Written by Andrew Seale
Five years ago, Scott Walters walked away from two decades in the investment banking industry to focus on his health and pursue other business opportunities.
“I was using cannabis medicinally after an accident, and realized there was a business forming in Canada and there would soon be a very large economy around medicinal cannabis with the chance of legal cannabis in the distant horizon,” he says.
Today, Walters is one of the emerging sector’s most prolific serial entrepreneurs.
“I’m going into my fifth start-up in the cannabis space in five years, four of them are now public,” says the co-founder of Molecular Science Corporation (MSC).
His first endeavour in the space was the Cannabinoid Medical Clinic, a small clinic at Yonge and Eglinton spun out of conversations with a pair of doctors focused on research-driven cannabinoid therapy. That grew to 22 clinics across Canada and over 40 doctors. They tapped into the Scientific Research and Experimental Development (SR&ED) tax incentive to lower the cost of patient acquisition.
“We created an efficient sales channel for medical cannabis companies of patients who were involved with very serious physicians attending to actual needs,” says Walters. Patients were never charged for the service and licensed producers received feedback from the medical community. The business went on to be acquired by a licensed producer.
After that, he launched his own licensed producer in British Columbia called THC BioMed, from his base in Toronto.
“That was licensed producer number 29,” says Walters. “That’s now run by a management team out in Kelowna.” Shortly after he joined the board of Supreme Cannabis which is a Toronto-based, now-TSX-listed cannabis producer.
“It went from an idea three and a half years ago to an $800 million dollar company with seven of the largest cannabis customers in Canada buying our product,” he says. “As a director of that, I’m very proud.”
But it’s the service-oriented and ancillary-service-oriented sphere that he sees as the best spot to be at the moment. He points out that the majority of the market right now is focused on cannabis cultivation.
“Very few people have invested in the logistics and the workflow component of our business,” he says. “In other words, there are very few investors that recognize the importance of owning the parking lot around the stadium.”
That’s where Walters feels he excels. And his latest effort MSC is a shining example of that. The science-focused service company is targeting the cannabis industry at an enterprise level, building solutions that make workflow more efficient and make the product safer.
“And in many cases (it) provides them a distinct competitive advantage based on science to allow them to compete more readily in recreational and medicinal cannabis here in Canada, and as an exporter abroad,” says Walters.
The forefront is laboratory services; advance data analytics into cannabis cultivation and formulations. The company also provides certificates of analysis for pesticide testing that allow cannabis companies to then release their marijuana as a safe product to customers for consumption.
“We’re the gatekeepers – along with other labs – of pesticide-free cannabis products,” he says. MSC has 13-full time employees, six of which are PhDs based in Toronto.
They’re currently building a 3,500 square-foot state-of-the-art automated testing facility inside of a dealer licensed platform.
“It’s a special license issued by Health Canada that allows us to work with a variety of narcotics including cannabis, and import and export and test those narcotics and test them in different formulations,” he says, adding, not for sale to the public but for sale to other licensed drug businesses like cannabis companies. The space will be up and running at the end of June.
“We’ve also introduced Canada’s first mobile cannabis testing laboratory on a custom built 53-foot trailer,” he says. “It’s hauled by an 18-wheeler, weighs about 50,000 pounds and provides on-site pesticide testing as well as technology demonstrations and educational forums.”
Through his half-decade in the cannabis sphere, Toronto has continually proven an asset for Walters.
“The cannabis economy in Canada for the business end is very much a Toronto business,” he says. “This is where we want to be, and where there is a tremendous amount of business for the next two or three years – we don’t need to look anywhere else.”
Photo credit: Cameron Bartlett (www.snappedbycam.com)