Interview with David Wright, President and CEO of Altmed.co, Altmed has invested over two million dollars on its mission to earn one of Florida’s five medical marijuana licenses. Altmed uses the tag-line “the science of medical cannabis.”
Matthew: Hi, I'm Matthew Kind. Each week, I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at cannaInsider.com. That's C-A-N-N-AInsider.com. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at CannaInsider.com/trends. That's C-A-N-N-AInsider.com/trends. Now here's your program.
Today, we're going to hear the story of AltMed, of Sarasota, Florida. One of AltMed's cofounders was inspired by his daughter who suffered from epileptic seizures, to start seeking safe and helpful cannabis-related treatments for families in need. AltMed has invested over $2 million on it's mission to earn one of Florida's five medical marijuana licenses. AltMed uses the tag line, "The science of medical cannabis" and is run by former pharmaceutical executives. We are fortunate to have David Wright, President and CEO of AltMed, with us today. Welcome, David.
David: Thank you, it's a pleasure to be here.
Matthew: For our listeners that may not be familiar with AltMed, can you give us a brief overview of who AltMed is and where you're at in the license process?
David: I'd be happy to. AltMed is a fully integrated medical cannabis company and by that, we plan on growing, processing, testing and distributing the highest-quality medical cannabis in a consistent and quality manner. There are two governmental actions going on right now. First of all, Senate Bill 1030 has been passed and it is in the rule-making process. Additionally, on November 4, there is, on the ballot in Florida, a constitutional amendment, which is much broader than 1030. The difference between the two initiatives, 1030 is a high-CBD/low-THC-only bill that requires the product not be swallowed or smoked, so it's limited to oils, vape pens, sprays, gums, anything like that, but if you chew it and swallow it, it's not allowed.
David: The amendment is a much broader amendment. It has a different definition of cannabis and it allows much broader usage than is allowed under the 1030 bill.
Matthew: Okay. Has it been a lot of paperwork and regulations to meet the requirements for the license?
David: Yeah, the requirements for 1030 are quite unique, in that the law requires you to have a nursery license for 30 years and have been growing over 400,000 plants a year for that time.
David: It also requires a $5 million performance bond and the license fee the first year is $150 and then every two years after that it's $300,000.
David: They are limiting the number of licenses in the state of Florida under this legislation to five.
Matthew: Right, okay. In talking with anybody, politicians or the word on the street, is there any prospect of recreational use down the road or is that not even on the radar?
David: I think it's on the radar as it is in every state. If you talk with people in the industry, they say it's three to five years away.
Matthew: Okay, okay. What applications or medications do you think look the most promising for AltMed down the road, once the license is in hand?
David: Well, I think, once the license is in hand and Amendment 2 passes, the conditions are pretty similar to all the other areas. It's pain, you get a nervous disorder, Parkinson's disease, epilepsy, Lou Gehrig's disease, multiple sclerosis and cancer are the main ones. I think one of interest has become of greater conversation and is included in the amendment, is post-traumatic stress syndrome. I think the applications, from the standpoint of administration, I think the edibles, oils, the patches, lotions and creams are going to become more and more important as the medical cannabis industry develops.
David: Even if you're using bud or the vaporizers, the volcanos, are going to become in use more and more for medical uses.
Matthew: Okay. I read that you're building out a partner network. Can you tell us a little bit about that?
David: Yeah. It is part of our business plan. We're looking to partner in three specific areas. One, we're looking at national brands. I think our belief is that one day this will be reclassified and no longer be a Schedule One substance, which will open up borders and will allow people to expand. In those states where there are brands and those brands that are out there, we think it makes sense to partner with these companies and bring these brands to Florida to begin to create national brands.
David: The second area is in the scientific area. We have partnered with Vita in Canada because we believe that they have a very strong scientific base up there, are doing a lot of the same type of work that we want to do. The third area that we want to partner with is in philanthropic enterprises. We truly believe that there's a reason to give back, that there's a reason to support these foundations that are trying to help patients and we believe we have a responsibility, a strong responsibility to the community and to the state, to make sure that we are good partners and that we work with these organizations to ensure patients get the treatments they need.
Matthew: Okay. Can you tell us a little bit about some of the proprietary genetics you're developing?
David: Well, it's really early in the stage. What we're looking at is, we believe in the entourage effect of the plant. Typically, in a pharmaceutical biotech company, you need a single isomer, a single chemical. For example, the drug Marinol, which is on the market, is a high-THC product, but it's THC only and it's only one THC. The physicians I've talked to who have prescribed this say patients come back and say it doesn't work. Actually, smoking of the product or taking it in an edible or an oil does work. One of the things we're looking at from a genetic perspective is to separate out different levels of THC and CBD, different CBD, CBN, what's the relationship between CBD and CBN and THC and the effects it has on specific conditions.
David: Is a high-THC product with a low CBD maybe better for a cancer patient, rather than a high CBD and a low THC? The same goes for the other conditions. I believe, as this becomes more accepted, the pharmaceutical industries will try and step into this arena, but with my background in the pharmaceutical industries and my knowledge of the way medicines work, it's very unlikely that any drug product made from the plant will ever be as effective as the whole plant.
Matthew: Okay. It's not a matter of replacing the plant with some alternative, it's a matter of dialling in exactly what the solution is for each problem, like cancer or epilepsy, things like that.
David: You're exactly right. You hit it right on the head, and we believe that there is something about this plant and this is not just AltMed saying this. The people that I've talked to at the University of South Florida, the people I've talked to in Canada and the science and the way the industry is looking at this, this is a very complex plant and produces a very complex medicine. There are over 86 cannabinoid receptors in the human body and we have no concept today of what parts of the plant and what is the relationship between these cannabinoids that has on the body. This is important research to be done as we take this medicine to the next step.
Matthew: Okay. You mentioned a little bit about your background in the pharmaceutical and biotech industry. Most of the people I interview in the cannabis industry don't have that background. How would you say that's going to help AltMed or how are you going to approach things differently right out of the gate?
David: Cannabis and the cannabis industry is coming out of the closet, so to speak. It started in California and it has progressed through the other states that have approved this. As it starts to come out of the closet, we will get more sophisticated. I believe that with the background in manufacturing and clinical trials and animal studies and processing and chemistry, that we will be able to provide a more consistent product and a higher-quality product and that are two of our goals. There are a lot of things that we should know about our products that we don't know and aren't paid attention to and this starts with labelling. We will probably create a package insert for our products, just like they do in the pharmaceutical industry, that tells a patient what they should know and reminds them that you shouldn't drive or operate dangerous machinery after taking your medicine.
David: This should be looked at as a way of providing education to patients and physicians. Physicians need to know what they should look out for, what the signs of abuse might be, what the other drugs that they might not want to prescribe if they have a patient that is taking medical cannabis. I believe that the background that we bring from the pharmaceutical and biotech industry can propel us many steps ahead of our competition.
Matthew: Now, will you be doing any kind of clinical trials on your own or do you partner with other companies for that or is that too premature to talk about right now?
David: We will partner with other companies who have partnerships with other institutions. For example, we're building a relationship with the University of South Florida, Vita in Canada has a relationship with Kentucky, University of Kentucky and one of the foundations that we're working with has a relationship with Cleveland Clinic. Through these relationships, we will look to these institutions for help in setting up these trials, finding the patients for these trials and they're not all going to be initially double-blind, placebo-controlled pharmaceutical studies with thousands of patients. You start off with small demonstration trials and then you work up from there. One of the trials I'm interested in doing is a trial using Marinol in a group of patients, in a trial using the same, similar subject of patients, using the whole plant extract and let's see what the difference is.
David: I believe there's going to be a tremendous difference. There's a tremendous amount to be done. This industry is in it's infancy.
Matthew: I agree, I agree. Best days are ahead. How large of a growing operation do you plan on building? How many pounds per year do you estimate you'll be able to yield?
David: Initially, our initial grow is 25,000 square feet of indoor grow and we look at 25,000 square feet of greenhouse grow and the green house grow will be produced mainly for making oils and extracts.
David: Over a five year period, our business plan takes us to almost 10,000 pounds a year, production.
Matthew: Okay, that's great. Looking forward, where you do you see the cannabis industry in five to ten years? I know that's kind of a tricky question because it's moving so quickly, but do you have any insights on where you think it's going?
David: I do. I believe that there's going to be a lot more controls, there's going to be a lot more attention to quality and consistency, there's going to be a greater number of products on the market and ways to administer it, but you're not going to have someone sitting in their kitchen making up a brownie mix and throwing some cannabis in it and wrapping it up, putting a label on it and selling it in a dispensary. I think dispensaries are going to get much more sophisticated. I think that you will see dispensaries that have private areas for consulting with patients. I believe you'll see the medical industry getting much more involved in the training of the patient specialists or bud-tenders, if you will. I see the medical side moving to a much more sophisticated place.
Matthew: Okay, that's good.
David: I think there'll be a separate recreation side.
David: I think the recreational information and marketing will be different than the medical and I think you will have separate dispensaries in the future, where one will be recreational and the other will be medical.
Matthew: Okay, good. Do the politicians and people in government that you've interacted with, do they seem receptive to moving forward in this direction or is there still a stigma?
David: There's no doubt there's still a stigma. One of the decisions we made as a company was to go public, tell people what we're doing, open up and show who we are and what we're doing and how we're doing it because we don't believe we're doing anything wrong. We don't believe we have anything to be ashamed of. It's just quite the opposite. We've very proud of where we're going and the ability to help patients. I've spent 40 years of my career working to help patients with pharmaceuticals. I believe in neutraceuticals, I believe in oriental medicine and I believe that cannabis has a huge role here. Once you sit down and talk with these people and show them some of the data and talk about the, really, atrocities have been done to this plant and to it's reputation over the years, than they listen. Having said that, we still have people out there that, no matter how much you educate them, what you tell them, they will be against this forever and think it's a horrible thing. Prejudice is a hard thing to overcome.
Matthew: That's true. Are there any areas in the cannabis industry that you feel investors should be looking at or excited about,\ or that you're excited about?
David: I'm particularly excited about extractions and what we can do. While there probably is, in my mind, no greater feeling than having grown a plant that has a big, beautiful bud, that's full of tri-tones and is gorgeous. I am looking forward to the extractions, to being able to manipulate the extractions and provide a really high-quality consistent product to patients. I'm looking forward to seeing children not suffer from epilepsy. I'm looking forward to seeing children not running around in a dazed manner with a look because they are so highly-medicated on really, really strong drugs that effect - not only do they prevent their seizures, but they also prevent them from living a normal life. I think that OxyContin is one of the worst drugs the pharmaceutical industry has ever produced. While it's very effective, it is also very debilitating. I look forward to medical cannabis virtually replacing that to its own great extent.
Matthew: Great, great, I do too. David, as we close, what's the best way for people to learn more about AltMed?
David: We have a website that is up, it's AltMed.co. Www.AltMed.co and then we have a Tweet site, which is @AltmedFL. Our Twitter site.
Matthew: Great. Then, assuming you get a license, how soon would patients be able to reach out to AltMed?
David: We are taking a great deal of risk in that, we are moving forward to construct our first growth facility. We should be pouring concrete in November, after the announcement. Depending on how long the rule-making takes, we will be prepared probably six months after the rules are issued, be able to provide treatment for patients.
Matthew: Okay, great, so springish 2015. Excellent.
David: That will be the earliest and that depends a lot on the government and the rule-makers.
Matthew: Sure, sure. Well, thanks so much for the interview, David. I really appreciate it. Again, the website is altmed.co for people that want to learn more.
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