CFN Media Interviews George Scorsis of Liberty Health Sciences
November 6th, 2017
News, Top News
As the global cannabis market begins to flourish, the number of licensed producers throughout the world is expected to rise dramatically in only a few short years. Liberty Health Sciences (LHS:CN) is committed to producing quality, pharmaceutical-grade cannabis products that are affordable for all patients; the company acquires and operates U.S.-based medical cannabis companies and applies their model in order to ensure optimal output and growth. CFN Media recently spoke with George Scorsis, CEO and Director of Liberty Health Sciences, to learn more about how the company is setting the standard among licensed producers and optimizing returns to investors.
Rachelle Gordon: What is Liberty Health Sciences and what is their approach to the legal cannabis industry?
George Scorsis: The purpose of Liberty Health Sciences is to expand in exclusively medical states within the USA. Our first touch off in the US was Florida, where we have acquired 100% of a license. We are currently active in the cultivation, processing and dispensing of cannabis and cannabis derivatives in that state. We strictly focus on medical markets because that really is where our interests lie. We do have a model in play that guides us into every market that we enter into, and it’s based on a few principles that are quite easy, but really is what we live and die by.
The first is that we are looking for strictly medical. There’s certain markets that we’re interested in; Florida obviously was our first set off point, but it’s a medical market first and foremost. We will not enter into states currently such as California, Oregon, or Washington State. We will enter into states such as Florida, Texas, Pennsylvania, Ohio, Connecticut, or Maryland. The second filter that we use is that they’re highly regulated markets. Most people would shy away from regulated markets. We like to enter into them because we use the highest standards in our cultivation processing than anyone I’ve ever seen, and that’s in terms of our SOP applications, our QA and our QC.
The other piece that we find interesting is that we like markets that have no canopy restrictions. With no canopy restrictions, it allows to grow our greenhouse scale to the level that will allow us to commercialize and take advantage of our low cost growing, which provides us a competitive advantage in the end. Again, it would exclude markets such as California and some of the other ones that really lean towards smaller scale growers.
And then the last piece that we look at is the commercial viability of the marketplace, and what that leads to is how many chronic conditions are permitted by the regulators. As you’re familiar, there’s been many states that were extremely promising, such as New York that only allowed a very narrow span of uses for patients. We evaluate markets. We take a very stringent approach to how we analyze whether they’re viable or highly analytical. For instance, Florida allows enough chronic conditions that over 30% of the population could be considered to use some form of cannabis or cannabis derivative to help with their ailments.
Those four things are really our disciplines that we use when we enter into the markets, and that’s why Florida was extremely exciting.
RG: What is your model of acquiring, capitalizing and operating US-based cannabis companies and how you add value to them?
GS: As we all know, this is an extremely capital intensive business. We are able to raise enough capital to build our facilities immediately off the get-go to the levels that we find effective in every marketplace.
We think that we would grow to a scale, or build to a scale a cultivation center that not only is beyond 100,000 square feet, but also has the automation, the QA, QC, and the lab that would allow us to act like a pharmaceutical-level medical provider. That is why it’s important for us to do it right from the beginning; to have the capital to be able to do it, and as a result of us being publicly listed on the Canadian Stock Exchange, we do have access to capital versus many of the other players in the US.
RG: How does your commitment to providing lower cost, pharmaceutical-grade cannabis products benefit the end patient?
GS: In three ways, and all of them are extremely important. First, our cost structure is lower than anybody else’s in the marketplace. This allows us to provide more affordable medicines to patients. In the US currently, most traditional medicines are covered under some form of insurance. Cannabis is not. In order for us to be a viable and safer alternative than what I would call traditional medicines, we need to ensure first and foremost it’s accessible, and accessibility really comes down to cost. We pass on the cost savings to the patient to ensure it’s more accessible.
The second piece is we really focus on medical-end products. It’s about our safety, our QA, our QC, and our cultivation standards. We have never and will never use any pesticides in our cultivation. Our labs are at pharma grade. That is important because we need to ensure that we have a safe product.
The third important aspect is that we truly focus on measured dosage applications. We are ensuring that the way they are provided, we give proper guidance in terms of how much to use, how many MLs a day. We also have measured dose vaporizers that actually track data points that control every inhalation, that track everything from how much it’s reduced pain, to the altitude, the temperature outside, or what time of day they’ve done it because this is important information the physician needs to provide optimal treatment.
We do not look at the traditional flower as the most recommended option for our patients. We really move in other ways: oils, encapsulation, measured dose vaporizers, or transdermals. We look at alternatives that physicians would be comfortable with using. The reason being is the physician is the gatekeeper in the communities that we work with, and physicians have been trained traditionally to work on dosage rates, titrations, time of day. And for us to be known as the leader in medical, we also produce products that work in that manner.
RG: What exposure do Liberty Health Sciences investors have to the regulated cannabis industry – both geographical and segment?
GS: Our stringent investment criteria for acquisition targets ultimately reduces investor risk and aims to maximize our shareholder value. We take an extremely disciplined approach. We prioritize markets by using four filters. As discussed, we look for established, highly-regulated medical markets that have restricted cultivations licenses, no canopy restrictions, and then most importantly we ensure it’s a viable commercial entry point by having enough chronic conditions permittable that we have a large enough volume of entrants of patients into the marketplace.
We’re going to continue to target our expansion in key markets in the US that are exclusively medical. We are great at cultivation. We are very effective in vertical platforms, and are medical grade first and foremost. This really ensures that our investors know at any given point where we’re going to be, how we’re going to generate revenue and continue to be profitable moving forward.
RG: What makes LHS a distinctive company and investment with respect to its industry expertise, US market assets, and the ultimate alternative remedies its patients receive?
GS: First and foremost, we hold ourselves to the highest standards and have the unique benefit of leveraging the world’s leading pharmaceutical and agricultural expertise through Aphria. One of the largest licensed producers in Canada, Aphria owns a 38% stake in our business. But what really is unique about our business is that not only do they have 38%, but they’ve also provided the IP knowhow that allows us to be the lowest cost producer of cannabis in most of the markets that we enter into. Many individuals in the US space do not currently have that level of expertise in terms of commercializing a cannabis operation, where we have four years of experience in advance to anybody else.
It’s also about us applying cutting-edge technology. For example, our recently announced partnership with Resolve Digital Health Inc. will see Resolve’s industry-leading smart inhalation products exclusively distributed through Liberty within the state of Florida. Their industry leading product measures every aspect of how that inhalation happens. It ensures patients are taking the right dosage rates, and for us that is truly the platform. We are not a recreational company. We don’t care to be a recreational company. We care to be the highest standard within the medical platforms, and that’s why regulators see us as leaders.
RG: What are the company’s plans for growth along with the expected global expansion of the cannabis industry?
GS: The US is one of the largest opportunities globally, and being an organization from Canada culturally we are very similar and we are very close geographically.
Some of the projections coming out state that medical sales will be over $13.3 billion by 2020. If we are able to continue to be the leader in medical within the US and continue to expand in states that have medical cannabis approval systems, then imagine what we could capitalize.
In the short term, we continue to focus on the medical space, while ensuring we take a disciplined approach to our expansion and growth. We are excited at what the future holds.
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