NZBusiness talks to Holly Wright and Paul Lee, co-founders of medicinal cannabis company Organic Genetics, about its NZ$4 million equity crowdfunding campaign, and the challenges and lessons of succeeding in a highly competitive market sector.
NZB: What is the back-story behind your decision to launch Organic Genetics? And what have been the biggest challenges and potential stumbling blocks you have faced in getting the business to where it is today?
Holly: We founded Organic Genetics in 2019, after numerous discussions around the potential of medicinal cannabis and its ability to help those in need. After seeing our friends and family suffer from the terrible side effects of prescription drugs and opioids, it only reinforced our desire to provide this wonderful natural alternative.
With Paul being raised in southern California, where it’s a ‘Mecca’ for cannabis, it meant we could nurture his existing relationships – ultimately allowing us to partner with an extensive team of seasoned industry professionals, as well as obtain access to exceptional Californian genetics.
Because this is such a new industry, it’s certainly been a long and challenging road, from navigating the licensing environment and securing locations to cultivate, to growing our team and raising capital. There was no road map here when we started, so there’s been so much to decipher and learn along the way. We’ve had to be very flexible and quick to pivot with all of our business decisions, but every day we put in the work and long hours because we’re so passionate about what we’re building.
NZB: You’re facing a lot of competition from other new entrants. Why do you think you will succeed as the competition hots up further?
Holly: We believe Organic Genetics has a few key points of difference that will really help establish ourselves as market leaders in this industry.
Firstly, we aim to be vertically integrated, which means we will have full control over our supply chain and all processes from seed to sale. We understand there’s currently only one other company in New Zealand adopting the same approach.
Secondly, to build a successful seed-to-sale value chain, we knew it would be integral to bring in top industry experts who could provide not only a wealth of knowledge, but real trial and error experience. We’ve seen how early mistakes in this industry can be extremely costly – one bad crop can have devastating effects. But we also saw this as an opportunity to get ahead and avoid common pitfalls other companies may encounter when entering this sector. Our team was assembled with much consideration, with proven track records in the business of cannabis, and extensive experience in cultivating on a mass scale, extraction, research and product development.
And thirdly, our integrated partners are another aspect to ensure our success. Partnerships with Originals who have allowed us access to their highly sought-after genetic pool; product agreements with iX Biopharma and FarmCeutica to potentially import and distribute their EU-GMP certified product suite; and lastly, our partnership with ANZ Pharma for access to extensive distribution channels into the New Zealand market.
NZB: How important is the equity crowdfunding process in securing a future for the business? And, from experience, what lessons can you now share around the whole crowdfunding process?
Holly: The capital raising process is integral to taking Organic Genetics into the next phase. By reaching our equity crowdfunding goal by late-October when the offer closes on PledgeMe, it will help us fast-track our plans for the internal buildout of an Indoor EU-GMP Cultivation facility in Auckland, where we will cultivate high THC premium, craft cannabis.
Crowdfunding is equally important to us for building our community. We’ve always had a vision of curating a strong community of people who believe in both the science and the quality of life that medicinal cannabis can provide. By opening our door for Kiwis to invest, we’re confident we can develop a strong network of individuals who all share the same passion for medicinal cannabis and for the success of Organic Genetics.
However, crowdfunding is not the only requirement to secure our future. With planning underway to submit multiple EU-GMP imported CBD products for approval, we’re predicting they will provide a steady revenue stream for the business from the get-go.
NZB: The medicinal cannabis sector has come a long way in such a relatively short time. What concerns do you have for the sector going forward? What will be the biggest hurdles to growth?
Holly: Yes, the medicinal cannabis sector has come a long way, but we still have some catching up to do in New Zealand.
Two hurdles that all companies in our industry face are product approval processes and regulatory systems. The regulations put in place by our governing bodies are some of the most stringent in the world, and there have been compliance challenges for many companies trying to get products into the market. Hopefully we can learn from the industry globally and implement the right set of rules that will allow New Zealand to become a leader of innovation in the cannabis space.
The education of medicinal cannabis and awareness of its benefits is also a hurdle that as an industry we need to overcome together. Even with a national movement, slight shift in stigma and international success of cannabis, there’s still a huge need to educate consumers and health care professionals around the potential benefits of medicinal cannabis and how it can be prescribed.
NZB: What are some of the lessons you’ve already learnt about the exporting of your product to world markets? And what are your export goals in the long term?
Holly: When it comes to exporting, we understand that everything needs to fall under the EU-GMP umbrella. This is a new experience for us, but luckily, we have the right team in place to facilitate this.
One of the advantages of being here in New Zealand is that we are already known globally for having high quality, clean and green products. Coupled with the strict regulations our governing bodies have set, New Zealand has a distinct advantage when it comes to exporting medicinal cannabis. International markets that we look to export to will be secure in the fact that our products meet only the highest regulations and are produced in one of the most envious locations worldwide.
NZB: Do you have any advice for other husband and wife businesses to help ensure the success of both the business and their relationship long-term?
Holly: Understand each other’s working styles. Once you have a deep understanding of how to work together productively, it can be a real advantage having two different perspectives when situations arise.
Be a good friend and support system for each other, knowing when to jump in and help with the parenting or household duties so the other can get on to different tasks in the business.
Spend quality time together outside of work. This is crucial to maintaining a good work-life balance and putting things into perspective.
It can be a challenging road but equally as rewarding. Spending every day working side-by-side, problem solving, celebrating the wins, and watching your business grow from the ground up because of your collaborative efforts is something to be truly proud of.
NZB: Where do you envisage your business to be in its journey in five years’ time?
Holly: We envisage being fully operational and vertically integrated, firstly cultivating our high THC premium craft cannabis at our indoor facility and then cultivating our CBD rich hemp at our outdoor location in Northland. We’ll be developing, manufacturing and shelfing products both locally and internationally. We’ll also be involved in educational programmes and working through social initiatives that are important to us, both personally and as a business. It’s exciting to think about the future – growing this business with incredible staff and a supportive community behind us.
For more information on Organic Genetics’ capital raise offer, which closes on 26 October, check out the PledgeMe website.
Main photo: Holly and Paul.
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