A Canadian-listed medical marijuana company plans to grow nearly one million pounds of pharmaceutical-grade cannabis a year for the world market. It aims to create synthetic cannabinoids as licensed drugs for the U.S. market. And it intends to be among the first major “plant-touching” companies to be listed on the New York Stock Exchange.
To accomplish all this, it is packing its top positions with Philadelphians — who intend to stay in Philadelphia.
FSD Pharma says it is building out the largest indoor cannabis cultivation facility in the world about an hour east of Toronto and, in an unusual, two-pronged business strategy, will base its biotechnology arm in the Philadelphia region. The company’s aspirations are neatly summed up in its proposed stock ticker symbol: HUGE.
Raza Bokhari, a Philadelphia-based physician and serial entrepreneur, will serve as FSD’s chief executive officer, the company announced last week. Bokhari earned his MBA from Temple University’s Fox School of Business, where he serves on the board of trustees.
Shortly after graduating from Fox, Bokhari took a distressed New Jersey medical diagnostics company, Lakewood Pathology Associates, and rebuilt it into one of South Jersey’s fastest growing enterprises, which he sold in 2006 for $50 million to Water Street Healthcare Partners. He then led Parkway Clinical Laboratories, a diagnostic provider of addiction screening and opioid prescription monitoring. Parkway merged in 2008 with Rosetta Genomics (ROSG), a global biotech R&D company. Currently, Bokhari is chairman of the merged Parkway, is a managing partner of private equity fund RBx Capital, and serves as vice chairman of the World Affairs Council of Philadelphia.
“I am, for the first time, feeling like a hired gun,” Bokhari said. “But I know very much what I do not know.”
Bokhari said he relishes the new appointment and the chance to be a major stakeholder in the rapidly emerging industry. FSD has given him 40 million shares in stock options, according to the company.
Edward J. Brennan, a former Lankenau Medical Center surgeon with 25 years experience at major pharmaceutical companies, was named to be president of FSD’s biosciences division last month. Brennan, who earned his medical degree at Temple, previously served as a medical director at GlaxoSmithKline. He is the founder of IndiPharm, the Wayne-based provider of clinical trial services that was recently sold to a private equity firm.
And Charles Pollack, who formerly ran the Lambert Center for the Study of Medicinal Cannabis and Hemp at Thomas Jefferson University, was named FSD’s chief scientific officer in April. In the past month, Pollack has brought over several of Lambert’s advisory board members to serve with FSD, including nationally known cannabinoid researchers Ryan Vandry of Johns Hopkins University and David Casarett, a former Penn Medicine palliative care physician who is now at Duke and author of the book Stoned: A Doctor’s Case for Medical Marijuana.
Though FSD’s corporate headquarters will remain in Ontario, the executive team will operate out of Philadelphia, said Bokhari. “This is home, this is where we will work out of,” he said.
FSD is about “reaching economies of scale” and aims to produce nearly a million pounds of pharmaceutical-grade cannabis a year, he said. The growing facility — inside a former Kraft cheese plant in the Ontario town of Cobourg — is self-contained and large enough to require its own power sub-station and water supply. Tied into the Canadian rail system, the grow eventually will have nearly 4 million square feet available for production, Bokhari said. About 25,000 square feet is already functional.
Some of that Bokhari expects to be sold overseas, which he sees as a $134 billion emerging market. Germany, he said, is a likely target.
“But we have no interest in marketing plant-based cannabis in the United States, at least until the federal law is changed,” he added.
Instead, FSD’s U.S. operations will focus on synthetic cannabinoids produced in collaboration with algae technology firm Solarvest BioEnergy. Using algae in biogenerators, the molecules created in the million-dollar partnership will be consistent from batch to batch in a way plant-based cannabinoids can never be.
“In some ways, the Cobourg plant will serve as our financing arm,” Bokhari said. “We’ll use the Canadian-produced cannabis to generate cash for research here.”
The two-pronged strategy also will allow FSD Pharma to be listed on the NYSE, he said.
Most cannabis companies cannot be listed on U.S. stock exchanges as long as marijuana remains illegal under federal law. Production of synthetic cannabinoids, however, is not prohibited by federal statute.
North of the border, FSD will compete with well-capitalized cannabis giant Canopy Growth. In the United States., FSD considers its prime competition to be GW Pharmaceuticals, which produces an FDA-approved marijuana-derived drug called Epidiolex.
FSD Pharma, with a $250.7 million market cap, was trading Friday on the Canadian Securities Exchange for about 20 Canadian cents (15 U.S. cents) per share.