Full Interview Transcript
Timestamp 0:00 Intro
Shadd Dales: Hey everyone, in my latest podcast, I sit down with one of the leading rare cannabinoid companies in the world who outlines to us the growth trajectory of this industry over the next 10 years, a multi-billion dollar industry. From health and wellness to cosmetics, CBD, and hemp companies, every household across the world is going to have a rare cannabinoid in their medicine cabinet. Why? Find out now in our latest podcast.
Shadd Dales: Hey everyone, welcome to The Dales Report. I’m happy to have here on the podcast today the vice president of sales at BayMedica, which is a subsidiary of InMed Pharmaceuticals which trades on the NASDAQ with the ticker symbol INM Jerry Griffin joins us. Jerry, good to have you on, nice to meet you. I see you’re in San Diego. We were talking off camera. Not a bad place to live huh?
Timestamp 1:48 Growth Trajectory For The Cannabis Industry Moving Forward: The Interest Coming From U.S. MSOs
Jerry Griffin: I think there’s a big disconnect between the capital markets and what’s actually going on, boots on the ground in the industry. From my perspective, from talking to customers, cannabis couldn’t be more popular. There are sales – sales are growing in most cases. We’ve seen a little bit of a slow down that’s spooking people. But nobody has to deal with the number of headwinds and obstacles that this industry has to deal with. And we’re only a breath away from massive regulation change that’s going to open things up, right? You’ve got banking regulations that could change at any moment, you’ve got the removal of something like 280E which is an IRS tax code that burdens these players, you’ve got interstate commerce that’s closed, you’ve got the state-by-state regulatory scheme. And look, where I sit as an investor, I don’t want to miss one of these things that could change on a dime and will open the whole thing up. Now, from the perspective of our business, BayMedica, that is a subsidiary of InMed – cannabinoid manufacturing, specifically rare cannabinoids, we feel strongly that the access to rare cannabinoids will blow this thing wide open because it’s going to open up all these things…
Timestamp 3:38 Cannabinoids A Major Opportunity?
Jerry Griffin: Well, if you look at the – let’s start with the health and wellness space, last year was a one and a half trillion dollar sector, right? And recently, 91% of cannabis consumers say they use cannabis for health and wellness purposes. And if you really peel the onion back on that, you’re talking about two cannabinoids really being leveraged for these health and wellness outcomes these users are seeking. You’ve got 140 other cannabinoids that have really tremendous potential. And we’ve selected some of those cannabinoids, THCV – delta-9 THCV specifically, CBC, CBT, CBDV, that we believe have massive, mass market potential, and we feel that it’s going to give these cannabis companies, hemp companies, and anybody playing in the hemp, cannabinoid health and wellness space a lot more optionality around potential products and just blow this thing wide open. So that’s what I’m seeing – this untapped potential within the health and wellness space that cannabis is kind of scratching the surface and may have the ability to really get more involved and blow this thing wide open.
Shadd Dales: Where do you see… Do you think Multi-State Operators – some of the bigger companies in the space… some of them already have, but do think as it continues to expand, and they get more involved in the industry in the coming years.
Jerry Griffin: In the industry? You mean get more involved in health and wellness? Or get more involved in rare cannabinoids.
Shadd Dales: Rare cannabinoids
Jerry Griffin: Yeah, we talk to a lot of MSOs. We talk to a lot of large single-state operators. A lot of them are looking at rare cannabinoids simply to make their existing products better. I’ll give you an example: there’s a company called Wyld. It’s probably one of the largest cannabis-based gummy products in the country. They added CBG – that’s not a cannabinoid that we make because it’s not really a minor cannabinoid – there’s a lot of it available in the market. But, what’s it’s done – it’s modulated their product to prevent this anxiety people feel sometimes when they take THC products. So if you can imagine how that changes the dynamic from a new user adoption perspective. There’s a lot of people that don’t want to touch these products for a number of reasons. But a lot of it is the experience. It doesn’t really jive with them – but then here you come, modulating that effect with CBG and eliminating that anxiety that a lot of people feel – boom – you’ve accessed a lot more potential users. GTI, CannaCaft, which is a very large California single-state operator, Wanna, a big multi-state operator, Cronos – all of these guys are taking rare cannabinoids and putting them into their products to change the effects to create a functional product to define a specific experience. And they’re all based on rare cannabinoids, and a lot of them involve delta-9 THCV. And oh, by the way, just to call it out, Cronos is doing this with cannabinoids derived from biosynthesi,s which is what BayMedica does.
Timestamp 6:36: Big Pharma And CPG Companies Will Eventually Enter This Space As Well
Jerry Griffin: Yeah, of course. Big pharma, big CPG, the multi-nationals – absolutely. Right now, what’s really preventing them from getting involved is regulatory clarity. And supply chain. Just to touch on the supply chain for a minute. These guys need access to high-purity, consistent, repeatable ingredients that can be developed and can always be accessible. Right now that doesn’t exist in the cannabinoid space. You’ve got certainly a lot of access to CBD and THC, but when you look at rare cannabinoids they’re represented in maybe one percent, sub-one percent of the entire plant biomass. And when you think about cultivating that and then extracting that. That very little amount of product you get from that massive amount of biomass – that’s a very small represented molecule. And then you look at it – oh I could do this with fermentation (biosynthesis) at a massive scale. I can do that within a week or two. I can do it in one step. I can do it in a way that gives me the same product over and over. Now, you really start seeing these guys step off the sidelines and get involved. So, the supply chain has been solved on the rare cannabinoids front. The regulatory challenges are also something that needs to be given consideration. CBD currently has a drug filing: Epidiolex, GW Pharmaceutical. It’s a CBD-based pharmaceutical. That product, by the FDA’s standard, can never go in food and beverage. So it’s going to require congressional legislation to change that. So it’s always going to have that burden. Now you start looking around at other cannabinoids that are not scheduled drugs like THC is. They don’t have that problem. So now you’ve solved for supply chain, and you’ve created a product – there are products available that can be put into food and beverage, nutraceuticals, and the rest. There are a few things that need to be stepped through by BayMedica and also by the operators, which is making sure the ingredients are safe, that the toxicology is done, that the efficacy studies are done, that the stability studies are done, and also that they either step through what’s called the Generally Recognized as Safe designation or the New Dietary Ingredient designation. And that’s something that BayMedica has every intention of doing to enable both the brands and the operators to use these also to satisfy the FDA compliance.
Shadd Dales: How long have you been with BayMedica for?
Jerry Griffin: I joined BayMedica in February of this year.
Timestamp 9:47: How Long Have Jerry Griffin Been With BayMedica, Acquired Last October
Jerry Griffin: I’ve been in and around biosynthesis and I’ve been in and around biosynthesis of cannabinoids since early 2020. When I was presented with the opportunity to look elsewhere and potentially join BayMedica, many things caught my attention. And first and foremost, let me preface this with – InMed is an FDA drug development company. They have two CBN-based drugs that they are currently taking through the FDA drug development process. BayMedica was acquired by them, and BayMedica is a manufacturer of cannabinoids through what some people call biosynthesis. I call it fermentation. Others call it cellular agriculture or precision fermentation is another term. But what really attracted me is, first of all, technology. Whatever you want to call it. I call it fermentation. In our case, we’re fermenting cannabinoids. And in my experience going back to 2020, and also being on the plant side of this and also being on the biosynth side of this, it’s just a much better option for accessing rare cannabinoids. And it’s the only way to really satisfy the mass market potential for some of these rare cannabinoids that are very powerful. So let’s start there. We’re taking cells, and we’re turning them into factories. So that’s super cool. And that also satisfies me intellectually. To the untrained eye, this new tech may concern brands may concern consumers, but there’s a lot of examples of biosynth-derived products on the market today. And I can go through a few of them. Insulin used to be procured from pigs. Very inhumane. They’ve now found a way to do that with biosynthesis. And all the insulin on the market today is derived from biosynthesis. Hyaluronic acid, a very well-known personal care ingredient, used to be procured from rooster combs. Imagine how inhumane that is. Now, it’s all derived through biosynthesis. Citric acid – a lot of people think this stuff comes from citrus. It doesn’t. It’s biosynthesized. Vanilla, maybe two thousand metric tons of vanilla on the market, is produced through plants, and the other 30 thousand metric tons are produced through biosynthesis. Stevia. Nylons. Lulu Lemon just did a tie-up with a biosynth company to produce petrol-based nylons, and obviously, since they are petrol-based they are very unsustainable and environmentally unfriendly. Unilever, palm oil. They just did a tie-up with a biosynth company around palm oil. Again, very unsustainable. Again, you’ve got biosynth being used to solve these problems, whether it be a sustainability issue, an environmental issue, as you’re impacting the indigenous community by extracting this from their environment.
Shadd Dales: Which is so important right now.
Jerry Griffin: Totally. And in our case, you’re solving a supply chain issue whereby you can’t access these powerful cannabinoids that are not very well represented in the plant in any meaningful amounts that would enable the common user to access them. What that all leads to is this company with this tech that provides this very clear benefit and provides this access. So all of those things are kind of a great starting point. And when you look at their position in the market, BayMedica is a very unique cannabinoid company. They are a subsidiary of an FDA drug development company that is doing R&D on cannabinoids. They are also producing cannabinoids through this really really cutting edge technology, but it’s also very pervasive at the same time. And then look, on a personal level, this provides me with a pretty rare opportunity to combine my twenty years of experience in sales and marketing with a class of compounds that I find fascinating. Then also factor in this shift in health and wellness with natural therapies that I think are incredibly important. On all of those levels, it’s how I look at this opportunity and there’s nobody out there. They’ve always been the guys to beat since I joined this space back in 2020. They continue to create separation. Some guys have gone kind of dark. Some guys have produced one product and they are not doing it in any meaningful amount or it’s a product that the market doesn’t really want. And here we come with two, three, four products that we’ve launched just this year. And I think we’re just going to get to escape velocity and everybody’s just going to be far, far behind us in the rear view.
Timestamp 15:00: What Particular Market Draws The Most Interest In (CBD Hemp/Cosmetic/Nutraceutical Companies)
Jerry Griffin: Look, I think it’s the latter. I’m really excited about them all because I think, in the future, cannabinoids are in every medicine cabinet. I think that they’re in every pantry and in every purse. Health and wellness obviously intrigues me. It’s a massive current opportunity, in the trillions of dollars, presently. And look, our body has a system that has evolved to work with this class of compounds and we make those as a company. And we have the ability to support this mass market scale. Traditional food and beverage, including nutraceuticals, really excites me. Also both from a near term commercial opportunity perspective but we do need to step through some things as a company to make sure we’re compliant with the FDA and the operators and buyer agreements are compliant with the FDA. We will be stepping through these things really on behalf of the industry. So we’ll be chasing those things that I mentioned earlier. Like Generally Recognized Safe (GRAS) or NDI. Some of the toxicology testing that will enable these folks in food and beverage, nutraceuticals and the rest – to put our ingredients into their products compliantly. Now so longer term, what really, really gets me excited is this advent of personal medicine… or personalized medicine. There’s a massive amount of people it will help. It has trillions of dollars in potential as we see with health and wellness which is already a trillion plus dollar industry. And then I think in the future there’s going to be diagnostic tools that will evaluate this system that exists within everybody’s bodies, the endocannabinoid system, and basically tell you, “You’re difficient in this. This is the outcome of not taking care of that situation. You need to supplement with XYZ cannabinoid in order to create the homeostasis that doesn’t present these horrible disease states that people experience today.
Timestamp 17:11: The Difference Between THC-V And THC
Jerry Griffin: The difference between THCV and THC is a couple of carbon atoms.
Shadd Dales: And what’s that mean?
Jerry Griffin: When you look at molecular structure of THCV versus THC, they both have this tail off the back of them – and looks like a cat. It’s got a tail off the back. THC’s tail, I believe, is a bit longer than THCV’s tail by two carbon atoms. So it’s a five carbon side chain versus three carbon side chain. So that’s what it looks like from a molecular level. What’s really interesting about cannabinoids is that those subtle differences make a massive difference in how – in the bioactivity – in the physiological fact. THC is a scheduled drug because it’s very much intoxicating. THCV is not intoxicating. And they have completely different use cases when you look at them from a health and wellness perspective. If you just take out the recreational side of it and you look at them on the basis of the primary research that’s been done on use cases, THCV does things that are totally different. And so we are focused on non-intoxicating cannabinoids. THCV is a very powerful non-intoxicating cannabinoid. It has a lot of mass market potential and so that’s the difference between those two molecules.
Shadd Dales: Who knows where we’ll be in twenty years from now. But it’s just staggering the amount of research and breakthroughs that we are continuing to make on all levels. So it’s encouraging to say the least. One of the things outlined in your press release – the difference between delta-9 and delta-8 THCV. I’m wanting to understand what that means. And as well, are there commercial advantages for D9 versus D8 THCV?
Jerry Griffin: Sure, much like D8 THC versus THCV example. The difference between D8 and D9 THCV is a very simple molecular structure difference. It’s one double bond, they are basically inverted. On D8 it’s over here and on D9 it’s over here. To my point earlier, those subtle changes make all the difference when it comes to cannabinoids. We are biosynthesizing, and what we’re creating is the real macoy. D9 is what the plant produces – it’s not D8. D9 is the type of THCV that has been studied and all the value credited to THCV is the D9 “flavor”. And so unfortunately there’s a lot of D8 on the market today because it’s a lot easier to synthesize and its being all marketed as THCV but that’s an education issue that we need to solve for. All the stuff that’s THCV that has been studied is all the D9 version. All of the use cases and all the things that I mentioned earlier, primary research indicating how it helps with epilepsy, how it helps with diabetes, how it helps with memory disorders, physical energy, and what have you. All of that is related to the D9 THCV. And oh by the way, it’s probably worth mentioning, that we’re in the process of putting together a human trial. We hope to launch it within the next month and we should have the data back from it in the fall. That effectively, at least directionally proves out some of the reputational use cases. We don’t want to sit here and say we’re taking through an FDA process and clinical trial. But this is a human trial with a large number of people directly meant to discern whether there is a physical energy use case, there is an appetite suppression use case, there is a some of these other use cases as primary research suggests is in play.
Timestamp 21:06 Scratching At The Surface With The Overall Growth Of This Industry
Jerry Griffin: I would say so. Right now, we’re just catching the bubbles off the surface. You can use whatever sports analogy you want to use – you’ve heard them all. “It’s early innings.” “We’re still scrimmaging.”
Shadd Dales: We all know that we’ve come a long way from the early days of CBD. Because I think that’s what obviously put a black eye on the industry for a while but the way obviously the FDA has cleaned this up and the research that is being provided, in due time, things get more sophisticated and it’s a lot different from the way it was three, four years ago even.
Jerry Griffin: Absolutely. A lot of research has been done. A lot more is understood about these cannabinoids and how they act on their own, how they act with other cannabinoids. We are at the forefront of all of that. And we are working to contribute to that science, continue to demystify all of this. Put CBD in the place with all the other cannabinoids. It’s just a cannabinoid and it has its own use case and oh, by the way, there’s all these other ones that are just as powerful if not more powerful and effectively provide information to the public that allows them to decide what they need.
Shadd Dales: InMed Pharmaceuticals trades under the NASDAQ ticker symbol INM. Jerry Griffin, VP of Sales at BayMedica, a subsidiary of the company. I appreciate the time.
Jerry Griffin: Thanks so much Shadd.
Shadd Dales: Alright. Thanks Jerry, let’s keep in touch.