The challenge of generating demand for medical marijuana

THERE ARE FIVE MILLION POSSIBLE CONSUMERS IN COLOMBIA

3 December, 2017 - 9:00 PM

Camilo Vega / @camilovega0092

Whether cannabis consumption takes off depends on educational campaigns that companies like Khiron are doing with doctors, which show the benefits of cannabis.

It has been more than seven months since the medicinal cannabis decree was approved and the myth that the plant can be legally smoked still exists. In fact, the Colombian regulation stipulates that the production license (one of the four types of licenses allowed) is only valid to produce oils, resins, tinctures, extracts or preparations obtained from marijuana.

This is so that companies that enter this business do not compete against illegal dealers, who sell them to people who tend to smoke marijuana. In fact, their competition is artisanal producers; businesses that have been processing the plant informally for decades to produce oils and cannabis-based ointments. They are common in flea markets or in natural product stands.

In addition, the niche market of these companies is focused on diseases for which there is scientific evidence of the benefits of medical marijuana treatment. These conditions include chronic pain, sleep disorders and epilepsy. There’s even studies that approve its use to treat cancer patients, since there is compelling evidence that oral cannabinoids are an effective antiemetic treatment of nausea and vomiting induced by chemotherapy, for example.

Demystifying medical marijuana is precisely what companies that have managed to obtain one of these licenses look for. To understand this business model, El Espectador spoke with Colombian-Canadian company Khiron (founded by Colombians with Canadian capital), who have managed to obtain a license to cultivate, produce and distribute the plant for medical purposes in Colombia. It is one of the pioneering companies in this business, which not only faces the challenge of creating a unique and sustainable model within the market, but must foster the demand for the product practically from scratch.

"We conducted a survey of more than 200 doctors in which we asked them if they were willing to prescribe medical marijuana, where 1 represented that they would not do so for any reason and 5 that they would. The average score was 3.8. Therefore, there is a willingness of doctors to consider this alternative but only if they find a serious company with high standards. In addition, they want to see medical studies that validate the benefits of cannabis. This is what we are doing, showing them that we are a rigorous company, with standards that surpass those required by law, so that the world understands that cannabis is an option to treat diseases", says Andrés Galofre, vice president of Khiron.

Working with the medical community is essential for companies that entered the medical marijuana business, because legally they are prohibited from advertising. Therefore, there would only be two ways in which the demand for this product could be generated; that the doctor prescribes it or that the patient asks the doctor to study the possibility of prescribing it to treat their disease.

However, opening the minds of the medical community is not enough to generate demand, there also needs to be education. What dose should be prescribed? How often? So, each of the companies that plan to distribute medicinal marijuana must have a highly qualified technical team to conduct research on how the product should be prescribed. And then an educational campaign must be done so that doctors are trained in prescribing this product.

Khiron boasts two experts on the subject within their corporate structure: Sidney Himmel, a Canadian chemical and financial expert with over 30 years’ experience in capital markets, and Dr. Danial Schecter, a Canadian physician and founder of Cannabinoid Medical Clinic, the first Center for Excellence in Ontario (Canada), with 22 clinics providing care to more than 22,000 patients under the Marijuana for Medical Purposes (MPM) regulation. In addition, the company reached an agreement with the Colombian Association of Neurology to work on several fronts jointly during 2018, among them the awareness of medicinal cannabis.

The other major factor in this emerging industry will be the price, vital in any market. Regarding this, Galofre asserts that "marijuana oil sold in some informal establishments is the product that we should be comparing ourselves with. We are confident that we can sell a much better product at a better price. At street fairs, oils of 30 milliliters of cannabis are obtained at $120,000, a high price for that amount. That is why we believe that we can exploit the Colombian market, of more than five million people. In Latin America, more than 68 million would benefit."

Khiron is still structuring its production system and developing products but they expect that by the third quarter of 2018 they will already have their first consumer. Meanwhile, their gamble, and that of the industry, is to continue working to build the demand of this market. A goal that will only be achieved through educational campaigns, alliances with medical institutions, and a lot of work to demystify the use of medical marijuana.