The Silicon Review
“We’re developing relationships that will piggyback our technology and brands onto existing global distribution networks.”
Medicinal cannabis, or medicinal marijuana, is a therapy that has garnered much attention in recent years. Its use and acceptance continues to evolve, as shown by the growing number of states now permitting use for specific medical indications.
This is changing lives: You can’t prescribe someone an expensive cocktail of drugs and treatments if they’re able to successfully treat their symptoms or conditions with the application of medical marijuana.
HEXO Corp is one of the lowest cost producers of easy-to-use and easy-to-understand products to serve the Canadian medical and adult-use cannabis markets.
The company’s brands include Hydropothecary, an award-winning medical cannabis brand and HEXO, for the adult-use market.
HEXO Corp. was incorporated in 2013 and is headquartered in Gatineau, Canada.
Sebastien St-Louis & Adam Miron, HEXO Corp CEO & CBO respectively, spoke exclusively to The Silicon Review. Below is an excerpt.
You are leaders in the Canadian cannabis industry. How did you get into this space?
We both had business experience and were looking to start a business project together in 2013. We didn’t know anything about marijuana, or at least, not much. It was a new world for everyone. But we knew that, as entrepreneurs, we’d be able to create a business plan and carry it out.
You’ve kept your medical brand, Hydropothecary, but have now created an adult-use brand, HEXO. Why is that?
Cannabis is a brand business. We’re not about commodity farming. As Hydropothecary, we focused on the high-end market. HEXO is designed to appeal to those we term as ‘explorers’, educated professional people, looking for smoke-free ways to consume cannabis, whether that’s sublingual sprays, beverages, edibles or cosmetics. We’re focused on developing products that offer very specific experiences and are dose-controlled, shelf-stable and delivered to the adult-use market through non-prescription channels.
Demand is expected to be significant. What is your strategy?
When our greenhouse expansions are complete at the end of 2018, our annual harvest will be total 108 tonnes. Next year, we’ll have 12 to 15 per cent market share in Canada, and the only way to meet that demand was to become a very efficient supplier. Cannabis crops will eventually be commoditized, relieving supply constraints. Until then, we will continue to work on supply efficiencies. Beyond this, we intend to be solid, reliable partners to our customers, whether they are crown or private retailers.
What about the international market?
We’ve just announced an agreement with QNBS, a Greek company, for the development of 350,000 sq. ft. of licensed infrastructure that will be used for manufacturing, processing and distribution of medical cannabis products, destined for the European market. By bringing our infrastructure and know-how to this partnership, we will be prepared to serve a burgeoning European market. We are also ready for the US, Brazilian and Mexican markets.
How are you anticipating growth?
Five to 10 years out, you’re going to see three to five $100-billion companies controlling 80 per cent of the market. Our intention is to be one of them. We’re developing relationships that will piggyback our technology and brands onto existing global distribution networks. Our strategy has been to partner with Fortune 500 companies using multiple hub-and-spoke joint ventures with leading companies in cosmetics, food and vapes. For example, we recently announced a joint venture with Molson Coors Canada to develop non-alcoholic, cannabis-infused beverages for the Canadian market. We’re not only developing valuable brands but creating natural potential buyers for HEXO.
In 2018, you uplisted on the Toronto Stock Exchange from the TSX Venture Exchange. What’s the next step?
HEXO Corp is currently completing its Sarbanes–Oxley compliance to be listed on the NYSE. That’s part of our journey to becoming a Fortune 500 company. But our fundamentals are the most important ingredient. In Canada, we’re in the top five by market cap and the top four in production and are projected to be in the top three in sales contracts by next year. We’re out-executing expectations no matter which metric you want to use, and that story will only accelerate as we become an international player.
If you had to list one factor critical to your success, what would it be?
Our people! We’ve always said that the key to success is to surround yourself with people smarter than yourself in their areas, and you see that in our leadership team. We are also one of few publicly-listed cannabis companies with a woman on our board. We have key women in non-traditional roles, as well.
How do you bring the best out of employees?
We learned the hard way that you have to enable your managers, directors and executives to make decisions and let them follow through. In the early days, when we were a small team, we meddled more than we should have. Now, we let our leaders do their jobs. The other key lesson was that your head of HR should be your sixth hire, not your 40th.
Leadership | HEXO Corp.
Sebastien St-Louis, CEO: Sébastien St. Louis is an entrepreneur with strong leadership abilities, financial acumen and operational expertise. Sébastien has wide-ranging business experience in manufacturing, distribution, trade finance and commercial lending. He has advised Canadian business owners and CEOs across multiple industry sectors while structuring and closing $200 million in financing to support their export and growth initiatives.
Sébastien co-founded HEXO Corp. with one goal in mind: to create a world-class company based on the highest standards of product quality and safety. Since 2013, he has secured more than $260 million dollars in financing for the company. His leadership has been instrumental in navigating the company through regulatory, financing and start-up challenges on route to becoming the only significant licensed cannabis producer in Quebec.
Sébastien holds an MBA in Finance from the Université du Québec à Montréal and completed his Bachelor of Arts (Economics) from the University of Ottawa in 18 months.
Adam Miron, Chief Brand Officer: Adam Miron is an entrepreneur who has launched several successful businesses at the intersection of media, brand development, and public engagement. Adam’s past ventures include iPolitics, Canada’s premier online political news site, which was then sold to the Toronto Star.
Adam has been dedicated to public service throughout his adult life and has contributed to political campaigns at all levels of government. Among notable roles, he is a past National Director for Federal Commissions of the Liberal Party of Canada.
Adam turned his entrepreneurial talents to the medical cannabis industry and co-founded HEXO Corp in 2013. Under his leadership as CBO, HEXO Corp has emerged as one of Canada’s most innovative medical cannabis producers. Adam’s creativity continues to guide the development of the company’s industry-leading product line, including its award-winning Decarb edible cannabis powder and Elixir sublingual peppermint oil cannabis spray, which won first and third place respectively in the Best New Cannabis Product category at the 2017 Canadian Cannabis Awards.