As anticipation for legal recreational marijuana reaches new highs, one Ottawa cannabis company doesn’t want consumers – or investors – forgetting about the medical side.
National Access Cannabis (TSX-V:NAC) has spent the past four years establishing itself as a go-to destination for patients to access medicinal marijuana through proper channels. Now, with recreational-use cannabis poised to hit the streets in July, the firm’s CEO says he wants NAC to remain the steady hand that guides the drug’s safe use.
“We’ve known for quite some time that the landscape is going to change,” Mark Goliger, the firm’s chief executive, tells OBJ.
Goliger predicts that legalized recreational use will lead to patients self-medicating with the drug, whether their conditions are appropriate to treat through cannabis therapies or not.
NAC hopes to get a hand in the retailing of recreational cannabis in Canada, not only to capitalize on the emerging market, but to make sure even casual users respect the drug’s medicinal effects.
“Never in history has there been a product that is both used as a medication and used as a recreational product like this, that’s never been an industry or an opportunity. Not on this scale, that’s for sure,” Goliger says.
To that end, NAC announced last week that it intends to raise roughly $6 million in a private placement. That money will go towards marketing, branding and other working capital – everything needed to prepare to launch a division focussed on recreational cannabis.
Goliger says he expects the round to close soon.
NAC provides educational services that give prospective patients an understanding of how to access legal channels for medical marijuana.
Anyone can walk in off the street to get some information on the processes. Patients with a referral or prescription in hand can come in for help setting up at-home delivery of their medication through a licensed supplier. If somebody is interested in cannabis therapies and has access to their own medical records, NAC can also set up appointments with a physician familiar with such treatments.
“You stick out like a sore thumb if you’re in operation and you’re not a Cannabis Control Board of Ontario store.”
Licensed pot producers provide educational grants to NAC for its work, which is the firm’s primary revenue stream.
NAC went public on the TSX Venture Exchange last year via a reverse takeover of Brassneck Capital. The firm saw revenues of $1.2 million in fiscal 2017, compared with roughly $300,000 the year before, but took a net loss of $7.7 million for the year.
In financial disclosures, NAC says it has taken losses for the past eight quarters and expects that will continue as it expands its services. The firm currently has 10 locations across the country, including a clinic on Wellington Street West in Ottawa.
Right now, the only cannabis on site at National Access Cannabis is in the name. There’s a lot of confusion surrounding NAC’s purpose and activities, Goliger says, and that’s further clouded by the presence of illegal dispensaries in cities across the country.
“People come in and say, ‘Where’s the weed?’ Those, quite obviously, are the recreational consumers,” Goliger says.
The chief executive anticipates legalized recreational use will make it clear to the public which channels are legal. Marketing efforts and provincial seals of approval will point consumers in the right direction, while he believes illegal operations are likely to suffer or be shut down.
“You stick out like a sore thumb if you’re in operation and you’re not a Cannabis Control Board of Ontario store,” he says.
Goliger says the NAC’s Ottawa clinic, one of its oldest operations, is also probably the firm’s most popular facility in the country.
But that’s not likely where the retail opportunity will lie, nor anywhere else in Ontario, where distribution will be provincially managed. Goliger highlights prospects out west – British Columbia, Alberta, Saskatchewan and Manitoba – where legislation will open the door to private retailers.
NAC hopes to retail refined products from brick-and-mortar locations, but Goliger says “dispensary” isn’t the right term for it.
“Canada won’t have dried flower that’s going to be picked out of jars and put into baggies and passed onto consumers. It’s going to be very much pre-packaged,” he says, suggesting operations will look quite similar an LCBO in terms of how products are sold.
Goliger believes Canada has the chance to take a leadership position in the international cannabis market. It seems like every quarter a new country or state is legalizing cannabis for medical or recreational use, he says.
“There’s so much opportunity that NAC has right now. All opportunity takes money.”
Canada’s early ventures in the space have not only built up an impressive number of suppliers, but of human capital: executives that understand how to get the cannabis market off the ground.
“Canada is a leader in terms of human capital, leaders in cannabis. We can export that to create wealth and opportunity for the country.”
Goliger says the NAC’s national footprint and status as an educational authority have laid the foundation to capitalize on this market, but it’s not the only cannabis firm in the country raising money now for opportunities down the line. This month alone, pot producers Canopy Growth, Hydropothecary and Aphria have all announced their intent to raise hundreds of millions of dollars to capitalize on Canada’s emerging market.
“There’s so much opportunity that NAC has right now. All opportunity takes money,” Goliger says.
“We’re going to invest these proceeds to the best of our ability to build the solid foundation for a cannabis industry that is just forming nationally and internationally.”