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Chuck Rifici of Tweed Inc. looks out over the floor of the former Hershey's chocolate factory, Friday September 27, 2013 in Smiths Falls, Ont. (Adrian Wyld/THE CANADIAN PRESS)
Chuck Rifici of Tweed Inc. looks out over the floor of the former Hershey's chocolate factory, Friday September 27, 2013 in Smiths Falls, Ont. (Adrian Wyld/THE CANADIAN PRESS)

Medical marijuana companies find creative ways to stand out Add to ...

When Chuck Rifici and his business partners set out to promote their startup, they didn’t buy advertising. Instead, they took the company public.

It was an unconventional move, but Mr. Rifici’s company isn’t exactly a conventional one. Tweed Marijuana is one of Canada’s new batch of legal medical marijuana growers and while these companies sell directly to consumers, they’re banned from advertising.

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“A lot of typical marketing and adverting are non-starters for us,” says Mr. Rifici, whose company grows marijuana at a former chocolate factory outside of Ottawa. “We’re working with a controlled substance.”

On April 1, the federal government opened-up what it calls a “free market” for medical marijuana. Under the new rules, anyone can apply for a license to grow medical marijuana and sell it directly to patients. It’s a big change from the old system, when legal users were allowed to grow their own, have a designated person grow it for them or buy it from Health Canada’s single designated supplier, Prairie Plant Systems.

The new rules have also made access to medical marijuana easier. Patients used to require the approval of two doctors and specific permission from Health Canada. Now, it only takes a simple prescription-like document from a physician.

But while access may be easier, medical marijuana is now considered a narcotic and governed by some of the same rules that apply to drugs like morphine. Those rules ban promoting narcotics to anyone but a doctor.

“They really didn’t want anyone to go out there and say ‘this is why our product is better,” says Anton Mattadeen, chief strategy officer at MediJean, one of over 800 companies that have applied to enter the medicinal marijuana market. The company currently has a license to grow marijuana for research and development but not to sell it, though that’s in the works.

While Canada’s marijuana growers may be able to advertise, there’s nothing preventing them from talking about the issues around marijuana and its use as medicine.

That’s the approach that MediJean has taken: organizing debates that put doctors, patients and police officers in the same room in an effort to “create value for the brand through an open conversation with all stakeholder groups,” says Mr. Mattadeen.

While many of these groups already have stances on the issue, Mr. Mattadeen all of their options are “in silos.” By bringing the focus back to patients, he thinks the company can win people over.

“I think quite quickly in this debate people forget that there is an actual patient and that patient is suffering,” Mr. Mattadeen says. That may help the company reach one group that’s essential for its long-term success: doctors.

“A lot of doctors are still on the fence,” says Mr. Mattadeen.

Speaking the same language as doctors is a big focus for the company, even down to its online presence. “One of the reasons we created the site like we did was to make doctors feel comfortable,” says Mr. Mattadeen.

That’s the way it looks to Lea Prevel Katsanis, a marketing professor at Concordia University, who worked in the pharmaceutical industry before going into academia. She says the company’s website reminded her of “traditional, big pharma.”

While Mr. Mattadeen says MediJean looked at the way pharmaceuticals have generally been promoted, it isn’t exactly what the company is going for.

“We didn’t need to emulate big pharma, we can have a much more intimate conversation,” says Mr. Mattadeen. Still, science is front and centre throughout the company’s branding.

“We have created a state of the art lab,” Mr. Mattadeen says. Instead of cloning, MediJean uses tissue culturing, a process where cells are grown separately from the plant. This will give much tighter control over the medical ingredients in its products.

“The biggest problem for the patient is consistency,” says Mr. Mattadeen. “The old program couldn’t guarantee the right strain.” That means patients can be tested and given a strain specifically tailored to their symptoms.

Ms. Katsanis says this sounds a lot like what doctors are interested in. “This is huge for oncologists, they’re already using personalized medicine,” she says.

The company is also planning to conduct an “anonymized, ongoing study with our patients,” Mr. Mattadeen says.

If the study shows positive results that will be appealing to doctors. “The real issue is giving credibility to medical marijuana,” says Ms. Katsanis. “As a marketer who marketed drugs to physicians, you have to have clinical evidence.”

With growing concern about the over-prescription of opiates, the timing might be right for medical marijuana to win over the medical community, Ms. Katsanis says. “Patients and physicians are seeking better ways to manage pain,” she says and that means there’s a huge market for prescription drug substitutes.

While reaching doctors is important, it’s not the only factor for medical marijuana marketers. For Tweed, which began shipping its product to customers on May 5, timing was everything. “Being part of the first cohort” was key, Mr. Rifici says. “We know there’s more competition coming.”

So far, Health Canada has only licensed 13 companies to begin distributing. But with around 400 more waiting in the wings, that number is set to grow. And being in the market early might be even more important for medical marijuana than for other new products, patients can’t change which distributor they buy from without going back to their doctor.

“It’s the ones who get the patients first who are going to be the winners,” says Ms. Katsanis, “it’s very much a first-mover market.”

But there’s no first-mover advantage if your customers don’t know you exist. “If customers can’t remember your name, you’ve already lost,” says Mr. Rifici.

That’s why Tweed went public. Counting on the visibility that would come with being the first medical marijuana grower traded on a North American stock exchange. As part of “the process of going public, you have to build the whole business to be transparent,” he says. It’s a strategy that has the company issuing press releases on a regular basis in an effort to stay in the media.

While the company wasn’t looking to raise money when it decided to go public, that’s changed. In late April Tweed completed a private placement that saw it raise over $15-million to accelerate its expansion plans.

It’s a telling example of just how fast the industry is moving. After all, the rules that went into effect on April 1 were only announced last June.

That’s what drew Mr. Rifici to medical marijuana in the first place. “It was the opportunity to build something new fast,” he says. “It’s very rare that there’s this large a shift. Where there’s a strong demand, where the market is there, but the supply chain is completely changed.”

Despite the tough regulations, both Mr. Rifici and Mr. Mattadeen say they think Health Canada has done a good job.

“They’ve created a framework that leads the world,” says Mr. Mattadeen. “It’s an uncomfortable topic for the government but they’ve dealt with it.”

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