CFN Media Exclusive Q&A with HollyWeed North Founder & CEO, Renee Gagnon
September 11th, 2019
The North American legal cannabis industry may be young, but clear leaders are already emerging in the space. One of the most dynamic voices in the marijuana market is Renee Gagnon, Founder and Chief Executive Officer of HollyWeed North. The world’s first federally licensed transgender female cannabis public company CEO (she founded Thunder Bird Biomedical, now known as Emerald Health Therapeutics [OTCMKTS:EMH-X]), Gagnon has built a women-centered team dedicated to setting the bar high for both research and manufacturing. HollyWeed acts as a publisher, licenser, and distributor for its trusted partners and has already inked deals with some of the biggest players in the game, including Canopy Growth, and is planning to hit the public markets early next year.
CFN Media recently spoke to Gagnon via phone to learn more about HollyWeed North’s history, their plans for global domination, and what it means to be a role model in an industry as unique as cannabis.
CFN Media: How did you come to found HollyWeed North?
Renee Gagnon: I was lucky enough to be in the R&D program in Canada back in 2013. I was one of the first federal licenses in 2014. I was the 4th public cannabis company to go public in September of that year. I stepped away shortly after that to transition, and about five months after that, Caitlyn Jenner came out and explained to everybody what was going on, so that really helped change things. In the interim, I spent a couple years traveling in the United States, involved with women’s organizations in cannabis, and that’s when I got some ideas about service provisioning and the essential role it might play.
When I got back to Canada and my non-compete had run out, I was able to reform an entity and go back into the licensing game. But I didn’t want to be a farmer, I wanted to be the subsequent producer of other stuff. And thus the company was born. Except this time, I wanted to do something different.
Because I had been an LP and one of the first ones, we invented everything we did, and it was a very expensive learning process. I didn’t want to repeat the mistakes I made the first time or discover new ones because we hadn’t gotten to that point in the story yet. I’m a big fan of get one thing right. Small, then scale. This time I wanted to focus a bit more differently, so my second in command, literally the number 2 employee after myself, was one of the leading pharma QAs in Canada. The reason I brought her on first was I wanted a chief compliance officer that reported to the board because having been a licensed producer, I was concerned the quality assurance normally gets firewalled well below the president level. There’s no way that a board can manage or make decisions without having direct reporting, understanding, and whether or not we were even in compliance.
I, as the CEO, don’t have on-the-ground time. I’m busy expanding on the company and doing a bunch of other things, and I thought it was too important to leave below president level, and just for everybody’s benefit, I thought it was important that we built our corporation from an entire quality assurance perspective and a pharma core, and not try to duplicate either the black or gray markets way of doing things. I just went straight to the extremism of pharma.
CFN: Tell us about your processing partnership with Canopy Growth?
RG: I spent basically most of 2018 trying to explain we were going to be a processor, and folks didn’t understand what that meant in Canada, and they couldn’t understand why a third-party would be involved in this because everyone had been sold on the vertical integration line.
I was basically trying to explain last summer that there isn’t really a way to scale zoning or concrete buildings. When those two are dependent on people approving legislation that hasn’t fallen, or let’s say they have negative zoning against certain new modalities that just because you’re allowed to make them, doesn’t mean your municipality will let you. Very similar stories in California.
But folks in Canada have, shall I say a rather Pollyanna-ish view of it. I knew from having done it, that it all comes down to space and zoning. If you’re already full of plants, you have no room to put in anything else, and zoning takes time. License application is for new building. They didn’t like combined activities. There’s a lot of stuff that being a producer in Canada is complicated.
What I figured we would be able to provide is basically surge capacity. What that means is for the licensed producers, it’s inevitable they will vertically integrate at some point. That’s either the desire or the goal of most of them. But in the interim year or two leading up to those eventual things, we can provide a scale service for them that allows them to hit their sales goals, meet all their business needs without having to deploy more capital at either building up their own facility, which again, most of them are, but it’s time-delayed capital. They may have spent it a year ago, but it may be another year before they have facilities operating. And it may well be that they max out their capacity at those facilities just from their own grow activities.
So, I’m sort of handy to have around as an on-demand surge supply management service. If you’ve got extra crop that you want to crank down, we can do that. If you need us to store it, we can do that. You want us to turn it into something more valuable and put your name on it and ship it out for you, we can do that, too.
This is trying to avoid the problems of Oregon, where basically, everyone’s sitting on a mountain of steadily declining valued cannabis, and there’s nothing you can do with it. My job is to work with the LPs so that any little bumps in their supply chain can be filled with surplus, or if they have surplus, removing it from the marketplace so prices don’t get out of whack.
CFN: What do you anticipate when Canada rolls out extracts and edibles later this year?
RG: “Typically Canadian,” in with asterisks, asterisks, asterisks. What I mean by that is, first off, it was announced to much fanfare with a “insert stuff later” clause. In July we found out what they kind of meant by that, and it was more narrowly defined but still not particularly clear. We have such guidance as, “You can make an edible, but you may not call it a candy or anything that sounds appealing. You can’t use existing flavors that are branded to anything. You can’t use alcoholic brands, a wine or anything else.” So those guys who made all their investments are kind of bummed. “You have to make it unappealing in shape, color, and flavor to children.” I can assure you, no company has ever paid scientists to discover what the hell that one is. They’ve spent billions on how do we make it more delicious, crack-like, and ingestible by children. No one ever sat down and said, “How do we make a product that literally gags them?”
We’ve been charged with that. We can’t make it look pleasant. Whoever had to make a consumer product that wasn’t appealing? We’ve been given these bizarre government haikus, and a lot of people are complaining and whining, but this is part of the Alice in Wonderland part I like. It’s a test of your flexibility. Can you figure it out?
We had one last week on edibles where two of the provinces were rumoring, wanting to have 25 degree Celsius shelf storage for edibles. Twenty-five Celsius. That’s like 80-plus Fahrenheit. It literally cooks stuff at that temperature, and there’s no pharmaceutical product that you can hold at that temperature and remain stable.
This is the kind of weird crap we have to actually do. We don’t even know if you can make something that won’t melt at 80 degrees. But hey, guess what? We have to try because there’s two provinces that won’t let us play. We don’t know if it’s because they don’t want edibles or they just don’t understand what they’re made out of. But there isn’t a consumer food product that has to meet those very weird requirements.
But cannabis is the whipping post for every sad and upset department in government that never had a say in a subject matter before, like alcohol or tobacco. This is the time to get their licks in, so the folks that hate vaping, they want to have their say on how they vape cannabis and they couldn’t tell the tobacco guys.
It’s very complicated right now, and the real, I think, killer skill to have in this industry is if you live through the internet and survive.com and figured all that crap out, this is what you need to know in cannabis now. It is pivot time. I like to say that you better get so good a pivoting you’ll call it ballet.
CFN: What else sets Hollyweed apart?
RG: Part of my thing was after spending all this time with all the women and minority entrepreneurs in the states, A) I realized in Canada, our women and minority entrepreneurs wouldn’t even get a shot, and 2) the ones in the states would be wiped out when it’s scaled to federal because there was this massive knowledge gap on everything from every level from beginning to end, and money can plug that gap. You can buy consultants, and that will be solved by the typical really rich white guy crowd. They’ll figure all the crap out. They always do.
The 47% female entrepreneurs that I saw when I first got into this is down to the low 30s now. How do I get that number back up? The only way I can get that number up is if we put our company basically at the service of others. So, what I really am creating is essentially a publishing company for cannabis.
The folks that have legacy products in the marketplace, that have already developed them, already developed their intellectual property, they know what their stuff is. They’ve got what I call “legacy rights.” We can help them transition into the marketplace and produce their products because their formula may not be right. In some cases, it may be toxic. Again, these were home developed, largely without analytical or lab.
Then there’s all the other stuff that has to go into it, and then inevitably clinical trials. We bring over 7000 clinical trials in pharmaceuticals and whatnot to the game, and we want to provide that as a publishing service. Although we can’t really do this in the United States at this time, we can actually allow American manufacturers to produce products that can get Canadian shelf space. We look at that as a way of banking their intellectual property for when the United States opens up. They’ve at least got a well developed and documented and scientifically validated product ready to go back into the United States.
Part of the reason why we don’t make our own products is because it would create this competitive environment against our customers. So, that’s why we’re focused on this service. I know people really want to see HollyWeed weed, but that isn’t really what our function is. We’re going to be the brand on which other brands stand. That’s our role, and we see it as a very long-term role. We can see this for the rest of the industry, and we’ll support the folks that want to grow, the folks that want to make creams or bath balms. Everyone’s got a dream, but not all of them are fundable, standalone companies.
That era’s kind of passed, and I don’t want to see those dreams die, but how is there a practical way where everybody participates, gets paid, and you still get that benefit of community, which is really why I think everyone was banding together. The hopes of economy of scale that you get in a farming community. It’s not fundable by Wall Street or Bay Street that way. A company has to choose to do it. Several companies have to choose to do it and not compete against their client base. That’s a business decision in and of itself, and I’m good with it.
CFN: You’re considered a role model for many females and members of the LGBTQ+ community. How do you handle that responsibility?
RG: As a responsibility, it’s the only reason why I’m out publicly, professionally. I had the ability to leave my private life off the table and just talk about business, but the very first time I spoke at Women Grow, despite the hundreds of women that talked to me after I got off stage, there was a fellow that was standing off to the side who desperately wanted to talk but didn’t want to interrupt. I finally broke away and went over to talk to him to see what it was that he wanted to chat about, and his child had just recently expressed who they were to their family. And they were going through the first earthquakes and the family divisions and the fights and everything. He just wanted to say thank you because he had seen that there was an elder life for trans. He thought his child’s life ended at that point, and seeing an adult trans person on stage, successful, and talking to other folks to them was hopeful.
That’s when I decided that I didn’t really have the luxury of hiding. I actually had an obligation to be out, especially for trans kids because of a very high suicide rate and the attempt suicide rate.
It’s because their worlds are usually based on their house, in their small little town or their school, and they don’t have a worldview yet. They haven’t seen a bigger world. Everything they learn comes at them through their social media or their television.
If I’m not out and other elder trans people aren’t out, they see an air gap where they think there’s nothing, that there is no life. All they see is pride, and that’s sort of a distorted Mardis Gras-type view – two different things. Being trans and pride, two different things, the day-to-day life of a trans person is very hard, and you need community.
Me being out and corporate, especially in a controversial industry, it hasn’t been good from a financing point of view. Financing is hyper conservative, which is why women have a hard time raising capital, especially over certain dollar figures. People don’t like talking about that, but there’s not many women that can raise over $20 million in a private raise in North America for cannabis. There’s a reason, but there’s a lot of guys who can.
When you take a look at trans people, that’s a micro-fraction under that. If it’s hard to get financing as a Latino male, imagine a trans black woman. The numbers drop like a rock. You walk into a room to pitch your deck, which everyone loves sight unseen because they don’t put personnel pictures on the slide decks, and then you walk into the room and you watch their faces fall. It’s really hard to do a successful pitch after that. Even though folks say it’s always on the metrics and the business, it’s not.
CFN: What else are you looking forward to as the cannabis industry in North America moves forward?
RG: I’m excited to getting into clinical trials. I’m a big fan and believer in this product. Worst-case scenario, it’s the world’s most successful placebo. It’s so effective, it should be a drug. That’s what I’m impressed about it. I want to get to the clinical trials and why I built my organization. Why? We know that it works, we believe it works. We have mountains of anecdote all over the place. You can’t step without getting anecdote all over your shoes.
I need proof because you can’t stick it on a label unless it’s got proof. Proof means science and people in coats staring into microscopes and other equipment. You can’t evade it, and the very people who forced the FDA to make drug companies go through all that work are the ones trying to evade it themselves.
I want to help people get through that hurdle. If you make a topical, and you say it actually helps people with arthritis, how about we actually do the research and so you can put that on the side of your product? Stop trying to avoid it. Embrace it and prove it. The only people who should be afraid of clinical trials are the lying assholes who are just flogging snake oil. Screw them. They shouldn’t be playing anyways.
I’m pretty blunt, and I don’t get invited to parties much, but I’m doing this because I believe in it, and I respect the medical practitioners too much to sell their patients garbage or trick them into thinking that CBD without THC means anything. It doesn’t. I might as well sell you vegetable oil.
But CBD is selling, so what the hell, let’s do it. That’s a wholly corrosive attitude. I do this because I believe it’s medicine, but I have to prove it’s medicine, and I have to use the existing system. I can’t invent a new one. I have to use the FDA. I have to use Health Canada. I have to use the E.U.
But I have to approach them the way that all the drug companies did. Here’s the cool part. Weed works. Most of the drug company s*** never did. We’re finding that in retrospective studies, but the fact that people drop their conventional medication once they start using cannabis, and self-report improvement in their condition, when that’s really all we’ve ever been judging diseases from is, “Hey, doctor, I feel sick.” “Really? What do you mean?” “Well, I feel kind of icky.” “Oh, okay. Well, stick out your tongue. Let me look at it. Well, between the color of your tongue and the thump thump of your heart, I believe you have this.”
That’s our science still. Holy crap. Now we have a chance to test this stuff. Let’s do it.
CFN: What else should our readers know about HollyWeed and about you?
RG: About the company, I have to just crow on my rooftop about my team. I’ve assembled what I feel, based on my experience on both sides of the border, is one of the best teams in cannabis. I’ve got pharmaceutical covered. I’ve got clinical trials, beds, actual product. We’ve got folks from plant science. We’ve got folks from other disciplines. I’ve been able to keep folks where they live, so we have a team in Ontario, we’ve got folks in the United States.
Although we’re not a farming company, I want folks to understand that we are firmly committed to every aspect of cannabis, and part of our job is to be on both sides of the border in whatever legal capacity we can. We won’t be owning farms in the states, but I can assure you, we will help those that do get ready for the FDA, and that’s how we protect investors’ money, even investors that aren’t investors in us. I don’t want there to be a flaming cull whenever there’s a change in regulation like happened in California three times. Investors will get very weary of that.
How about if I help their assets get up to shape in California and get ready for the coming? That’s what I want to provide accredited investors is, “Hey, I know you may not invest in me, but I know you’ve already sunk capital. You want to protect that, now, don’t you?”
I can’t repeat often enough, that if you want to sell to consumers, it behooves you as an organization to look like them. If you sell to women, you better have a really high sea level women count and a board count, otherwise, you are stealing from a community and you may not think it, but you are.
It’s the same if you sell product to the African American community in the states. You better be sourcing that from African American growers. Otherwise, you’re not really changing anything.
Equity and diversity are conscious things you have to practice so it’s not a hopey changey thing that appears magically from the sky. You have to force it down your shareholders’ throats sometimes. You have to shove it into your board’s laps at times. You have to make your staff do it at times. But you have to do it because it’s the right way to do it, and to me, it’s the most capitalist, Adam Smithy thing you can do.
*This interview has been edited for clarity.
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