In this week's C-Suite, we spoke to John Fowler, President and CEO of Supreme Pharmaceuticals (CSE: SL, OTC: SPRWF), about going public, authenticity and keeping the focus on the plant.
What makes your company different from others in the cannabis space?
Supreme is differentiated in the market primarily by its management team. Supreme’s management team combines a variety of backgrounds, from cannabis cultivation to nuclear power generation. Everyone at Supreme, from senior management to our growers, possess a passion for the plant, an aspiration to always do better, and a shared mission to become the leader in scaled production of cannabis flowers, extracts, and products. To do this, we take a very long term view of the market, looking forward in years and decades. It is this team and our vision that moved us towards a large-scale greenhouse early in this industry, drove us to develop our hybrid model, and developed the opportunity to become Canada’s only B2B-focused, licensed producer.
How did you get into the cannabis space?
As a teenager, I learned to cultivate cannabis working in one of Canada’s legal MMAR gardens for a friend’s mother. It was there I developed a passion for the plant and a real respect for its potential. Over time I became interested in the body of legal decisions which created our medical cannabis system, which lead me to become a lawyer. For my practice, however, I ended up doing corporate and commercial work, leaving cannabis behind. With the creation of what is now the ACMPR I saw a perfect opportunity to combine my legal experience with my passion for cannabis. Supreme was born when I was fortunate to be contacted by a group of cultivators who shared my passion, had a vision bigger than my own, and were just crazy enough to embark on a journey to change the way cannabis is grown in greenhouses and to do so on an agricultural scale.
Walk us through a normal day.
Working in a greenhouse, our day revolves around the sun, which means we start early. Prior to starting my day I try to catch up on any industry news I may have missed from the previous day, and catch up on any emails, often from overseas, I received over night. Our cultivation crew starts at 8:00am and from then until 4:00pm when the cultivation day is done we work as a team to grow, nurture, and shape our plants on the way to becoming high quality cannabis flowers. On a given day I may deal with a number of tasks related to various aspects of the business – for example – capital markets calls, construction planning, production decisions and human resources matters. I love that each day can be totally different from the last, but the objective is always the same – to develop a great team capable of producing some of the best cannabis flowers in Canada.
What has been your biggest lesson about working in cannabis, and in business in general?
To me the biggest lesson working in cannabis is that the plants come first. Try as you might for standardization, at the end of the day each plant is unique, alive, and at times has a mind of its own. Plants don’t take lunch, don’t take weekends and grow and eat on every holiday. It can be a big transition to configure your life and business around the plants. The second lesson is that the hardest part of growing a business is recruiting, retaining, and nurturing our team. In the past year we have grown from about ten staff to fifty, and we’re looking at adding even more folks in 2017. Finding dozens of skilled, dedicated, and hardworking individuals, aligning them to work together, and making sure each is motivated to give their best to the plants and company has been our biggest challenge, and our greatest success.
What do you see as your biggest opportunity?
Our biggest opportunity is to develop a system for growing craft-quality cannabis at scale. I don’t believe that bigger has to mean worse, and our mission is to prove this. To date I think we have made great strides, and if we can complete our mission we will have a hold on a very important market segment – high quality, high volume cannabis flowers.
Do you have any thoughts or concerns about Sean Spicer’s statements indicating the administration’s intention to crack down on recreational cannabis?
Even under Obama we as a company decided not to operate or invest in the U.S., and that certainly has not changed. As a Canadian company we’re not worried. Our program is 100% federally legal and we have none of the issues associated with federal-state conflict in the U.S.
In Canada, I believe I am the only public company CEO who comes from the operations side of the business. As someone who has spent the last ten years with plants, with patients, and with the lawyers who have pushed to create our program, I believe I have a good understanding of the needs of patients. On the recreational side, I have spent a good chunk of my legal career considering and assessing various legal processes and pitfalls in legalization, including global drug policy research. I believe these combine to give me a great footing on which to craft a vision of the future.
What is the most frustrating aspect of the cannabis industry today?
I think the most frustrating but also the most rewarding aspect of the industry are the regulations. Cannabis in Canada is hyper-regulated, which at times can be a pain. However, at the same time the regulation has caused us to move leaps and bounds in our efficiency, organization, and maturity as a company. Navigating the regulations is also a challenge, which creates a barrier to entry and helps us grow our business with limited competitors. Furthermore, the detailed regulations help to ensure our medical and future recreational legalization efforts are not derailed by unregulated activities or shady operators.
What would you say to those who are considering investing in your company?
I think cannabis is a great opportunity for investment. There is always risk in any investment, but here that is balanced against a unique macro event: global legalization. This is an opportunity bigger than the legalization of alcohol. Alcohol was only illegal for a bit over a decade in the U.S., and generally not criminalized elsewhere. Cannabis has been prohibited globally for almost a century. Supreme is an opportunity to participate in the future growth of the Canadian and foreign markets, with a team committed to building and operating a leading company and a business model which is designed to take advantage of the rapidly growing demand for legal cannabis.
What are the biggest challenges of being a publicly offered cannabis company?
Going public offers a number of advantages, primarily cost of capital, access to capital and ability to connect with a wide range of investors. However, being public also comes with its own challenges. Our primary challenge is making sure we can craft a long-term strategy that will create sustained value for our shareholders, keeping in mind that market pressures tend to have a short-term focus. For example, sticking to a strategy in the face of short term volatility is something I believe we do well, but it is not always easy. This all needs to be done while maintaining our primary focus of building a successful cannabis business. Overall, I feel strongly that, for Supreme, the benefits of being public vastly outweigh the challenges.
What advice would you give to anyone looking to get into the cannabis space?
Just do it. This is an industry on a growth-trajectory of a lifetime and its growing and changing daily. If you have interest, the key is to get involved. Even if that means moving to Canada or moving to a legal state. If you want to be in this business, get into it and do it as soon as you can.
What are your biggest tips for branding cannabis?
I believe strongly the key to lasting brands is authenticity. When branding your product or company, think about what sets you apart, why a consumer should choose you, and what impression you want to leave on every individual who touches your brand. It’s not enough to have an answer, you have to live it and breath it every day as a company. If you can do that, you can build a valuable, lasting brand.
Do you see any big changes coming in the future of cannabis?
The biggest change in the near term will be regulation. We have a clear timeline of legalization for adult recreational use here in Canada of July 1, 2018. I believe Canada will be first of many that will legalize cannabis for all adults, and an even larger list of countries will do so for medical purposes. In terms of the consumer side, I think we’ll see an evolution of products and technology for both production and use of cannabis. Even with this evolution, we believe firmly high quality flowers will remain the backbone of any cannabis industry for the foreseeable future.