CannabisNewsVideos

VIDEO: 48North Cannabis Corp (CVE:NRTH) CEO on Targeting Female Marijuana Market

MidasLetter Live
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48North Cannabis Corp (CVE:NRTH) (OTCMKTS:NCNNF) CEO Alison Gordon details her long history working within the U.S. and Canadian cannabis space; co-founding Re-think Breast Cancer, which empowers young people worldwide who are concerned and affected by breast cancer, working as the Chief Marketing Officer for WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) (FRA:4WE), and ultimately becoming the CEO of 48North. The first female CEO of a publicly-traded licensed producer of cannabis discusses the company’s unique focus, future initiatives, and the female demographic in the international marijuana space.

TRANSCRIPT:

James West:    Welcome back. I have Alison Gordon with me right now. She’s the CEO of 48North Cannabis Corp.; trades on the TSX Venture under the symbol NRTH. Alison, thank you for joining me today.

Alison Gordon: Thank you for having me.

James West:    Alison, let’s start with – I’m not going to point out, like, everybody called me and said ‘oh, you’ve got to have Alison, she’s one of the only women CEOs in cannabis’ and I’m like, well, great, but like, I just want to know why she’s the CEO. Like, I don’t care that you’re – I mean, it’s interesting, and we can talk about that in a bit, but that’s not the main focus to me. It’s like –

Alison Gordon: That’s great, I hear you. It’s like, I’m here, I’m a person.

James West:    Exactly, and you’re in the cannabis space, and you’re growing cannabis, so you’re obviously somebody I want to talk to about that. So tell me about 48North: what is the differentiator in terms of competing with all these big behemoths, and how did you get into the space, and all that.

Alison Gordon: Okay, well, I’ll start with how I got in because it kind of leads us there, but I am a cannabis user recreationally, and about over 12 years ago I had a close family member who was diagnosed with Stage 4 ovarian cancer. She was older, she’d never used cannabis at all, and she was recommended by her doctor to try medical cannabis through the MMAR program, and as a cannabis user, I was like hold on a minute, wait a minute, what’s going on here? I had no idea that we had a medical program.

At that time I had co-founded an organization called Re-think Breast Cancer, and that’s what I was doing with my career, and in that organization, we were really thinking differently about breast cancer and very marketing and branding focused, focusing on young people, and I naively thought back then – I think it was, like, 2008 – you know what, someone needs to rebrand the cannabis market and open stores that will sell beautiful cannabis. I started to look at the industry, realized that it wasn’t that simple, but also really see how the cannabis was helping her in many ways as she was going towards the end of life. So, anxiety, sleep, pain…and I thought, like, okay, this needs to get out there. So I really started examining the space back then.

And then in 2013 I decided okay, you know what? Let’s start making a move and maybe to really do something. The government obviously had announced that they were launching the new program. So I started to talk to people and get a lot of different opportunities, because I guess I have this perfect storm of marketing and branding and entrepreneurship. You know, with my partner I had grown this breast cancer organization to be a national organization, that it was recognized globally as sort of changing the face of breast cancer, and then I had been working with patients, physicians and government relations for all those years.

So I wound up taking a position as a Chief Marketing Officer for, actually, WeedMD; that’s in early 2014, and at that time, WeedMD was delayed in licensing, as everybody was around the injunction, and you know, the government had said ‘we’re going to delay your inspection, we’ll be back really soon’. I thought okay, a week, a month, you know? I think it was about a year and a half. But during that time we actually went and started to look and say okay, well, we can’t really wait for Health Canada right now, so let’s take some of these opportunities we’re seeing in the US. So we wound up purchasing one of four legally permitted dispensaries in Los Angeles, in West Hollywood, which is now the MedMen store, so we sold it to MedMen; their big flagship store on Santa Monica Boulevard.

James West:    Wow.

Alison Gordon: So during that time in 2014 and ’15, you know, there was maybe eight or nine licenses in Canada at that time, and you know, we all knew each other; Terry Booth and Neil Closner and Bruce Linton, and everybody was sort of running around. But those guys were very much focuses in Canada on building out their cultivation and medical system, dealing with regulation, and I was running back and forth to Los Angeles working in this mature market and seeing it in a very different way, because it almost went back to my original thought of, like, someone needs to rebrand. I mean, in California, you were seeing the evolution of the products and brands really come to market. When we first purchased the dispensary, I think the sales of extracted products were around the 30 percent range, and they really quickly went to, you know, 40 and 50 percent.

And also when we first purchased the dispensary, all the products were made by the tenders that worked there. So you know, you had homemade lemon squares wrapped in cellophane – I was like, perfect, perfect, branding hasn’t come in yet. And then suddenly you were seeing Kivas and Venice Beach Cookie Company, and you know, all the products were coming in, and I was like, okay, this is, you know, happening. This is what it’s about, this is a consumer packaged goods industry, which I know many people are saying now, but in 2014 my colleagues in Canada were like, ‘what are you talking about?’ I’m like no, it is, I mean, it’s a consumer packaged goods industry.

So the long and short of it is, you know, my journey took me from there to doing a lot of work in the US and Canada, doing deals, because we were seeing these amazing companies in California just at their infancy, but you know, if you met their management you were like, okay, these guys or girls know what they’re doing, and their stuff is starting to sell really well. So it was a huge opportunity to expand my network way beyond Canada. And so I was doing that for a while, and then ultimately working with Guy Laliberte’s family office; they were looking at stuff in the space.

James West:    Guy Laliberte, from –

Alison Gordon: He was the founder of the Cirque du Soleil.

James West:    Right, okay.

Alison Gordon: And he was looking at different deals in the space, and they ultimately decided to make a large investment in what is now 48North, and asked me to come and help out, and I did, and ultimately was asked to come be the CEO.

James West:    Wow, there you go. And here you are. That’s not that long.

Alison Gordon: But you know, it’s important for talking about what 48North is about, because that same vision that I’ve had is still very much now I’m in a position to execute on that vision, which is saying, okay, we want to be focused on products and brands, and really looking at it as a health and wellness company versus really saying, okay, we’re a cannabis company so we exist inside this box. We’re cultivating, we’re extracting, and this is what we do; we have a different view. We say we’re a health and wellness company that is focused on the female market, and it just kind of expands the type of deals that you can do, where you want to play, the distribution, the retail, the acquisitions. It’s not sort of cookie-cutter-ing down that line.

James West: Right. Okay, interesting. So that kind of does bring me back to the women in cannabis sort of question.

Alison Gordon: Yeah, you can’t get away from it.

James West:    Yeah, exactly. So then, marketing to a female audience is an entirely different approach than marketing to a general audience or a masculine audience. What is it about the market for women that you have to do differently?

Alison Gordon: That’s a difficult question, because women are many things.

James West:    Women are from, what is it? Women are from Venus and men are from Mars, or something like that, right?

Alison Gordon: They say. But women are – there’s no, amongst the demographic ‘women’ there’s many demographics, and I might have more in common, you know, as a consumer with you, than I would as another woman. So it’s hard to generalize in that way, but when we set out to explore this strategy, we started to do a lot of market research to say people are going to ask these questions and investors are going to want to know, is this even a market? So it was really interesting to see that women do make up 48 percent of the current cannabis market, and they’re actually more likely to see cannabis as a health and wellness plant, as something that they can enhance their lives in that way. So that was very interesting.

And then when we looked at, you know, we obviously broke that down, heavy users, medium users, light users, non-users, intended users, and amongst intended users – so, people who say they haven’t used but they will once it’s legal –

James West:    How big was that market?

Alison Gordon: I’ll get you those numbers afterward.

James West:    Okay, because that’s really, you know, like, when I think about the number of people who are waiting for it to be legal before they try it, I always thought, well, I’ve got to think that’s a really small number because –

Alison Gordon: No.

James West:    No, really? Because I’ve always thought, the idea, the rebelliousness inherent in trying marijuana despite its illegality is part and parcel of the kind of person it typically attracts and is really representative of the culture of cannabis.

Alison Gordon: Which makes it a really fabulous group to market to! Just joking. They’re not into joining and anti-authority, it’s like the best consumer you could want! No, but truly, I mean, what I was going to say is, women actually made up a larger percentage than men of people who intend to use when it’s legal, but to answer what you’re saying, I think it’s interesting because cannabis users often stick together or know other cannabis users, so it would seem to you like it’s all around, and what couldn’t, if you wanted to try, you just could. But if it’s really not in your world, and it’s not something you’ve tried, it probably isn’t necessarily something you feel comfortable going into the black market or doing those things. So I think that’s where people say when it’s legal and they can go into a store, there’s a trusted source, they’re getting it from licensed producers who are regulated, that makes them feel more comfortable.

James West:    Sure. On a recreational side. But even on a medical side, I mean, to me, it’s – you know, I’ve talked to a lot of doctors about cannabis, and increasingly more of them are sort of rejecting the old attitude of ‘this is not a medicine because we don’t know enough about it’ and are focused more on the doctors who are early adopters, who are now advocates for cannabis as medicine and, in many cases, are leading researchers in the space for different things. And the consensus seems to be, without exception that there is so much potential in this plant for just good health, thanks to the endocannabinoid system.

Alison Gordon: Yeah, the endocannabinoid system, for sure. And all the knowledge around that we’re gaining around the terpenes, around the entourage effect, I mean, we’ve developed a big focus on THC and CBD, and for us, those CBD products are definitely very, very interesting – I mean, it’s the fastest-growing products in the US; it’s huge, the skin care and the cosmetic and all of that around the CBD is amazing, but I’m excited as we start to see the other cannabinoids that we’ll discover and understand how it all works together. I mean, with Epidiolex being approved by the FDA in the US, you know, for epilepsy, or some forms of epilepsy, it’s really that legitimacy is coming, which is awesome.

James West:    Sure. Yeah, I had a guest who was producing cannabinoid products for animal health, which you know, I have two dogs and so my first dumb question, which I specialize in, apparently, was, “So why would I want to get my dogs high?” and he just said “It’s not about getting your dogs high, it’s about the homeostatic effect of cannabinoids though the endocannabinoid system that exists in all living organisms,” apparently, which I was, you know – I’m always so easily surprised, and positively so. So what is it about the endocannabinoid system from a woman’s perspective that makes it applicable to products that women would gravitate to?

Alison Gordon: Right. So the endocannabinoid system – again, and I’m not a doctor, wherever the camera is, and this is not my area of expertise – as I understand, it’s part of the human body, so it’s not a male or female thing. Obviously – not obviously – there is research that shows that breast milk and the way that all that goes together closely matches the cannabinoids in the endocannabinoid system, and I’m sure I’m butchering this. I’m going to say, that’s not what I meant; it’s not that it’s particularly about women, the way that the medicine would work with women. What I’m saying is that there are particular issues or health challenges that women face that could be helped by cannabis, and the cannabinoids.

So for example, we know that CBD is anti-inflammatory. It helps with pain, and is used for things like arthritis, etcetera. So when you think about something like menstrual cramps, we’re very interesting in saying, okay, what can we create, what type of supplement, what type of cream that you could potentially rub on your belly, that could help with menstrual cramps. So it’s not necessarily, as you’re saying, like how the cells react to the cannabinoids; it’s really much more about taking what we know and applications that it’s already being used for, and saying let’s use and come up with ways to address products that women would really be interested in.

And not just medical, like, if you think on the recreational side, if it’s the case that women might need to be more discreet because they have, you know, their children around, it might be a smaller vape pen; it might be something that doesn’t smell; I mean, it might be something that’s dosed differently. So it’s not necessarily – of course, we want to look at the science, but as intricately as you’re saying. It’s more thinking about what are the ways that women want to use and consume cannabis. And for us, we want to be that trusted voice for women, because research has also shown that women feel less comfortable coming out and acknowledging that they use cannabis. And so, can we create that safe space, educate women, let them feel comfortable to say ‘okay, I know people are talking about this, but what really is CBD, and how would I use it, and how might it replace something that I’m already using?’ So for us, it’s building out those platforms to be able to have that relationship with women in Canada, to ultimately be able to help them know which products they’re going to want and where they can get them.

James West:    Okay. And that’s very interesting, because it’s now almost – any second – 4:20. Look at that clock up there! At 4:20 in each of our shows, we talk about – we actually usually show, but we don’t have anything to show today, but we talk about an exciting new product in the cannabis space that most of our space probably might not yet know about.

Alison Gordon: Ahh! So much pressure! Do you have one that you know, that you can discuss?

James West:    Well, I have a ton of them, in fact, but I wanted to ask you; you’re the guest, so…what is, what cannabis product that, thanks to the de-prohibition/legalization of cannabis, medical, recreational, what product excites you most in the whole cannabis universe?

Alison Gordon: Oh my God, this is like the most difficult question! Okay, I’m going to talk about two – like, one category and one product, is that okay?

James West:    Absolutely.

Alison Gordon: So I’ve kind of alluded to this already, and I’m really excited about the skin care and cosmetics, which, you know, I’m not going to say more. There’s so much going on around that with regards to not just for arthritis and the things we were saying, but also using some formulations, and this is something that we’re working towards as well, on anti-aging and, you know, under-eye bags, and cosmetic. And so I think that’s going to be really game-changing. I mean, Vogue Magazine, Vanity Fair, many others, New York Times, have said CBD will be the next big skin care ingredient, so I’m excited about that; that’s not as technologically innovative as what you’re speaking to, but actually, someone was just in the office  – I won’t say who – and they had this really cool vaporizer that has an app on your phone, and you sort of, when you set it up, you, I guess, suck on it so it can measure how strong you pull, and then you can actually set the dial for dosing on your phone, and you suck, and then it will just stop automatically at that place.

James West:    [laughter] I’m exactly as high as I want to be right now, not one iota too high!

Alison Gordon: Well, it’s like, the thing is, across the board, in all of our research, both men and women, old and young, all sorts, everybody, the one thing that runs consistently across the board is, everyone says they want to be able to control how they’re going to feel, and that makes sense. I mean, nobody’s like, hey, I don’t want – you know, I want to be out of control. So that’s what’s exciting about the technology, is you can start to figure out what it is, you know. And for us, we’re growing some very unique genetics as well, because we have a partnership with a company in the Netherlands, so, an exclusive partnership, and we were able to bring in seeds from the Netherlands through Health Canada through our import license.

James West:    Right.

Alison Gordon: And we’ve been phenotyping those, and we’re about to be at full production in our facility on those genetics. And to me, that’s also part of the excitement, is bringing in genetics, being able to phenotype and figure out what, you know, the Canadian market wants, and be able to expand that offering.

James West:    Okay. We’re just about out of time, so I’m going to ask you, you’ve got 40,000 square foot building capable of producing 2,500 kilograms of cannabis per year; that’s Phase I, I’m assuming?

Alison Gordon: Yes.

James West:    And you have 200,000 square feet of production space planned, and you’re going to produce 40,000 kilograms – I mean, I read these numbers so often [laughter]

Alison Gordon: Well, everything in our industry changes constantly. So really, the cultivation, I’m sure many people have talked about this on your show: it looks like there’ll be an oversupply, and right now there’s an undersupply…I mean, one of the beauties, you started to ask this question before – how do you compete against these big guys? And it’s definitely challenging, but one of the things that is great is that we can look and see as regulations come out, and actually make decisions based on regulatory, you know, fact, not let’s speculate here and we’ve now built a $20 million indoor grow and now there’s outdoor grow.

So the interesting thing is, our facility is on 800 acres and much of it is irrigated. So yesterday when they were talking about the outdoor grow, we were like, this is awesome for us, because what we’re really trying to do is build those future products and brands, as I said. So the input for extraction doesn’t need to be indoor grow; that would be crazy. And you can see in Colorado now, we just had people at our office yesterday, and their prices are just completely dropping, and people are very concerned about the indoor grow there because the dispensaries actually aren’t differentiating by price for indoor and outdoor, which is quite problematic.

So when you’re dealing with creating extracted products, you really are looking to greenhouse or outdoor. I mean, Canada, outdoor, you’re not going to get that many seasons, but the greenhouse and outdoor are obviously a lot cheaper, and when you’re extracting, you’re really just taking out the cannabinoids. So for us, that’s a big part of it, is, what is the best, cheapest way to create a quality product and be quite innovative in that space? So, that’s how we compete.

James West:    Wow, that’s fantastic. All right, Alison, we’re going to have to leave it there for now, but we’re going to have you back.

Alison Gordon: Have me back!

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