Insider Interview With Eitan Popper, Strategic Advisor at CREO: His Start In Cannabis, Possibilities For The Future, Intellectual Property, and Florida’s Framework

 

 

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AUTHOR: Heather Allman

PUBLISHER: CANNABIS LAW REPORT

 

 

Creo welcomes cannabis industry pioneer Eitan Popper as Strategic Adviser;

Popper’s MedReleaf Corp. was acquired for $2.5b in 2018

San Diego, CA – March 31, 2021 – Creo, an ingredient company with a proprietary platform for producing natural rare cannabinoids without the cannabis plant, today welcomed Eitan Popper as an investor and strategic adviser. Popper was the Co-founder & President of MedReleaf Corp., one of the largest and most reputable, vertically-integrated medical cannabis producers in the world, that was acquired for $2.5B in 2018, in what was then the largest acquisition in the industry’s history.

Popper, a Stanford M.Sc. in Environmental Fluid Mechanics, has a strong background in entrepreneurship, and international business and project development, across multiple industries. He is also currently Chairman of the Advisory Board of BioHarvest Sciences (BHSC), a fast growing publicly traded biotech company, and acts as an active private investor through River Growth Capital Corporation.

“Eitan’s history and success in the business is unmatched,” said Roy Lipski, Co-founder and CEO, Creo. “We are grateful to have both his guidance and support as Creo begins to unlock the vast potential cannabinoids hold as mainstream ingredients.”

“Eitan’s history and success in the business is unmatched,” said Roy Lipski, Co-founder and CEO, Creo. “We are grateful to have both his guidance and support as Creo begins to unlock the vast potential cannabinoids hold as mainstream ingredients.”

To enable broader access to rare cannabinoids, like cannabigerol (CBG) and cannabigerolic acid (CBGA), Creo has partnered with biotech industry-leader Genomatica to create a patented fermentation technology platform that produces consistent high-quality, rare cannabinoids, sustainably, at scale, and at a higher purity level than traditional methods.

 

“In addition to enabling sustainable and cost-efficient production of both the major and minor/rare cannabinoids found in the cannabis plant, the emergence of fermentation technology within the cannabinoid industry allows for the production of novel, unique, and/or modified cannabinoid molecules, unlocking a vast universe of promising therapeutic applications.

Creo’s proprietary technology, accomplished management team, IP portfolio and successful head-start are among the reasons I’ve decided to invest and support the Company. I believe in the immense value and potential of cannabinoids, and in companies like Creo that are at the forefront of this industry,” said Popper.

 

“In addition to enabling sustainable and cost-efficient production of both the major and minor/rare cannabinoids found in the cannabis plant, the emergence of fermentation technology within the cannabinoid industry allows for the production of novel, unique, and/or modified cannabinoid molecules, unlocking a vast universe of promising therapeutic applications.

Creo’s proprietary technology, accomplished management team, IP portfolio and successful head-start are among the reasons I’ve decided to invest and support the Company. I believe in the immense value and potential of cannabinoids, and in companies like Creo that are at the forefront of this industry,” said Popper.

In January 2021, Creo announced that it had produced CBG and CBGA through fermentation at 12,500-liter scale, becoming the first fermentation-based cannabinoid company to successfully produce finished CBGA.

Creo’s promise of greater sustainability is why it makes its cannabinoid ingredients using one of the world’s oldest natural processes – fermentation. Fermentation generally requires less water, energy and land than some of the plant-based approaches typically used to extract cannabinoid ingredients.

 

BACKGROUND 

Eitan Popper was the co-founder and President of MedReleaf Corp., which was acquired in 2018 for $2.5 billion USD. Prior to its acquisition, MedReleaf was one of the largest and most reputable vertically integrated medical Cannabis producers in the world. Mr. Popper brings over 15 years of international partnerships, entrepreneurial ventures, disruptive industry, large-scale project development, engineering and investment experience. He holds a B.Sc. in Civil Engineering, a M.Sc. in Environmental Fluid Mechanics from Stanford University, and an MBA from the Recanati School of Business.

In April 2021, Cannabis Law Report interviewed Eitan Popper, Investor and Newly Appointed Strategic Advisor at Creo. Our discussion focused on everything from the health potential of cannabis to current and future market trends, as well as his insight on the industry and his leadership role.

 

Eitan Popper, Strategic Adviser at Creo

 

CLR: Do you have a life motto or favorite quote?

 

Eitan Popper

Things are never what they appear to be.

 

CLR: Let’s talk about your journey in the Cannabis industry at large, culminating in your current role. How did you get started in Cannabis?

Eitan: I was truly exposed to some of the health benefits and the immense therapeutic potential of medical Cannabis for the first time around 2012. I was living in Israel at the time, and had the opportunity to meet with one of the largest government-approved Cannabis growers in the country.

This group was unique in more than a few ways, and quite ahead of its time. They had stable high CBD – low THC genetics (basically stable non-psychoactive Cannabis strains) available – when this was very rare – and long before CBD was as widely known, accessible, or understood as it is today.

 

Raphael Mechoulam

 

They were directly collaborating with Prof. Raphael Mechoulam and with Prof. Ruth Galili – Cannabis research pioneers – and were actually supplying them with CBD for their respective research projects – since they were the only ones who had reliable plant-derived CBD supply in Israel.

They were also collecting patient data for thousands of patients – no one else was doing that at the time.

Lastly, they were collaborating with a nursing home facility, providing access to medical Cannabis to elder patients, and working very closely with the medical staff and the nursing team at the facility.

I met with Prof. Mechoulam and with Prof. Galili, I spent time with some of the doctors, with the chief nurse at the nursing home, and with many of their patients.

I was very impressed and mostly surprised to see how Cannabis was substantially changing people’s lives – reducing the frequency of seizures and improving the lives of pediatric epilepsy patients; assisting with the management of chemotherapy side effects; with chronic pain; with inflammatory diseases; and improving the lives of elder patients suffering from spasticity – just to give a few examples.

 

I was not a Cannabis activist, nor was I a Cannabis consumer or a patient myself, so I didn’t really know Cannabis first hand. It is important to note that at the time (only 9 years ago) Cannabis was perceived very differently than today.

It was not accepted at all by the medical community, or by healthcare institutions, nor was it accepted by most of the population. That has obviously changed (quite radically), during the past 5- years or so.

 

At the same time, Stephen Arbib – a partner of mine, an experienced entrepreneur, also a Founder of MedReleaf, and one of the original investors in the Company, who was based in Toronto – saw the opportunity in Canada.

Health Canada was preparing its MMPR program and looking to issue commercial/industrial scale medical Cannabis production licenses for the first time.

We decided to leverage some of the clinical experience and the Cannabis related research from Israel, as well as talent we had identified and had access to in Canada.

We were fortunate to be among the first companies to obtain a production license from Health Canada around 2013-2014.

I moved from Israel to Toronto in June of 2014 and had the fortune to experience firsthand what hypergrowth really means.

In less than 4 years, I saw our company grow from 5 employees to more than 600; our patient base from less than two hundred to many thousands; our production capacity and infrastructure from a single site with an initial production capacity of less than 1 metric ton of dry cannabis per year, to a multi-site operation with over 35 metric tons of dry cannabis production per year.

 

MedReleaf’s story is unique within the North American Cannabis landscape, for more than a few reasons.

We were truly patient-centric, data-driven, and extremely focused on quality. This translated into value creation for all stakeholders very quickly.

 

Just to give a few examples, the company was profitable only 8 months after we sold the first gram of medical Cannabis to our first patient in August of 2014.

In this context, MedReleaf was the first – and for at least 4 years – the only Canadian licensed producer that was profitable. It was also the first Cannabis Company in North America that was both GMP and ISO certified.

It was the only large Canadian licensed producer that did not irradiate its product – simply because it was clean and would meet all bacterial/fungi/contaminant requirements – without irradiation.

Lastly, the Company’s average selling price per gram was 50% higher than the average market price as reported by Health Canada’s official figures – so the market clearly recognized the quality and was willing to pay a premium for it.

Put simply, until massive consolidation took place in the industry – MedReleaf was the largest and most successful Medical Cannabis licensed producer – by any metric, whether revenue, profit, price per gram.

Ultimately, this translated into return on invested capital. We took the Company public in June of 2017, and announced the sale of the Company less than a year after – in May of 2018.

This was the largest exit in the industry at the time, and most probably the highest return on invested capital that had been generated to shareholders in the industry.

Namely, our original investors made more than 250x on their capital in less than 5 years, our pre-IPO round investors made 10x in 18 months. 

 

Since 2018 when we sold the Company, among other things, I’ve been investing in healthcare and biotech, and have also been supporting a few companies as an advisor.

 

 

 

 

How and why I got involved with Creo? 

I started looking at the next frontier of Cannabis production technology and cannabinoid science more than 18 months ago.

As President of MedReleaf, I was deeply involved with the development of our production capacity and infrastructure, as well as with the company’s cultivation activities. Cannabis production as we know it, is both capital and labor intensive.

It is also quite constrained, when you look at it in the context and scale of CPG or the pharmaceutical industry.

What Creo does allows it to overcome these constraints, at a significantly lower production cost and far less environmental impact. I saw these constraints firsthand.

 

CLR: Why do you love what you do? Tell me a little bit about why you care about cannabis quality so much, and about ensuring clean consistently clean and safe cannabis for consumers?

Eitan: Ultimately, every consumer cares about consistency, quality, and safety. These are values that are considered to be basic/essential in most or all industries, especially CPG (food, beverage, personal care), pharmaceutical, health and wellness.

Cannabis is no different, it is simply becoming a regulated industry. Quality and consistency is everything.

If you may offer quality and consistency at a competitive cost and in a more sustainable manner, the value is obvious.

 

CLR: What is it about your position that most attracted you to it? What do you enjoy most about your job? The upsides? The downsides?

Eitan: It is great to be able to leverage your personal and professional experience and see how it may be valuable for others.

This specific role (Strategic Advisor) allows you to think creatively without the pressure of the daily operation, which is not necessarily the case when you have a senior executive role in a fast growing company.

 

 

 

CLR: How do your past professional expertise and experience help you with your leadership role?

Eitan: There are basic multidisciplinary aspects that apply to almost every start-up, or every company – from decision making, strategy, negotiation, hiring and retaining talent, financing, and ultimately (and probably) most importantly – telling a good story.

When it comes to the Cannabis industry/product/consumer in particular – there are obviously multiple lessons and knowledge that are relevant to Creo’s business.

CLR:  Who taught you about or how did you learn your entrepreneur and business skill set?  Do you have a mentor, concerning the cannabis industry? 

Eitan: Mainly observation, lots of trial and error, and a set of values from a young age. I’ve never had a mentor as such. Not sure I believe in the concept of having a single (and formal) business mentor. I know it has become quite trendy though.

 

I think you learn from everyone, and from every experience, and that’s what I’ve tried to do. Sometimes it is easier to learn what not to do.

Regardless, I believe Creo is quite focused on its people, on alignment between the Company’s goals and personal/professional goals, as well as on organizational and corporate culture fit.

 

 

 

CLR: How have consumers changed since you started in the cannabis space?

Eitan: Less than 10 years ago, Cannabis consumers mostly (but not only) consisted of two main groups:

  1.  Connoisseur or traditional/experienced Cannabis consumers
  2.  Self-medicated patients or very specific ailment patients – that had resorted to Cannabis – because it was the only thing that provided relief.

Now, Cannabis is accepted by a large percentage of the population – and is not necessarily viewed as some illegal or dangerous drug.

On the adult use / recreational front, you see executives, professionals, soccer moms – some consume it at the end of the day for relaxation – just like a glass of wine or a beer. Others with friends or on the weekend.

 

 

On the medical front – the number of doctors and health practitioners that are more comfortable with Cannabis has grown exponentially, and so has the number of patients.

There is also a fast-growing wellness category in between (the recreational and medical verticals) now – CBD supplements for example.

Last time I checked, more than 10% of adults between the age of 18 and 55 in the US purchase and consume CBD supplements on a regular basis.

 

CLR: Most importantly, what consumer product or service demand do you see trending currently — AND— Do you feel that Cannabis companies and brands are adapting, changing their mindset about product priorities?

Eitan: I believe that the growth of edibles + beverage is clear; however, it is slower than one would have expected. Large CPG companies haven’t joined the market yet. It is mostly Cannabis focused brands, MSOs etc.

Once large food and beverage companies will introduce products to the market – be it granola bars with CBD or cannabinoid beverages – adoption and growth will be massive.

 

CLR:  How is your actual job different than the job/role you thought it would be?

Eitan: I think I am learning more than I had expected, which is great. It makes it more interesting and fulfilling.

 

CLR:  Let’s go beyond Corporate Social Responsibility. Talk to me about “positive impact” and what that means for Creo? 

Eitan: Creo’s technology is immensely more sustainable (and environmentally friendly) when compared to the alternative – traditional cannabis cultivation + processing.

Whichever way you look at it, energy consumption, CO2 footprint, land use, water use. It is simply more resource efficient – by a few orders of magnitude.

 

CLR:  What is the biggest challenge you personally face in your role? How do you solve it or work to change it?

Eitan: Providing valuable input – some of which may include criticism – in an engaging and positive way, without demotivating or discouraging management.

Basically, disagreeing or voicing your opinion when you believe things should be done differently, in an effective way.

 

 

CLR: What are your thoughts concerning federal legalization and/or de-scheduling of cannabis? Do you see it passing altogether as omnibus legislation, or more as a piecemeal type legislation?

Eitan: I believe some sort of decriminalization will pass first, along with something like the SAFE Banking Act. It seems as if this administration may decide to leave the rest to the States.

It doesn’t appear as if we will see full federal legalization under the Biden administration – but I’d be happy to be proven wrong.

 

 

CLR:  What did some states do right in their Cannabis legislation and frameworks? What still needs improvement?

Eitan: I think Florida’s regulatory framework, specifically as it relates to vertical integration – allowed for scale and supply chain efficiencies. In principle, it also allows for more effective inspection and enforcement.

I believe that QA/QC measures are lacking in more than a few States. This obviously creates safety, quality, labeling, and product consistency challenges.

Unfortunately, in certain States – the supply chain is broken. It is inefficient, and it hinders an effective transition into a proper regulated/legal market. Hopefully the market itself as well as the consumers may also push the regulatory frameworks in the right direction.

 

CLR: Overall, as a nation is in flux, transitioning or morphing through a metamorphosis of our own. One thing most Americans agree on is Cannabis legalization in some form or another.

Tell me about your personal vision for the U.S. cannabis market and your thoughts on federal legalization, or de-scheduling, and your vision for the future of cannabis in 2 years? How do we get from here? 

Eitan: This is a tough one…as it obviously involves some speculation.

It appears as if key figures of the Democratic party are quite determined to push for some sort of Federal de-scheduling or decriminalization.

At the same time, the Biden administration has clearly and deliberately limited its statements on the subject, and as of now – has not expressed explicit support. We shall see.

 

CLR: Do you feel that people are generally adapting, changing their mindset —from one of Prohibition stigma to one of research, de-scheduling, and/or normalization? 

Eitan: Absolutely.

There’s no doubt that there’s already been a clear shift in how people perceive Cannabis, and to what extent Cannabis is accepted as as a product that should be legal and properly regulated – not only in the US and in Canada, but globally.

Although there’s still significant room for more acceptance and for further progress towards more effective and consistent regulatory frameworks, and towards formal legalization (in numerous jurisdictions) –

I think we can agree that we’re at a point where the current Cannabis acceptance trend can no longer be stopped or reversed.

Capital markets in major economies have accepted the Cannabis industry – you have large publicly listed Companies trading on major exchanges.

The FDA has approved Cannabinoid based drugs; the medical and research communities have validated and recognized the therapeutic potential of Cannabis and Cannabinoid molecules; and large consumer brands are investing in the industry.

In short, Cannabis and Cannabinoid based products are here to stay.

 

 

CLR: How do you succeed, or what skill set(s) have you had to develop, nurture, or re-learn in a new way?

Eitan: Not sure I can accurately describe “How do I succeed?”, but I think it involves the following:

—Hard work and dedication

—Not compromising on things that matter

—Being true to yourself

—Building trust and strong personal relationships

—Listening more

 

CLR:  What advice or words of wisdom can you give to other leaders to help their teams and companies and brands to thrive?

Eitan: Ultimately, it’s all about people. I believe that people are truly happy and are fully engaged when they are proud of the work they are doing, and/or when they are involved in something they can feel proud about.

 

Allowing people to feel or have that sense of pride is key.   

 

CLR: What advice do you wish someone had given you BEFORE you got into the cannabis industry?

Eitan: Be more patient. Listen more.

 

CLR: What are you most currently passionate about at CREO, and why?

Eitan: The people (once again) and what they are focusing on – of course.

It’s a great group of people – highly dedicated, talented, and with integrity – focusing on solving key constraints we currently see in the Cannabis industry, which will enable access to high quality consistent Cannabinoids, as well as to rare and novel Cannabinoid molecules.

 

CLR: What future impact does CREO actively strive to make in the growing national cannabis space?

Eitan: Creo can impact the Cannabis space immensely, and it strive to do so as follows:

Allow Cannabinoids to be fully accepted by and introduced to the products of some of the major and more traditional CPG industry players (food, beverage, personal care) – at scale. This is something that we haven’t seen to date. For example, players such as Nestle, P&G, and Kellogg’s haven’t introduced Cannabinoids as ingredients to their products yet, for more than a few reasons. Creo has the potential to change that.

Enable access to rare Cannabinoids and to novel Cannabinoid molecules. This is mostly relevant for the pharmaceutical (drug discovery and drug development) industry, as it can unlock the therapeutic potential of numerous molecules that are not available at sufficient quantities or at all – in the Cannabis plant.

 

About Creo

Creo is an ingredient company that produces rare and novel cannabinoids using the age-old natural process of fermentation, coupled with cutting-edge technological innovation. Founded in 2016 and based in California, Creo’s mission is to enable the creation of cannabinoid products that help people everywhere while doing less harm to the planet. Creo’s technology partner and major shareholder is industry-leading biotech firm Genomatica. To learn more, visit www.creoingredients.com.

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