An evidence-based, scientific approach is how
Avicanna Inc. (
TSX.AVCN,
OTC: AVCNF,
Forum) gains its competitive advantage in the medical cannabis sector. The Canadian biopharmaceutical company has spent over four years in research & development before creating its medical and derma-cosmetic products, now successfully commercialized in Canada and beyond, with advanced pharmaceutical products in the pipeline.
Hard work is paying off as Avicanna now is an established leader in the cannabinoid space, acknowledged by TSX as one of the best performing healthcare stocks in Canada.
Avicanna conducts its research within the Johnson & Johnson Innovation Centre at MaRS Discovery District in Toronto and works alongside world-class clinical and educational institutions like the University of Toronto and The Hospital for Sick Children.
The company uses a low-cost, vertically-integrated business model whereby it cultivates its own medical cannabis at two large, sustainable plant operations in Santa Marta, Columbia and manufactures the products as well. It’s currently looking to further its work in the medical community by proving through science that its plant-derived cannabinoid-based products can make a tangible difference.
Stockhouse Editorial caught up with CEO Aras Azadian to tell us more about what Avicanna is working on and what it’s planning to accomplish next year.
Q1: The boom and bust of cannabis companies has not affected your progress and growth. Why is that?
Aras: We continue to focus and execute on our own differentiated business model and competitive advantage which has always been about standardized medicine. Avicanna is focused on a segment that is less competitive, has higher entry barriers and is less affected by the capital markets fluctuations experienced in the sector which is why we continue on our path less affected by the macro sector factors.
Q2: How significant is it for the business to have an integrated source of supply? Are there any disadvantages or constraints for expansion?
Aras: Given that this is still a new industry where regulations and companies are still being formed, there are too many uncertainties and therefore our vertical integration is essential for the quality controls and supply chain. Additionally, Avicanna’s advantages in the supply chain, including our low cost and sustainability aspects, make our finished products further competitive.
SH: Your relationship with Johnson & Johnson is unique. You are the only cannabis company headquartered in the Innovation Centre JLABS in the Toronto MaRS Discovery District. What advantages does this provide you with?
Aras: We were the first, and to date the only, cannabinoid-related company to work with J&J and be a part of JLABS since 2017. Back then, it was a huge validation of the company’s credibility, dedication to science and ethos. We continue our collaboration with them and have evolved from an incubator-stage company into a vertically-integrated and commercial-stage company with the same vision and dedication to science and quality that got us into the lab in the first place.
SH: You have a diverse line of medical cannabis and consumer retail products (sold under the label Pura). How is each category performing and where do you see the future emphasis?
Aras: Both are doing well, but as a medical company our focus and priority will always be our medical products which have now been successfully launched in Canada and Colombia. This provides the company with an incredible proof of concept, early revenues, and valuable data around the efficacy of our products, which is very important for our mid-term and long-term strategies as a pharmaceutical company.
SH: Your medical cannabis products are available for purchase through the Shoppers Drug Mart online platform. Are there other large drug store chains selling similar products now? Are there similar products available in Canada?
Aras: Our products have had the most successful launch on the Shoppers Drug Mart channel to date and I believe that is attributed to the quality of the products which are differentiated from the competitors in many ways. There are several other brands and numerous products available on that channel, but they are predominantly products produced by recreational companies whereas our products are for medical/wellness use only. This means our products are non-inhalation, controlled-dosing, pleasantly flavoured and consistent.
SH: Avicanna also has a pharmaceutical pipeline for indication-specific drugs. Can you elaborate a bit more on this opportunity?
Aras: We are currently in clinical stage on several of our indication-specific drugs including chronic pain, neuropathic pain, and epidermolysis bullosa (a group of rare genetic skin conditions). In addition to that, we are in a drug registration stage for chronic pain, epilepsy, and anxiety in LATAM as well. These projects, while more mid-term to long-term, are the core of Avicanna’s vision to be the leader in the pharmaceutical segment of cannabinoids.
SH: How do you see the decriminalization of cannabis in the USA impacting your business? Does it create more opportunity or more competition?
Aras: It provides tremendous opportunity for us from several perspectives. First, I believe that pharmaceutical companies will be more open to entering and analyzing the industry, which provides Avicanna with an incredible edge as one of the leaders on that front. I also believe we will see the emergence of more sophisticated capital, which is a good fit for us. And finally, I believe in the potential pathway to a federal medical program whereby our medical products could be sold at a Walgreens similar to how they are now being sold at Shoppers Drug Mart in Canada. I strongly doubt Americans will want to buy their medical products only from dispensaries and a more official pathway is a great fit for us.
SH: Do you see the growth opportunities being greater in geographical diversification or new product development? What plans can you share with us for new markets and new products?
Aras: We believe that the potential for medical cannabis to treat several unmet medical needs is now clear and more regulatory progress is being made every day globally. By focusing on geographical diversification, we have an opportunity to establish a leadership position with our medical products globally. That being said, we are constantly working on research & development, so the new products will be coming in all product lines (medical cannabis, derma-cosmetic and pharmaceutical).
SH: You have just closed a $5M private placement. What do you intend to do with the proceeds?
Aras: This is the first prospectus offering we have completed since going public and the first raise above $5M since 2019 as our focus with previous raises was on limiting share dilution. This raise however comes at a fantastic time for the company as we intend to use the proceeds to advance our commercial efforts in several countries and pave the way to profitability for the company.
For more information, please visit
www.avicanna.com
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.