Seeking Alpha

Shifting Focus From Cannabis To Other Cannabinoids With Ronan Levy, Trait Biosciences

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Includes: ACB, ACT, CGC, CNBS, HMLSF, MJ, THCX, TOKE, YOLO
by: The Cannabis Investing Podcast
Summary

Ronan Levy is Chief Strategy Officer at Trait Biosciences, a cannabis biotech firm. Prior to joining Trait, Ronan served as Senior Vice President of Business and Corporate Affairs at Aurora Cannabis.

He joins the show today to discuss the extreme growth the sector has seen and why big companies should be focused on market share over profitability.

We also cover the commoditization of cannabis production, focusing on minor cannabinoids and why increasing yields and lowering costs are low hanging fruits.

Listen on the go! Subscribe to The Cannabis Investing Podcast on Apple Podcasts, Google Podcasts, Spotify, and Stitcher.

By Rena Sherbill

Today, I am happy to be joined by Ronan Levy, Chief Strategy Officer at Trait Biosciences, a cannabis biotech firm. Prior to joining Trait, Ronan served as Senior Vice President of Business and Corporate Affairs at Aurora Cannabis, which he joined after Aurora acquired CanvasRx in 2016, a company Ronan co-founded. He is also co-founder of Grassfed Ventures, a private equity and advisory firm focused on the cannabis and biotech industries. Ronan also serves on the Board of Directors for Province Brands.

Topics include:

  • 4:35 - Ronan's path to cannabis industry started in late 2013 when he, along with other entrepreneurs, sought to fill in information gaps once Canada was starting to legalize medical cannabis - this was CanvasRx. As it started to grow, realized the big roadblock was access to medical professionals willing to prescribe cannabis - from that emerged Canadian Cannabis Clinics - the largest cannabis specialized medical clinics in the world. This really opened up the Canadian market. CanvasRx was acquired by Aurora (NYSE:ACB) in 2016; spent two years building Aurora and growing it from small Canadian listed company to the company it is today.
  • 6:48 - Bruce Linton leaving Canopy Growth (NYSE:CGC) was surprising given the extreme growth in the sector and his hand in that growth. Linton was unabashed in saying CGC wasn't planning on being profitable for some time - this is the right strategy. More big companies should be focused on locking up market share rather than profitability at this point. Scale though is starting to drive transitions from growth to more operational and profit focus. To grow cannabis at a large scale and developing brands in this regulatory environment is challenging, but still exciting.
  • 9:00 - When Ronan left Aurora over a year ago, the thesis was that cannabis production would be commoditized and cannabis wouldn't be the object of interest for much longer - the focus would shift to other cannabinoids. Trait Biosciences (which he discovered through Aurora) has one of the best scientific teams led by Dr. Sayre, formerly one of the senior scientists at Los Alamos Labs. Work touched on low hanging fruits - increasing yields and bringing costs down for production of cannabinoids and tackling the challenge of introducing cannabinoids into beverages.
  • 11:20 - Regulatory environment - recent FDA clamping down on companies; where is the CBD market heading? Enforcements by FDA is reestablishing the pecking order of the industry - for so long the industry operated with a freedom that the FDA is looking to change. Things will smooth out pretty soon. Market for CBD will outpace THC market because of the therapeutic angle. Reflects changing nature of healthcare through preventative, natural measures.
  • 14:25 - In June, Trait established the first stable transformation of the hemp plant; developed hemp gene that is capable of producing 4x the amount of CBD than conventional hemp plants and an increase in the number of trichomes on the leaves of the plant. Trait's amplified technology is a series of strategies that increases yields and brings down cost. Working on developing technology that doubles the photosynthetic efficiency of plants - same results for half as much light. Patent portfolio is robust - filings are around a new patent a month, have filed for 50 patents thus far. First patent was just approved - given Trait's only been around 2 years it's a testament to the novelty and execution of the technology. Focus currently is getting Trait's technology ready for commercialization.
  • 22:25 - Technology will help advance the dialogue of changing doctors' minds around prescribing cannabis as medicine. Medical community will be more receptive once the method of taking cannabis moves away from smoking and vaping and taking out the risk (the bioavailability of cannabinoids in a fat soluble format is unpredictable) of over dosing on edibles or extracts. Evidence supports that water soluble cannabinoids will be metabilized and bioavailable much earlier and more predictably than fat soluble cannabinoids. This helps make ingestable medicine more predictable and likely to be prescribed. Also working on technology to create and develop minor cannabinoids - THC and CBD are major cannabinoids, but there's over 100 minor ones. New therapies and products will be developed around this.