Several years ago, George Scorsis was leading Red Bull’s Canadian division when he heard of changes coming to the country’s medical cannabis market. Thanks to loosening rules, more patients could access their medicine through the country’s federally legal program, and talk of full legalization had begun to swirl.
The former Bacardi executive realized that from a branding perspective, the industry had a long way to go. Nonetheless, he was intrigued by the opportunity and in 2015 he accepted a position as president of Mettrum, one of the country’s first major cannabis companies.
Now leading his third cannabis company, WeedMD, he’s a bit of a contrarian: While companies on both sides of the border chase recreational users, Scorsis continues to focus on the medical side of the business. It’s a strategy that has served him well. So far, Scorsis has led two medical-oriented companies to nine figure acquisitions.
An “extreme shift”
Scorsis entered the industry, three years before Canada went fully legal. Still, Mettrum’s handful of competitors already had their eyes on adult use consumers. Scorsis started to study the American market and decided Mettrum should emphasize wellness rather than recreation. “We decided to grow a CBD strain and that’s what made us,” he said. “Everyone else was trying to be pseudo adult use.”
To raise capital, he said, companies emphasized “things that sound good to bankers” like total canopy space and intellectual property, but not what consumers wanted: high quality flower and “Brands that become sticky to their lifestyle.” Since then there’s been an “extreme shift” as Canadian companies have had to attract consumers. “When capital dries up and you don’t have a brand that sells, you’re done,” he said.
The company pioneered an independent path. It created a color-coded “Mettrum Spectrum” designed to educate physicians on various strains and their cannabinoid content. The idea, along with Mettrum’s tens of thousands of patients, attracted Ontario-based Canopy Growth, which announced plans to acquire Mettrum for C$430M at the end of 2016. Globally, it was the largest cannabis deal to date.
WeedMD’s unique selling proposition
After several months at Canopy, Scorsis decided to strike out on his own. Unlike many Canadian operators, he remained interested in the medical and wellness side of the business and started Liberty Health Sciences in Florida, a vertically integrated business in one of the largest and most promising medical only states. In December 2020, Liberty Health Sciences announced it would be acquired by multi-state operator Ayr Strategies (now Ayr Wellness) for $290M (C$372M) By that time, Scorsis had become CEO and chairman of WeedMD with a plan to dominate Canada’s medical market.
In 2019, with Scorsis at the helm, WeedMD announced plans to acquire Starseed, a “paid, insured medical platform” which provides medical cannabis to workers in several of Canada’s largest unions. Federal legality enables workers to spend $2,500 annually on medical cannabis. This creates a consumer base of hundreds of thousands of workers, a “unique selling proposition,” for WeedMD.
“When you’re a laborer there’s wear and tear on your body,” Scorsis says. A study published this year in the journal Applied Health Economics and Health Policy found that access to legal medical cannabis appears to have reduced opiate prescriptions in Canada.
U.S. studies have shown similar results, though the data may be complicated by federal illegality. “We’re looking very, very closely” at pursuing similar opportunities in the U.S. market, Scorsis said, though he’d like to see medical use become federally legal before diving in. He also likes what he sees in Europe, especially the United Kingdom, where he sees potential to quickly become a market leader. “We need to be disciplined,” he said and not pursue foreign expansions just for the value of issuing a press release.
A focus on wellness
To maintain and expand the wellness focus, Scorsis partnered with U.S.-based Mary’s Medicinals to become the exclusive Canadian producer, marketer and distributor for the brand.
In addition to serving medical and wellness consumers, WeedMD has consumer-facing adult use brands Color, a premium offering, and value brand Saturday. While there’s no shortage of competition, Scorsis sees WeedMD’s edge as its focus on quality. “Our head grower is a legacy grower,” who successfully transitioned to the licensed market, he said and the head of operations has years of experience as a quality assurance manager in the poultry industry “where if you miss something you can have real liability.” Scorsis said. “It’s really different from what most people are capable of in this industry.”
He’s also struck licensing deals with PAX vapor, and rapidly expanding retailer, Fire & Flower – even producing their CBD oil via a white labelling contract. This speaks to the company’s cultivation and extraction pedigree and its growing focus on higher margin products in addition to high-quality flower.
On Scorsis’ watch the company has gone through a significant transformation and “reverse engineered the company to look at the patient and the consumer first.” Scorsis said. “We know what they want and we’re delivering what they want. It’s been a transformative year.”