Exclusive Interview with Aleafia CEO Geoffrey Benic
Aleafia Health (TSX: AH) (OTC: ALEAF) has built a health and wellness ecosystem that includes cultivation, processing, delivery, a network of clinics and an education platform. CEO Geoffrey Benic spoke with New Cannabis Ventures about the company’s global presence, investment in technology and plans for growth in 2020. The audio of the entire conversation is available at the end of this written summary.
Leadership at Aleafia Health
As a former hockey player, Benic has talked to a lot of people who advocated for cannabis as a way to address issues like pain, anxiety and depression. He saw an entrepreneurial opportunity in cannabis and pivoted into the industry.
Aleafia has built a disciplined team of leaders with varied backgrounds and experience. COO Greg Rossi and Benic have known one another for 25 years. Rossi has a deep understanding of how to build and execute, according to Benic. CFO Benjamin Ferdinand comes from the TMX Group, while President of Clinic Operations Keith White and Chief Medical Officer Michael Verbora, MD, bring experience from healthcare. Vice President of Sales and Business Development Raffaele Spadafora bring his pharmaceutical background to the team.
In Canada, Aleafia’s health and wellness business is comprised of the medical business unit Emblem, its Canabo network of clinics and its adult-use operations. Through Emblem, the company formulates and sells products based on its patient data. Through Canabo, the company operates approximately 30 clinics across Canada.
The cultivation arm of Aleafia’s business uses three different methods: outdoor grow, a hybrid greenhouse and indoor grow. The company’s Paris, Ontario facility is built to EU GMP standards. This facility will serve as the lead on the company’s cannabis 2.0 product strategy. As a low-cost producer, Aleafia also has a domestic wholesale business.
The company is selling into Alberta, British Columbia, Ontario and some of the Atlantic provinces, according to Benic. It will soon be expanding its medical channel to Quebec with bilingual packaging.
Outside of Canada, Aleafia has expanded into Germany (through a partnership with Acnos Pharma) and Australia. With the company’s Paris, Ontario facility moving toward EU GMP certification, it will be creating oils and other products to sell into Germany, which is a starting point to expand further into the EU.
The company is also considering global expansion into markets in South America and Africa.
The company’s assets are coming online, and Aleafia is well-positioned, according to Benic. He sees some of the best opportunities are in organic growth, but the company is open to making acquisitions that help build a moat around its business and expand distribution opportunities.
Education is another important element of Aleafia’s strategy. The company’s FoliEdge Academy partners with local colleges. The ultimate goal of the initiative is to educate patients, consumers and doctors on the benefits of medical cannabis. All FoliEdge content and educational modules are developed in-house with the help of data points gathered from the thousands of patients the company has seen over the years.
Investment in Technology
In response to the COVID-19 pandemic, Aleafia has invested in technology. It has launched a platform to remotely connect their patients and doctors, resulting in no missed or failed visits. The company has also started its own touchless delivery system: AssureHome Delivery. Assure covers most of the greater Toronto area, and the company is continuing to expand its reach across Canada.
Strategic Partnerships and Funding
Aleafia has been able to attract strategic partners that have brought both funding and expertise, such as Serruya Private Equity. The company continues to look for strategic partners that can bring capital, help build relationships and strengthen its ecosystem. The company’s preference is for non-dilutive financing. Its assets have no debt on them, so options like sale-leasebacks are an option, according to Benic.
The company has completed nearly all of its capex projects, which means it is now focusing on leveraging its assets and driving cash flow. Aleafia has been risk-averse in deploying capital while maintaining an aggressive approach to capital projects with expected payback, according to Benic. He views the company in a strong capital position with a second-mover advantage.
Growth in 2020
In 2020, Aleafia will be focusing its efforts in three main areas: domestic adult-use and medical operations, domestic wholesale and international operations. As it continues to grow, the company will maintain a cost-conscious strategy to drive the business forward.
To learn more, visit the Aleafia website. Listen to the entire interview: