Today, we are fortunate to have Aleafia Health CEO Geoff Benic with us. Thank you for joining us Geoff.
- Your career has been spent leading supply chain logistics projects for some of the world’s biggest companies, including Campbell Soup, Walmart and Nestle. What principles from that business have you applied to Aleafia to create a company with efficient supply chain management and consumer sales strategies?
First of all, the logistics industry is one of the most competitive industries on earth. To succeed you need to be extremely cost effective and you need to be nimble to adjust to sudden changes in the marketplace. To be able to scale rapidly. This is a philosophy we employ at Aleafia Health and we’ve been rewarded in that we have been very disciplined in the way we grow our business and see our overhead costs continually declining. That’s meant that today, with that leanness, we are able to adapt to changes in the market, to changes in the cost of capital, and have not been forced to make some incredibly difficult decisions that many of our peers have had to make.
- How has Aleafia Health shifted priorities in the Canadian cannabis market while COVID-19 continues to impact operations?
There have been two significant shifts we’ve made over the month. First, we have a network of medical cannabis clinics across Canada and voluntarily closed the physical locations in March. But since 2018, we have invested in the technology and training to provide virtual patient consultations and so we were able to quickly shift in a matter of two days to completing 100 per cent of appointments virtually. That was made possible by the investments we made in the past, because making that quick shift without the necessary infrastructure simply would not be possible.
Secondly, we have for the last several months been building our capabilities to provide last-mile home delivery for medical cannabis patients. That’s long been in our roadmap, but we decided to move up the timeline given the current environment. We have clearly heard that many of our patients don’t want to – or cannot – leave their homes. So providing that secure, convenient same day delivery is a huge differentiator and is our way to ensure the continuation of patient care.
- The home delivery market represents a significant growth vertical in the Canadian market. Can you explain how the business has evolved in regard to this?
Our COO Greg Rossi and I were among the founders of Grocery Gateway, Canada’s first online grocery delivery service. Not surprisingly, that business is thriving today.
While we all want life to return to normal, we expect to see a permanent shift in consumer behavior from habits developed during this lockdown. One of those shifts will be towards wanting products delivered directly to the home. For fewer points of contact.
As executive consultants, Greg and I were the architects of CannTrust’s same-day delivery service, and now obviously we are stepping in to fill the void they’ve left.
- Which provinces are you looking to enter after the launch of the Last-Mile delivery platform is rolled out in Ontario?
To make this cost effective, obviously you need to have a large concentration of patients in one geographical region. Our primary focus over the next weeks will be to expand from the City of Toronto, to the surrounding communities which accounts for 25 per cent of the Canadian population.
The next step will be Alberta where we have our next highest concentration of medical patients.
- Aleafia Health represents a well-rounded growth opportunity that has leverage to several significant verticals within the cannabis industry. Can you tell our readers about the structure of the business?
It’s important to consider that our team has only been together since 2018. Since then, the biggest bottleneck we have faced is in the building and licensing of our production facilities. Now finally we are eliminating this bottleneck and have a lot of room to grow.
Having said that, we have seen four consecutive quarters of revenue growth – but we aren’t remotely close to satisfied with the past and are looking to take the next step.
We are first and foremost a cannabis health and wellness company. For medical cannabis patients, we’ve created a unique patient experience within an integrated ecosystem. The medical channel has been overlooked by most of our peers, but we see a tremendous amount of room to grow in that channel.
By offering physician-led cannabinoid therapy, education, and a seamless e-commerce and product delivery experience, we believe we are creating a unique ecosystem with high barriers to entry.
Obviously with marketing restrictions, it is difficult to differentiate through cannabis brands, which is why we feel this broader patient experience is so important.
- With much of Aleafia’s focus and infrastructure built out with the medical cannabis patient in mind. What is the company’s future plans to tackle Cannabis 2.0 and the adult use market in Canada?
Last month, our Niagara Facility greenhouse finally received its cultivation licence. This means we are now able to produce consistent, stable inventory of dried flower products. We have over the last three months built a very strong inventory of medical cannabis products, and now we are going to do the same on the adult-use side.
Secondly, our next catalyst is securing the licence for our expanded Paris Facility. This will be the crown jewel of our company. It’s purpose-built to meet EU-GMP certification requirements and this will allow us to export to the broadest possible global market. It also means allowing us to immediately scale up our extraction, packaging and sales of high margin finished consumer products. A differentiated product portfolio is another core way you can compete and getting the Paris expansion running will really accelerate that.
- You recently purchased 239,000 Aleafia shares on the open market and Board Chair Julian Fantino has also purchased shares? Why?
I believe strongly in the future of the business and where we are headed. It was an easy decision to use my personal funds in this way because we have a bright future.
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