EXCLUSIVE: Interview with Greg Engel, CEO of Organigram

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Organigram Holdings Inc. has appointed a medical marijuana, pharmaceutical, and biotechnology industry veteran as its new chief executive officer, Greg Engel. 420 Intel got a chance to sit down and talk to him in an exclusive interview.

Thank you for taking the time for this interview Greg. So you’re a month in as CEO of Organigram, how’s it going so far?

I’m having a lot of fun. It’s been great – coming from the Canadian cannabis industry is a big advantage. Plus I’ve already worked with Organigram on a number of initiatives together before this position.

What were you doing before entering the cannabis industry?

I’ve been in the health care and biotech industry my entire adult life and I’ve been building companies, often from the ground up. One company out of Bermuda, and three biotech and pharma companies in Canada. The last 20 years of my career have been spent building companies toward commercial success and profitability. I’m interested in not only building the company but also building a corporate culture. I also have 18 months at another licensed cannabis producer in Canada and led the first cannabis export to Europe, charting out the export path by dealing with both European and Canadian regulatory bodies.

What drew you to the cannabis industry and ultimately led you to this new position at Organigram?

There are actually two main elements that drew me into this industry. From a personal perspective, my sister-in-law passed away from cancer. Before her struggle I never thought she could be a cannabis user but I got to see firsthand how it impacted her life. It gave me insight into the space and cannabis use in general. The other driving factor was that it’s a new and nascent industry – I wanted to play a key role in shaping the industry.

Now about how I ended up at Organigram: before joining I had some insights about the organization and they were one of the key companies I was familiar with. I’ve always been impressed with the people, and the fact that they have a strong cash balance sheet means they are poised to take advantage of key expansion opportunities.

What sets Organigram apart from its competitors?

Organigram has a unique advantage in New Brunswick as a low cost producer due to energy rates (5.1 cents per kilowatt hour). In cannabis production, power is a major portion of the cost driver from a lighting and environmental controls standpoint. Additionally, the partnership with TGS International out of Colorado is a fundamental key element to be an innovator in this space due to our agreement with them, which allows us access to their technology as well as their brands.

The two other key pillars: the organization has a commitment to quality and is a company that has been through a voluntary product recall. This is an opportunity for us to increase quality, not only meeting criteria from a testing perspective, but making sure standards are in place to consistently create a higher quality product than ever before.

Lastly, a positive cash balance sheet gives us the ability to focus on production and what we are building towards, and gives us the capital to fund that expansion.

With recreational legalization around the corner, how do you see the company evolving to service this new market?

This really depends on what the new regulations allow for, and what decisions the federal government makes. We’ve already heard that the government will allow for different models in each province. Because of our partnership with TGS, we’re uniquely positioned because of the retail experience they have, if retail locations are part of what that looks like in certain provinces. Whatever the structure ends up being, we have the insight of retail marketing along with the current mail order system. Another way Organigram will service this new market is with our Trailer Park Boys product line which is under development.

Did you ever think you’d be talking about Trailer Park Boys in a business interview?

Haha, definitely not – but I think it’s great.

On the topic of the mail order system, how would that change as compared to how it works currently with medical cannabis?

Our current mail order service is an extremely well-oiled machine that works well on the medical side. If this is deployed for adult recreational use, there has to be a new set of checks of balances that we’re cognisant of. Because there may be different distribution models in each province, mail order could play a valuable role in remote locations, especially when the program starts, and for individuals who don’t have convenient access to retail locations. There could even be a national mail order system if regulations allow for it – in any case we will work within the provincial and federal framework once it’s built out.

What new considerations will need to be made by all licensed producers when legal marijuana for recreational purposes is widely available?

There is a push from the LPs to eliminate sales tax on the medical side. I am remaining optimistic that this will happen – it’s important because removing medical marijuana tax helps to support and promote cannabis as an accepted medicinal treatment in Canada. From a recreational space, one of the key considerations is an education and awareness component that needs to grow. As the industry elevates discussions and the stigma is removed, there’s a unique opportunity to educate people in many areas including the advantages of the different forms of marijuana – duration of effect and other differences between strains. One comparison I draw from my pharmaceutical background is that antidepressants can be sedating or activating depending on the type used. Cannabis strains have these same properties: indicas are mellowing while sativas have an energizing effect. We’ll also see a lot of talk about the delivery form – promoting vaporization rather than smoking.

Can you tell me about Organigram’s expansion project? When is it slated for completion?

We are planning a production increase from just over 6,000 kg to 16,000 kg in 2017 with our expanded production facility that is underway. And we’re ramping up to 26,000 kg by the end of 2018.

At the foundation of this expansion is our partnership with TGS. We have an exclusive product development and distribution agreement with them and they are providing consulting services on our state-of-the-art extract and oil facility. A portion of our agreement also allows us to capitalize on their brand names such as NectarBee. They’re a phenomenal group to work with. In anticipation of recreational legalization, they have over 240 SKUs of cannabis products available, many of which we will have the ability to quickly roll out.

Can you name some business leaders that have inspired you, and what qualities make for exceptional leadership?

One leader I greatly admire is Elon Musk. Lots of people only focus what he’s doing today with Tesla and SpaceX – to me we forget he’s a South African-born Canadian-American who spent a few years at Queens University here in Canada. He’s an innovator who is looking leap years ahead of anyone else – actually creating industries, and one of the founding members of the company that ultimately became PayPal. From him we learn it’s not just about staying ahead of competition, it’s looking to the future, and I’m amazed by the innovation.

Secondly I look to Clive Beddoe, the founder of WestJet. The key for me in any organization is what kind of culture do you want to have? Clive created a culture that permeates across the entire company. The employees happily refer to themselves as ‘WestJetters’, and they feel connected to the organization and its values. For Organigram, our values align with the concept of “Canada’s Safest Cannabis” – this is our internal mantra, to provide the highest quality and safest cannabis in Canada.

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