Marijuana Business Magazine - Issue 09, Oct 2017

Q&A Five Questions with Neil Closner, CEO of MedReleaf M edReleaf is locked, loaded and ready to grow. The Ontario company is flush with money as it prepares for the anticipated rollout of Canada’s recreational marijuana market next summer and the major changes sweeping through the nation’s cannabis industry. MedReleaf – based in the city of Markham – recently raised 100 million Canadian dollars ($79.5 million) through an initial public offering and a secondary offer- ing of its shares. The company is taking steps to put the money to productive use. MedReleaf, for starters, plans to expand its local production capacity more than fivefold to meet demand for both the medical and adult-use markets. It also plans to expand internationally. In an interview with Marijuana Business Magazine, CEO Neil Closner discussed consolidation within Canada’s cannabis industry, how he is positioning MedReleaf to capitalize on the medical and adult-use sectors, and whether the recent flood of capital raises among MJ com- panies is sustainable. Do you foresee industry consolidation, with smaller growers getting purchased by more established companies? If they struggle, then there will be an opportunity for consolidation and for assets that will be on the market. Preparing for a Sea Change in Canada by Matt Lamers This is not an easy industry. It’s not easy to service patients, to grow high-quality product. It’s a difficult business. But there’s no doubt that some of them will figure this out. Some of them will be formidable competitors. Given that there’s likely going to be dozens if not hundreds of new license holders, there’s no doubt that some will stumble. How do you balance the opportunity between medical and rec from a business standpoint? The question really is about how we balance inventory and product availability. That’s the question all produc- ers are going to have to wrestle with to one degree or another. We recently went public and raised CA$100 mil- lion. Those dollars are now being allocated to build out capacity. We’re hoping to have substantially more capacity com- ing a year from now. We’re hoping that will enable us to serve both markets. It will all depend on how quickly the adult-use market ramps up in terms of our ability, as well as our industry overall, to satisfy that demand. Right now we are very committed to the medical mar- ket. Any excess capacity we do have, as long as it doesn’t come at the expense of serving our medical patients, we’ll find a way to allocate to the adult-use market. 16 • Marijuana Business Magazine • October 2017