, about 80 percent of medical patients across the country are getting a positive benefit out of medical cannabis. I think it’s better than any other medication on the market to be honest.
GR: Well, I feel like that could be a whole separate discussion. We could go on for hours and hours. But, what trends have you noticed from various age groups, or even male/female? We had some pleasant surprises with certain demographics we didn’t expect to see a large growth in. From your perspective, what did you notice it the terms of demographics that were unusual?
JP: Yeah, well I mean, there’s a couple things that we see. One thing that we see is certain markets in Canada are growing very, very fast. And so, I think, if we had to correlate that to something, it would be, the increase in the number of cannabinoid clinics that are opening in those areas and that are making it easy for people to access medical cannabis. Because I think it’s very easy to sit back and say, “Oh, look at that 32-year-old guy who’s smoking weed out on the street. He’s probably just doing it to get high.”
JP: When the reality is that guy’s suffering from anxiety or suffering from IBS or has Crohn’s. And there’s a valid medical reason for him to be doing what he’s doing. So we can’t be judging books by covers. But what I can say is that generally, the population skews older than what people would think, so that 40 to 60 demographic is prime time for medical cannabis. A lot of aches and pains and health conditions are starting to get to that point where treatment is required. That sort of emerges in that demographic.
JP: The male-female split? Slightly male majority, but by three to four percent, so it’s actually almost 50/50. It’s like 47 percent female, 53 percent male. So we have a really good split there. We’re not seeing one or the other. But what we are seeing is a gender gap in how cannabis is prescribed. So we can say, generally speaking, females are prescribed less than males. Which is really weird, because I don’t think a female body is any more susceptible or any less susceptible to the effects of cannabis than a male body, because it’s not based on the lipids in your body or any of the traditional mechanics. It’s right in the endocannabinoid system CB1 receptors, CB2 receptors. So, that’s really fascinating. So there is inequality out there, even if it hasn’t been reflected in the prescriptions size.
JP: The other thing that we find, is that women typically don’t fill their prescriptions to its maximum extent as much as men do. So, men typically will max out their prescription. Why? I don’t know. You know, question of the sexes, but it’s just an interesting anecdote that we picked up along the way.
GR: Very interesting. Yeah, I’ve actually seen that across both sexes, in terms of not filling their entire prescriptions. So the last question for you here. Where do you see things going? Just in Canada, obviously. Or even by province. Where do you see things going from a patient perspective?
John Prentice: Sure, well I think some provinces are woefully underserved. So you know, if you go to Nunavut, or you go to the Yukon, or you go to the Northwest Territories, there are people there. There are very few medical patients in those provinces. You know, I could probably count on my fingers and toes the number of patient registrations in our system, which represents 80 percent of the patients across Canada in Nunavut. Right? I think there’s 12 to 14 patients there. I mean it’s legitimately very, very small.
JP: So, that’s telling me that, you know, it’s not being discussed as a treatment option. There’s no one up there advocating for it to be a medicine, and people aren’t really thinking about that as a feasible way of treating medical conditions.
JP: South of the northern provinces, it’s a little different. So, in BC we have the lowest patient counts all across Canada because they have this really booming, sort of illicit system that’s existed there for a really long time, and I think people who are using cannabis medically tend to just go into a dispensary, buy what they need, and self-medicate. I don’t think registering with a licensed producer and doing a mail order thing was really needed there, because they already had such easy access to the product through the retail infrastructure that’s already been laid out in that province. So, we’re seeing that reflected, and you can see that in the license counts and a variety of other factors in BC.
JP: Moving east, you know, you get into the prairie provinces. They are the fastest growing market in Canada right now. You’re seeing a ton of patient registration happening in Alberta, Manitoba, and Saskatchewan. There’s a lot of cannabis clinics opening up there. There’s a lot of patient education going on. And I think that it’s the prairies. They grow stuff. They grow a lot of crops. I’m sure there are some corn fields with some weed out there. I don’t think it’s an alien substance to them. I think it’s a viable treatment option and I think people are taking advantage of that.
JP: Ontario is a little more mixed. So, you know, down the sort of Windsor corridor you’re seeing a lot of patient registrations there, but northern Ontario and sort of rural Ontario is being neglected. So you go to Kawartha Lakes, or you go to Peterborough, very few cannabis clinics or dispensaries in those areas. Physicians aren’t trained on this stuff, so when you go to see your family doctor, I mean, what he thinks is, “Gee, this isn’t high school. I’m not selling dime bags to you. I don’t know anything about cannabis. I don’t know how effective it is. I don’t know if it’s safe. I don’t know how you’re gonna react with it. So, I’m just not gonna prescribe it, because here’s that study on oxycodone that tells me everything I need to know. So, here take that instead.”
JP: And that’s really sad, but that’s the way it is. I think with time that’ll change. I think what’s happening in Toronto and the major urban centers and the more populous areas of Ontario, it’s going to bleed out into those rural zones.
JP: Quebec is a bit of an anachronism and an oddity. They’ve got a central registry for all their patients there, so they’re collecting good research data. And patient registration hasn’t been super, super high, but it’s getting better.
JP: And then in New Brunswick, fantastic patient throughput there, a lot of military, a lot of vets, a lot of people using it. And it’s sort of continuing throughout the east coast as well.
JP: So I think, with the exception of Quebec and BC and the Northern provinces and territories, as well as the rural areas in Ontario, we’ve got a really good penetration of medical cannabis in the Canadian community. And I hope to see that continue because I think this is such a viable treatment for people with chronic pain, PTSD, and a variety of other ailments and symptoms.
GR: I couldn’t agree with you more.
GR: John, appreciate your time.
JP: Anytime. Thanks so much. That was great.