Pot luck: Indo-Canadian’s startup bets big on marijuana

Sometimes it can be a positive if your business goes to pot. That, at least, is the case with the startup TerrAscend Corp, which is making a serious play in the burgeoning field of medical marijuana in Canada and looking ahead to legalisation of the recreational variety this summer.

While TerrAscend’s medical products will arrive in the Canadian market in 2018, estimated to reach $2 billion, its 42-year-old co-founder and chief strategy officer Vijay Sappani believes opportunities also lie in India.

“India has probably the most amount of wealth of knowledge on cannabis, it has some of the best native strains of cannabis,” he told Hindustan times during an interview at TerrAscend’s sprawling facility in Mississauga, a suburb of Toronto.

For now, the company is looking at research and development partnerships with leading institutions in India, as well as a firm in the commercial hemp space, though Sappani did not name them due to confidentiality reasons.

“We’re looking to partner, collaborate with institutions in India to do research and development but also using local knowledge towards unique strain development. One of the top selling strains in Amsterdam is malana cream and that’s from Himachal Pradesh,” he said.

Marijuana import and export remains banned in India. The country though has a long tradition in marijuana use, for religious, cultural and medicinal purposes.

Vijay Sappani, co-founder of the cannabis startup TerrAscend Corp, in the flowering room at the company’s facility in Mississauga, a suburb of Toronto. Clones from mother plants are transplanted in this room and flower here. (HT Photo)

As a leader in the pharmaceutical sector, Sappani feels this gives India another advantage, especially with regard to the medical marijuana industry that has gone mainstream in North America and Europe.

But while laws and rules in India still make that a proposition for the future, the present is in Canada, where medical marijuana use is growing and the market is expected to explode to $10 billion once recreational use is permitted from July 1.

“We have been in the healthcare space and we have seen some of the opportunities and challenges. The number one reason medical cannabis is moving really is patients like it,” said Sappani, who was born in Chennai and worked as a pharmacist in Canada.

“Lot of these patients have been on painkillers, they’ve seen the side-effects, there are lot of addiction issues.”

Gopal Bhatnagar, a cardiac surgeon and director on TerrAscend’s board, said medical cannabis is used in management of chronic pain, oncology-induced nausea, and even for post-traumatic stress disorder.

But there hasn’t been adequate research into its potential, as he said: “The science is certainly evolving. Now the social stigma has been taken away in North America, real scientific research can be done.”

The strains used in medical products make for a different experience than smoking a reefer, as Bhatnagar explained, “Medical marijuana strains are specifically cultivated to give the prescribed effect. So we have strains that will help you with your nausea and give you very little, if any, high. We don’t get the hallucinogenic effect.”

Vijay Sappani, co-founder of the cannabis startup TerrAscend Corp, in the mother room at the company’s facility in Mississauga, a suburb of Toronto. (HT Photo)

TerrAscend’s 67,000- square foot facility started cultivation of its crop late last year and the process involves a dedicated sterile environment. The intent is to grow about 10,000 kg by the end of 2018.

It also has a level 10 vault, among the highest in terms of security in the industry, to store the marijuana with a street value of about $150 million.

The startup has already secured funding worth more than $50 million from New York-based JW Asset Management and investment from Canopy Growth Corp, the leader in the sector in Canada.

This in many ways is a growing business proposition that TerrAscend’s ventured into, as Sappani said, “We have started growing cannabis. We have already completed two crop cycles and packed them ready for sale. Our next crop cycle has started and is growing.”

The focus is on pharma-grade quality and standarisation of its products, which isn’t just the weed or dry flower casual users associate cannabis with, but also creams, lotions and oils.

The foray into the recreational market is expected to be multiple times the size of the medical side, as Sappani said, “The basic ingredients will be the same. We are a cannabis company. We will evaluate the opportunity as it evolves. Our focus is on producing high-quality cannabis products and supplying them.”

With major capital infusion, there will be plenty to stir this pot in 2018, the year cannabis will go legal and mainstream like alcohol or tobacco across Canada.