An entrepreneur who helped sow the seeds of Canada’s emerging medical marijuana industry is among those poised to reap the rewards, as licensed growers gain legitimacy in the eyes of investors and the federal government edges closer to legalizing recreational use of cannabis.
Guelph-based medical marijuana start-up MedCannAccess was purchased a year ago by Canopy Growth Corporation, the first cannabis-producer in North America to be listed on a major stock exchange, trading since July under TSX ticker CGC.
Unlike most entrepreneurs who sell a venture and soon move on to other opportunities, MedCannAccess co-founder Rade Kovacevic made the jump along with his company, first to the role of Head of Business Development and Customer Experience with Tweed, one of Canopy’s core brands, and now as Vice President, Sales and Customer Experience at Canopy.
Kovacevic has been involved in the nascent medical marijuana sector since 2006. He had pivoted through a couple of business models before he began working with Innovation Guelph in 2012 and co-founded MedCannAccess in early 2013. At that time “the idea of medical marijuana was met with extreme skepticism,” he says.
He did several entrepreneurship courses at Innovation Guelph and secured funding for an executive in residence position, bringing Mark Goldberg (a current Innovation Guelph mentor) on board. Working with Goldberg, MedCannAccess raised more than $3 million in seed funding and developed a “recruit demand” strategy, as the company built out a unique retail storefront presence that focused on customer experience. Innovation Guelph’s Steve Barrett also took on a mentoring role and Goldberg became chair of MedCannAccess’s Board of Directors.
“It was about bringing the conversation to main street, helping people learn about the process of accessing cannabis legally,” Kovacevic says. At the time MedCannAccess was the only legal medical marijuana operation to offer direct client care, with storefronts in Guelph, Etobicoke and Hamilton. All the other legal medical marijuana businesses in Canada were focused on growing the product, the “supply side” of the equation.
“It was about bringing the conversation to main street, helping people learn about the process of accessing cannabis legally.”
For Kovacevic and his two partners – Blaine Dowdle, now Head of Business Development at Tweed, and Kevin Furet, now Master Grower at Tweed – MedCannAccess had a lot going for it: three retail locations, a deep understanding of its market and what products would be desired going forward, knowledge of how to produce a quality product, an innovative client acquisition strategy and a minority stake in a R&D company focused on moving the industry from dried marijuana to more complex products. But there were hard realities as well, and business strategy eventually turned to positioning the company for acquisition by a larger player.
“It made more sense to be acquired by someone that had first mover advantage, access to more capital and built-out production facilities,” Kovacevic says. Canopy came calling, purchasing MedCannAccess and putting the storefronts under the Tweet Main Street banner, eventually adding a fourth location in Barrie.
“Tweed is a very fun, enjoyable place to work and Canopy is a great start up culture, despite its size of more than 200 employees,” Kovacevic says. “It is still a very entrepreneurial atmosphere and start-up culture. A much bigger team of extremely talented people and more resources.”
Through its wholly-owned subsidiaries, Tweed, Tweed Farms, and Bedrocan Canada, Canopy now operates three state-of-the-art production facilities with more than half a million square feet of indoor and greenhouse production capacity.
Recent developments include a partnership with Delivra Inc. to supply topical cannabis-infused lotions and creams as well as a marketing partnership with rapper Snoop Dogg.
As a dyed-in-the-wool entrepreneur who started his first company at age 13, Kovacevic says he has always focused on doing things he enjoys, and that is what he’s found at Canopy. “It’s a massive platform to pull all of these things off. Revenues and customer base have historically grown by over 40 per cent quarter over quarter. Given the pace of growth and opportunities ahead, it just continues to have this exciting atmosphere that traditional entrepreneurship would have. It’s more about the fun of the work.”
Canopy president Mark Zekulin “brings really talented people together and lets them do a good job,” Kovacevic adds. “Canopy now has by far the most diverse growing platform, diverse brands, and diverse client acquisition strategy in the industry. It has the most ability to scale in the industry while at the same time being extremely agile.”
As for the skepticism that has long dogged the medical marijuana sector, well, Kovacevic says that’s slowly being put to rest. Canopy’s debut on the TSX in July was a “important step forward from an industry as well as a company perspective,” he says. “Now our stock is on the same board as the Royal Bank of Canada.”