Developing Data-Driven Cannabis Platforms
This CB2 Insights profile is part of a paid investor education campaign.*
CB2 Insights (CSE:CBII,OTCQB:CBIIF) is an established, data-focused cannabis solution provider with a proven revenue model and a growing international presence. The company’s mission is to mainstream medical cannabis into traditional healthcare by providing the industry with real-world evidence-driven data through its clinical operations and contract research organization (CRO) services. Currently, the company primarily generates its revenue through its network of clinics. In the future, management intends to generate revenue from clinical trial design and management, helping other stakeholders grow their patient registry and the licensing of proprietary analytical tools that harness data taken from its clinics’ operations.
CB2 Insights CEO, Prad Sekar, and his co-founder and COO, Kash Qureshi, are entrepreneurs that have launched and managed businesses in the fields of practice management, technology, education, recruitment and medical devices. Their combined backgrounds in healthcare and technology help the company create innovative technology solutions and services that bridge the gap between patients, physicians and vendors in the cannabis industry.
CB2 Insights is focused on its multi-state US clinical network, including its brands Canna Care Docs, Relaxed Clarity and MedEval. MedEval is a service-based offering that operates a growing network of cannabis evaluation and education centers, which the company is now beginning to leverage to support clinical research efforts of major industry stakeholders. This was most recently illustrated when CB2 Insights was selected by UK-based Drug Science as the exclusive research technology platform to manage the largest medical cannabis pilot program in the UK with 20,000 patients.
Today, CB2 Insights has 34 clinics across 13 US states. In 2018, the company earned approximately $11 million in revenue and its most recent quarter signaled that its newest acquisition in New Jersey has the company on track to approach a $4 million quarter.
“While each of our established brands continues to grow within Canada, the US and internationally, we now have a substantial opportunity to leverage these assets to build predictive analytics tools to fill the deep void of trusted data currently available in this highly fragmented industry,” said CB2 Insights CEO Prad Sekar. “CB2 Insights’ mission is to ensure that big data is central to the evolution of the industry, as it is more needed today than it has ever been before.”
CB2 Insights has also been expanding its technology offerings to physicians by integrating its clinical decision support (CDS) tool with Premier Health Group’s (CSE:PHGI) electronic medical records (EMR) platform. The integration is expected to give the company access to over 4,600 physicians and healthcare practitioners that use Premier Health’s platform. The company has also begun integrating its technology into MyAccess Clinics, a wholly-owned subsidiary of Althea Group Holdings Ltd. (ASX:AGH), in the UK as well as VIVO Cannabis Inc. (TSXV:VIVO,OTCQX:VVCIF), an Ontario-based cannabis company recognized for its premium products and services.
CB2 Insights has also recently entered the Colombia market with a focus on research projects led by the company’s new Medical Director, Dr. Paola Cubillos. Since entering the country, the company has signed a research agreement with Colombian licensed producers FCM Global for the development of new products. CB2 Insights is also leveraging its CROs services to form clinical partnerships with GL Brands (OTCQB:FRLF) and Vireo Health International Inc. (CSE:VREO, OTCQX:VREOF).
CB2 Insights’ Company Highlights
- Global cannabis market expected to reach US$146.4 billion by 2025.
- US CBD market projected to reach $22 billion by 2022.
- CB2 Insights operates 34 clinics across 13 US states.
- Canna Care Docs has a patient retention rate of up to 80 percent.
- Annual recurring revenue of approximately $200 per patient.
- Total revenue of $11 million in 2018.
- Recent acquisitions resulted in C$4.2 million in revenue in Q3 2019.
- Sail and TokeIn technology platforms licensed to clinics and retailers, among others.
- CB2 Insights is integrating its CDS tool with Premier Health’s Juno EMR platform, providing the company access to over 4,600 physicians and healthcare practitioners.
- CB2 Insights has been selected as the exclusive technology platform by Drug Science.The company has entered agreements with VIVO, MyAccess Clinics, FCM Global, GL Brands and Vireo Health.
- Sekar and Qureshi bring a wealth of healthcare experience and protocols to the cannabis industry.
Cannabis in the US
The global cannabis market is expected to reach US$146.4 billion by 2025, creating the opportunity to expand and capitalize on a growing market. In the US, the legal cannabis market was estimated at US$7.06 billion in 2016 and is expected to grow at a CAGR of 24.9 percent leading into 2025.
In the US, cannabis is classified as a Schedule 1 drug, which means that it is deemed to have no medical value, and is heavily regulated by the federal government. Hemp, meanwhile, which is cannabis that has less than 0.3 percent THC, was also listed as a Schedule 1 drug but was exempted from the passing of the US Farm Bill. Subsequently, the US CBD market is expected to reach $22 billion by 2022. The market is set to grow as more states look towards legalization and consumers look for natural alternatives to pharmaceutical products.
CB2 Insights’ Data-focused Business Model
In 2018, Deloitte’s “Real-World Evidence Benchmark Survey” revealed that 65 percent of respondents felt that they had a lack of access to external data, a pain point that is represented in the cannabis industry. As a way to ease this pain point, CB2 Insights has developed comprehensive, data-driven software and clinical services to ensure that cannabis end users have access to industry insights, evaluations and education.
CB2 Insights has a multi-brand approach for collecting data for cannabis growers, retailers, clinicians and consumers. The company has two proprietary technology apps, Sail and TokeIn, that provide education to physicians and patients while also collecting data. Additionally, CB2 Insights has acquired a network of cannabis clinics across the US and Canada that offer education to consumers and practitioners.
CB2 Insights’ Clinics
At the forefront of CB2 Insight’s clinic strategy is Canna Care Docs, North America’s largest and longest-running cannabis evaluation and education centers. Canna Care Docs provides education for physicians and consumers about cannabis and allows patients to sign up for medical cannabis in Rhode Island, Massachusetts, Maine, Vermont, Connecticut, Delaware, Maryland, Illinois, Pennsylvania, New Jersey and the District of Columbia.
In total, CB2 Insights has 34 operational clinics in 13 US states. The clinics generate annual revenue of approximately $200 per patient and have an overall retention rate of 80 percent. In 2018, the clinics generated $11 million in revenue and have grown approximately 20 percent in top-line revenue and 130 percent in adjusted EBITDA since acquisition in December of 2017.
Moving forward, CB2 Insights intends to grow revenue to $20 million in 2019. New clinics are expected to add up to 42,000 patients annually that the company can collect data on, giving them a more robust look at the industry.
As part of its 2019 expansion strategy, CB2 Insights has acquired MedEval Clinic LLC, a multi-state cannabis clinic group with operations in Arizona and Colorado. MedEval recorded approximately C$1 million in revenue in 2018 with a profit margin of approximately 20 percent.
The company has also acquired a Colorado-based clinic, Rae of Sunshine Health Services LLC, doing business as Relaxed Clarity. Since the company’s inception in 2009, Relaxed Clarity has provided medical cannabis evaluations and educational support to over 15,000 patients each year. In 2018, the company recorded approximately C$1.1 million in revenue.
CB2 Insights’ proprietary technology
Sail is CB2 Insights’ proprietary technology platform that supports clinic operations and brings traditional healthcare protocols to the clinics. The platform bridges the gap between patients, healthcare practitioners and regulated suppliers in Canada and the US.
The real focus of Sail is to allow for uniform, clinically-validated data collection at the point-of-care. With tens of thousands of patient interactions each year, Sail is able to ensure that data-driven from clinical operations is able to be used for deep insights on patient trends, the efficacy of treatment, drug-to-drug interactions and other information currently missing from the cannabis industry today.
In addition to Sail, CB2 Insights acquired TokeIn in the summer of 2018, a customer loyalty platform that helps dispensaries increase revenue, boost foot traffic and build store loyalty. The platform has consumer data built into it to help target specific audiences with rewards programs and opt-in customized deals. This allows the company to track patient behavior from the evaluation process through to the purchase to effectively close the loop on data collection.
CB2 Insights licenses out its technology to clinics, suppliers and retailers, among other end-users, which generates a significant amount of revenue and facilitates the company’s entrance into other markets. CB2 Insights intends to integrate its technology platforms with artificial intelligence (AI) to give consumers, patients, retailers, suppliers and healthcare practitioners real-time information, analytics and data to ensure that all products are effective and needed.
The company is integrating its data collection technology with Premier Health Group’s (CSE:PHGI) electronic medical records (EMR) platform to create a medical cannabis-specific clinical decision support (CDS) tool. The tool is expected to help over 4,600 physicians and healthcare practitioners who use Premier Health’s Juno EMR platform that are looking to integrate medical cannabis into a patient’s treatment plan. In July 2019, CB2 Insights completed Phase One of its CDS tool integration and expects to roll the program out fully by Q3 2019.
In July 2019, CB2 Insights was selected as the exclusive technology platform by Drug Science, a leading independent scientific body on drugs in the UK that is working to provide evidence-based information on the safety and efficacy of medical cannabis. The company is expected to join Drug Science’s working group to create the UK’s only independent GDPR-compliant database of patient health data. The data collected is expected to be focused on assessing the health-related outcomes of patients once they have integrated cannabis into their traditional treatment regimes.
CB2 Insights’ proprietary technology has also been licensed to MyAccess Clinics, a wholly-owned subsidiary of Althea Group Holdings Ltd. (ASX:AGH), in the UK. According to Prohibition Partners, approximately 100 patients are thought to have successfully accessed medical cannabis since the country legalized medical cannabis in 2018. In order to increase access to the plant, lobbying groups have called for more clinical evidence to ease the restrictions on access to medical cannabis. CB2 Insights’ technology is the perfect solution for companies working to reduce restrictions and provide better patient care.
CROs are support systems that typically target the pharmaceutical industry that provide the preclinical, clinical research and trial management services required in the drug-approval process. CB2 Insights hopes to bridge the gap between clinically-based research and cannabis with its full-scale clinical trial management, design, monitoring and other research services.
“Research remains the primary gap between new government regulations and patient access – with physicians creating a major barrier due to a lack of understanding of how to prescribe and integrate cannabinoid therapy into traditional treatment programs,” said Sekar.
CB2 Insights has offered its services to a number of cannabis companies. Under its agreement with VIVO Cannabis Inc., an Ontario-based cannabis company recognized for its premium products and services, CB2 Insights plans to integrate its data collection technology into VIVO’s medical patient registry. The two companies can then develop a multi-phase research program aimed at validating the safety and efficacy of VIVO’s current products. As for the partnership with Colombian licensed producer FCM Global, the two companies plan to create market access for FCM Global’s cannabis products and design clinical trials to support the development of new cannabinoid-based products.
CB2 Insights has partnered with GL Brands through its US-based hemp brand and key operating subsidiary, Green Lotus, to begin a prospective trial that will assess the safety, efficacy and other health measures for patients using Green Lotus’ soft gel CBD capsules to treat anxiety. The companies will use the results to further the research and development of new Green Lotus products for new indications.
In January 2020, Licensed Producer Vireo Health International selected CB2 Insights to help advance its application with the US FDA to study the safety and efficacy of cannabis-based topical treatments for pain management. Vireo is a physician-founded, science-focused vertically integrated cannabis company focused on bringing medical science and engineering effective cannabis-based medicine. Under the agreement, CB2Insights will develop full protocols and manage the Investigational New Drug (IND) application on behalf of Vireo and will work with the FDA towards approvals. Vireo will also be licensing CB2 Insights’ Sail technology platform for full data collection. Vireo’s line of cannabis-based topical products is currently available in Minnesota and scheduled to launch in other markets in 2020.
CB2 Insights’ Management Team
Prad Sekar — CEO
As co-founder of CB2 Insights, Prad Sekar has spent over 15 years as an entrepreneur throughout the healthcare sector, from the clinical side through to innovation building. He has been involved in the opening of one of the most recognized cannabis education centers in Ontario and in consulting on major healthcare IT and service integrations.
Kash Qureshi — COO
As co-founder of CB2 Insights, Kash Qureshi brings over 20 years of experience in the healthcare, medical cannabis and technology space. As an ardent cost-efficiency executive, he has focused on promoting improved cash flow, operational proficiencies and overall profitability.
Carmelo Marrelli — CFO
Carmelo Marrelli is the principal of Marrelli Support Services Inc. He is also affiliated with DSA Corporate Services Inc., a firm providing corporate secretarial and regulatory filing services to the junior capitalist market in Canada. He has a Bachelor of Commerce degree from the University of Toronto.
Dan Thompson — CCO
Dan Thompson brings over 15 years of experience with high-growth public and private technology companies. He built and led the marketing divisions for early-stage companies in retail, travel and payment technology. He graduated from Michigan State University with degrees in marketing and communications.
Kishan Mahabir is a nephrologist, internist and medical cannabis expert. Dr. Mahabir is currently the Site Lead of Internal Medicine with William Osler Health System at Etobicoke General Hospital. He studied medicine at McMaster University, where he also completed his residency and fellowship.
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