Marijuana Business Magazine November-December 2019

Partnership PIONEERS Vireo Health and Ligand Pharmaceuticals CASE STUDY Marijuana Business Magazine | November-December 2019 80 Partnerships Driving Opportunity While some things have changed since Kyle Kingsley, CEO of multistate cannabis company Vireo Health, signed a licensing agreement with California’s Ligand Pharmaceuticals in 2015, partnering with a mainstream medical company remains challenging. “Attitudes have changed, but fundamental barriers remain—and they’re almost completely unchanged at the federal level,” he said. “I think it’s still pretty unusual to find a pharma company that will jump in bed with a U.S. operator. I think they’re much more likely to partner with Canadians or those that are federally sanctioned in the country in which they operate.” Still, Vireo (and other companies, see page 62) has managed to carve out research and drug-development collaborations with several other organizations, including: • Minnesota-based Park Nicollet Health Services, with which Vireo is developing drugs for stage 4 cancer patients. • Montefiore Medical Center at New York City-based Albert Einstein College of Medicine, with which the company is studying the impact of cannabis on adult opioid use. • New York City-based Norwell Health, which is collaborating with Vireo on an Institutional Review Board-approved research study into how seniors use cannabis for pain. • The University of Minnesota, which is working with Vireo on a study involving neuropsychological testing, DNA testing and seizure-control monitoring. • The University of Iowa, with which the company is working on a study into why and how older adults consume cannabis. “Our other arrangements are very heavily research-based, and they’re more formal partnerships where we are working directly with teams to do clinical research or provide patients with medicines that academics are researching,” Kingsley said. “We see these partnerships as the driver of opportunity for the next decade in cannabis.” But while partnering with mainstream pharmaceutical companies is part of Vireo’s plan, Kingsley cautions against considering Vireo a big pharma business. “We really see ourselves as providing plant-based alternatives to everything pharma has to offer. I don’t want Vireo to be lumped in as big pharma. We’re looking to be quite the opposite,” he said. “Can you imagine a reality where there are hundreds of options that are plant-based for everything that pharma has to offer? That’s our long-termmission.” – Omar Sacirbey He added that having scientific lead- ership was also “one of the biggest door openers for us.” “A pharma company isn’t going to have interest working with a cannabis company just because it’s a cannabis company,” he added. “They’re looking for scientific partners. They’re looking for a science company that works in the cannabis space. There’s nothing compelling about just a cannabis company. It has to be science-driven.” It also helped that Ligand was “a forward-looking company” that eschewed the cannabis phobia that kept its peers away from the plant—and that the agreement was relatively low-risk for Ligand. “For them, this was a licensing agreement, so they’re not terribly exposed on this. We’re the ones handling the cannabis; they’re not doing any of that,” Kingsley said. Still, Ligand performed extensive due diligence on Vireo, a process that took months of vetting and something that cannabis executives seeking similar collaborations should expect. “It takes many months of due diligence,” Kingsley said. “Even for a fast-moving organization like them. It takes time, and they have a lot of procedures to go through.” Kyle Kingsley Courtesy Photo