Kemptville cannabis grower Fleurish eyes reverse takeover after raising $6M

Published by: Ottawa Business Journal

In her former job at Health Canada, Renee Ellison had a front-row seat to witness the initial growth of Canada’s budding medical marijuana industry.

Ellison worked in communications for the federal department when it was building its framework of regulations for legalized pot early in the decade. She watched as dozens of entrepreneurs began vying for a piece of a pie that was expected to eventually be worth tens of billions of dollars.

None of them, however, were catering solely to female customers. When a close family member began using cannabis to deal with serious health issues, Ellison decided to get into the marijuana business herself to address what she felt was an untapped opportunity.

“That really changed my perspective on what I want to do and how I saw my life,” Ellison told OBJ this week. “I really wanted to find something that would be able to help people.”

Her company, Fleurish, says it’s the only medical cannabis enterprise in Canada targeting women exclusively.

The firm, which incorporated in 2013 under the name Farmacopia, expects to receive its growing licence from Health Canada later this spring and aims to have dried cannabis and oil products ready for sale by the end of the year.

“We really want to be the go-to company for products designed specifically for women,” said Ellison, who mortgaged her home to buy an eight-acre property near Kemptville that includes a former furniture store and woodworking shop. The buildings have been converted into a 20,000-square-foot growing facility capable of producing up to 1,500 kilograms of cannabis a year.

Ellison and company chairman Justin Shimoon have pounded the pavement on Bay Street, raising between $6 million and $7 million in private financing from about 30 investors. Ellison says she expects to take Fleurish public via a reverse takeover in the second quarter of 2018 as part of a plan to raise millions of dollars in additional funding for new products, marketing and research into how cannabis can better help women cope with everything from PMS cramps to insomnia.

A recent report from DIG Insights pegs the Canadian women’s cannabis market at about $2 billion a year, with 2.2 million women using the drug on a regular basis.

Fleurish marketing director Mary Beth Williamson said the company’s goal is to become the country’s No. 1 brand for female customers. The firm is anticipating annual sales of as much as $200 million within five years.

“The tricky thing is figuring out what it’s going to take to do that,” she said. “It will depend how quickly (the black market for recreational pot) converts to a legal market and what goes on with all the overall dynamics.”

Williamson said studies show women tend to use cannabis differently than men. Women are more likely to ingest pot in the form of edibles or oils rather than by smoking it, prefer less powerful pot with lower levels of active ingredient THC and favour “more fruity, more floral” flavours, she explained.

The company will start with selling dried flowers that can be smoked or vaped as well as edible oils, with different products aimed at the medical and recreational markets. Down the road, it’s hoping to expand its offerings to include chocolate-flavoured edibles and products such as bath bombs and topical creams.

Williamson said Fleurish is also hoping to partner with an Israeli group to conduct new research into how effectively marijuana can relieve the symptoms of endometriosis – a painful disorder in which tissue that normally lines the inside of a woman’s uterus grows on the outside.

Endometriosis often causes extreme pelvic pain, particularly during a woman’s menstrual period.

“It’s actually remarkably common for women, and it can impact your ability to enjoy sex or even (affect) fertility,” said Williamson. “I’ve heard women talk anecdotally about (how treating it with cannabis) has just been life-altering, what it’s done for them.”

Ellison and Williamson concede getting Fleurish’s message out could be a challenge given the already crowded field of competitors and the strict guidelines likely to be imposed on marijuana advertising once pot is legalized for recreational use later this year.

They’re hoping Fleurish’s focus on women resonates with female consumers.

“When you’re not coming in with the first-mover advantage, you really do need a unique point of difference.”

– Mary Beth Williamson, marketing director, Fleurish

“There are other companies that have been in the business for quite a while, so when you’re not coming in with the first-mover advantage, you really do need a unique point of difference,” Williamson said.

“We are the only company exclusively targeting the health and wellness of women. When you’re unique, that is much more distinctive and stands out more.”

In preparation for going public, Ellison has assembled a veteran group that includes Mike Smith, the founder of sales agency CIM, who will join the firm as chief executive after the reverse takeover. Agriculture industry veteran Hugh Bowman will also be coming on board as chief operating officer, while ex-Canopy Growth staffer Harvey Gracey has signed on as head grower.

“Our team is seasoned and they’re diverse,” Ellison said. “They’re experts in this industry.”

The company is in the midst of purchasing a 220,000-square-foot facility in another part of the province for cultivation, R&D and “multiple forms of manufactured products.” Ellison predicts the firm could employ up to 200 people once that property is up and running, hopefully before the end of 2019.

“We just have to stay flexible and kind of roll with what comes to us,” she said.