VIDEO: Canada House Wellness is a Fully Integrated Company that Validates Medical Patients
Canada House Wellness Group Inc. (CNSX:CHV) (OTCMKTS:SARSF) (FRA:509A) began as veterans helping veterans with cannabinoid therapy, but has recently expanded to serve other patients. Director & President of Marijuana for Trauma Riley McGee says the recreational cannabis market will not expand as others predict, which is why the company is focused on patient care, instead of production. “We have to recognize that demand already exists through black market channels,” he says.
James West: Riley, thanks for joining me today.
Riley McGee: Happy to be here.
James West: Let’s talk a bit about Canada House Wellness Group – tell me exactly what you do, and what sort of ground do you occupy in the cannabis sector?
Riley McGee: Canada Wellness Group is a publicly traded parent company. We’ve got three wholly owned subsidiaries – Marijauna for Trauma, who’s our patient aggregation, our frontline clinics treating, they’re brick and mortar specialty cannabinoid therapy clinics treating patients and clients on the front lines, essentially.
Knalysis Technologies is our technologies division, which is developing and has developed a cannabis patient management software that we use to manage our patient base, as well as collect data on the treatment protocols that our patients use. And Abba Medix is our licensed production facility that will be providing production to our existing patient base.
James West: Oh, so you’re an ACMPR licensed grower or soon to be?
Riley McGee: We were licensed September 1st; we have a cultivation license. We have our genetics arriving the week of February 12th, and we should be popping those seeds and starting to get growing by the end of February.
James West: Oh great, that’s exciting. Okay, so what’s your growth footprint look like at this initial outset?
Riley McGee: Right now with Marijuana for Trauma, we’ve got close to 10,000 medical patients; we’re moving close to 500 kilograms of cannabis monthly through over 20 licensed producer partners. Abba Medix initial production, we have 15,000 square feet currently developed. It has 8,000 square feet of grow space, and it will be putting out 2,100 kilograms annually once it’s in full swing. We do look to scale up production dramatically, but our production at Canada House Wellness Group will always be a function of our growing demand.
James West: Okay. And where is that located?
Riley McGee: Abba Medix is located in Pickering, so here in the GTA.
James West: Oh, great, okay, it’s nice and close. That’s interesting. So tell me about the various revenue models and how they all fit together.
Riley McGee: So Marijuana for Trauma creates revenues through administration fees as well as service and education agreements we have established with over 20 licensed producers. So that’s how we create revenues servicing the medical patient, and we invest a lot of that back into helping improving those processes and improving our client experience. Knalysis Technologies started out funded by MFT to develop this cannabis patient management software; now we’re licensing that software into the States, to other clinics where we help them with their online registration process, as well as managing all the documentation that’s required with cannabis prescriptions, even south of the border.
James West: Software as a Service sort of model?
Riley McGee: Exactly. So we’re licensing that software and there’s some great revenue potentials there, as well as selling the data. So there’s a few data publications we’re involved with south of the border: New Frontier Data, through Arcview, you may be familiar with.
James West: Sure.
Riley McGee: We’re looking at cooperating with them on certain data reports, and people who have subscriptions to those data reports are already beginning to create some revenues. And then Abba Medix, obviously, will create revenues by selling our medical production directly to our established medical patient base.
James West: Interesting – that is fully integrated. So then what’s your, I guess, sounds like you’re pretty much medically focused and not looking at the recreational market?
Riley McGee: Yeah. Canada House Wellness Group is looking at the recreational market. We are developing a strategy for that, which I’m very proud of, and we’ll be announcing much more on that strategy later in the year. I don’t see the rec market as looming as everybody else; I think by the end of July we’re going to know what the Cannabis Act looks like, but I don’t think we’re going to necessarily have the recreational market here. I also look at the amount of production that’s ramping up and you know, as a COO in the cannabis space, I don’t see production as the number one thing right now; I think we’re going to eventually have an abundance of production.
We also have to keep in mind that we’re going through this whole process to regulate an existing market. That means an existing demand and existing production. So we can estimate how big the rec market is going to be from a demand perspective, but then we have to recognize that demand already exists through black market channels.
James West: Right.
Riley McGee: So you know, I think we want to take a much more conservative approach to production, and we want, like I said earlier, we want our production to be a function of our known demand.
James West: So how do you acquire the patients? Do you have physical locations?
Riley McGee: That’s right, we’re one of the few specialty cannabinoid therapy clinics that have brick and mortar locations. So we see patients in our clinics, as well as on the Cloud, but mostly in our clinics. And what we’re trying to do, and where we see a real issue, is when you talk to Health Canada, you listen to what our politicians are saying, right now they’re charging taxes on medical cannabis purchases, they don’t know how to differentiate, how to validate a medical patient, and that’s really what our processes do. We interact directly with treating physicians, with primary care physicians and networks; and then we use our own cannabinoid therapy educators, who are all licensed practical nurses or registered nurses at all of our locations, to intake that patient, screen them, check contraindications, provide them with a recommended treatment protocol, connect them with two or three licensed producers, and then kick that information back to the treating or referring physician.
So we really validate that process which in the future we believe will give insurance companies the confidence that they require to provide insurance coverage for that patient, and allow the government to say hey, we’re comfortable not charging tax on this prescribed medication, just like every other medication, because you guys validate that medical patient.
James West: Wow.
Riley McGee: I believe a lot of the medical patients in the space right now are using the medical market in lieu of the recreational market. I think that’s what the government sees and that’s why they tax it, and that’s why they have concerns. So if we’re able to validate that medical patient and differentiate them, we can help them with the coverage, we can do a service to the community and to the government and the regulators.
James West: You bet.
Riley McGee: At the same time, we collect the data, and use that data to produce evidence based treatment protocols which will help us help patients.
James West: Sure. That’s interesting. I think your bang-on. Where is the closest location to downtown Toronto?
Riley McGee: The closest Marijuana for Trauma location is in Trenton. We’ve got one in Kingston and Ottawa and Petawawa; I’m a veteran myself, we are founded by two veterans, and our focus to date has been veterans. So we’ve expanded our service protocol to include civilians this past year, and we look to expand into more civilian-centric spaces.
James West: That’s interesting.
Riley McGee: You can look to see MFT expand dramatically this year.
James West: Okay, that’s great. We’re going to leave it there for now, Riley. It’s really interesting. We’ll follow with interest, come back to you in another quarter’s time and see how you’re doing. Thank you for joining me today.
Riley McGee: Appreciate the opportunity. Thanks, James.
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