HIGHLIGHTS
- CannTrust IPO on NYSE expected in first half of 2019
- Cannabis supplies seen tight for more than 12 months
- CannTrust will sell edibles when legalized in Canada
Canada’s newly legalized recreational cannabis industry has attracted many entrepreneurs to the business world, but when CannTrust Holdings Inc. hired its new CEO, the Ontario-based licensed producer opted for an experienced business leader. Peter Aceto took the helm in October after working as the CEO for Tangerine (formerlly ING Direct) from 2008 to 2017.
Below is a Q&A with Peter Aceto, chief executive of CannTrust:
Cannabis Professional: CannTrust Holdings Inc trades on the Toronto Stock Exchange. When and why does the company plan to be listed on the New York Stock Exchange?
Peter Aceto: It’s definitely going to happen in the first half of 2019. Our intelligence tells us that global institutional investors are very interested in entering the States. A lot of them have restrictions. Being on the NYSE gives us access to the largest and most global institutional investors in the world who absolutely want to be a part of the (cannabis) space. The types of investors who have a long-term view, that’s our primary motivation, and we’re going to continue to be on the TSX as well.
Cannabis Professional: How are your cannabis supplies?
Mr. Aceto: We’re working every day to increase our supply but we are not meeting that demand as we had hoped. We’re prioritizing the medical side. We are anticipating new rules and regulations around the edible market. My view is that will further increase demand and, no matter what we do to increase our production, that demand will continue to outstrip supply for a little while. I think it’s going to be over 12 months, primarily because the expected new legislation which will allow cannabis to be sold in more forms, which I think will increase demand. I think the sooner we get away from inhaling cannabis, the better, and there are other healthier ways to ingest it and that will increase demand.
Cannabis Professional: What is your forecast for CBD demand over the next five years?
Mr. Aceto: I have very high expectations about CBD demand. There is some science about the impact that cannabis, and CBD in particular, has on various medical issues. People are learning how many people are getting the benefits of CBD to deal with issues like pain to replace things like opioids for the treatment of pain and inflammation and a variety of things. As people tell their stories, we’re seeing a significant increase in our patients. People are going to their doctors now and asking about cannabis.
Cannabis Professional: Will CannTrust sell edible cannabis products when they become legal?
Mr. Aceto: We absolutely plan to make edibles. We have PhD’s working for us [including] a former professor of nanotechnology. We have CBD beverages and creams and ointments in the office today. We already have the technology and patents pending. We have a patent pending for a process to create an emulsifying cannabis. Nanotechnologies manipulate particles so they decrease in size … and it drives the cost down for whoever needs it but it also creates a margin opportunity to us as a business.
Cannabis Professional: Does CannTrust have plans for the United States, where the 2018 Farm Bill is expected to legalize industrial hemp?
Mr. Aceto: Until there’s federal acknowledgement and legalization of cannabis (there), I think it limits the impact. You need to see the United States accept cannabis. Part of our international plans are in the U.S., it’s one of our largest opportunities, but until it’s legalized federally, we and others can’t be there. That’s going to be the most important thing.
Cannabis Professional: Do you have any new partnerships in the works?
Mr. Aceto: We have a partnership with Stenocare in Denmark. This is how we want to go about doing things, which is a joint venture. We’ve got local people in the market to understand the culture and have the relationships with physicians who speak the local language. We invest in these companies, share our intellectual property and standard operating procedures. As they’re becoming growers in Denmark, we’re shipping our standard and high quality oils to them. We’ve got a similar relationship we’ve announced in Australia and we have a relationship in Holland.
Cannabis Professional: You were the CEO of Tangerine (formerly ING Direct) from 2008 to 2017. Why did you enter the cannabis industry this year?
Mr. Aceto: Canada (had) the first ING Direct in the world and it ended up in nine countries around the world. It challenged a lot of status quo all around the world. When I chose to leave and I thought about what I wanted to do next, I was very interested in joining an industry that had a challenge to scale and an international focus. For me, I saw a once-in-a-lifetime opportunity to be a part of a company challenging the way we think about cannabis as a medical product but also a recreational product. It seemed like a no brainer to me.