POLAND: A STUDY IN MEDICAL CANNABIS IN EUROPE

A note from Bradley Moore, GCAC CEO:

Earlier this year, May 13, 2019, GCAC announced a Software License Agreement with Poland based Sequoya Cannabis.

The following article outlines that nature of the agreement and the goto market in Poland.

It highlights specifically the importance of the relationship between product providers, Sequoya, and pharmacies treating patients and how GCAC’s Citizen Green Technology is an integral part of the sales cycle. Interestingly Shoppers Drugmart announced a pilot program with TruTechnologies using their Seed 2 Sale tech and building a blockchain solution (which is what GCAC already built in 2017-2018).


This is an important announcement for GCAC for two reasons:

1) a high-profile retailer has stated they need this type of technology to conduct their medical cannabis business
2) Poland has a population of 37.9 million, with a massive €29.8 billion healthcare expenditure (Canada spends roughly CAD$28bn or approx. €18bn).


It’s important to note that Poland itself has 13,000 pharmacies and Sequoya has relationships with 5000 of those retailers, comparatively, Shoppers has 1,300 storefronts. Additionally, a footprint in Poland provides Sequoya and GCAC access to the more than €2.3 trillion total in the European Union.
We hope that the scope of this opportunity provides clarity on the importance of it for our vertical integration strategy.




Medical Marijuana in Poland

Currently, there is only one license held in Poland for the importation of Medical Marijuana.

As of June 13, 2019, 7 new applications have been submitted for importation of Medical Marijuana to Poland, but none of these companies have yet been able to build proper relationships with the pharmaceutical sector in Poland due in part to a lack of doctor, pharmacist and patient medical marijuana education and the relatively “new status” of cannabis being legalized for only 18 months.

Sequoya Europe sp. Zoo is in the process of application for a Medical Marijuana import license and launched an aggressive relationship building program based on Global Cannabis Applications Corporation’s (GCAC) Citizen Green Prescriptii client management software. Sequoya Cannabis has signed an exclusive licensing relationship with GCAC to expand the Prescriptii Patient-Care Solution throughout Poland. Sequoya will focus on growing relationships with pharmacy chains and retailers by offering their clients/patients a software-based system to track their experiences with Medical Marijuana, provide advice based on real-time information from other patients and professionals, and most importantly educate patients, practitioners and doctors as well as pharmacists.

Sequoya has identified an enormous gap in pharmacist and patient education regarding Medical Marijuana and believes the Prescriptii Patient-Care “Polish and English” system is a one-of-a-kind solution to offer within Poland. The pricing model sees pharmacies giving free 30-day trial period for their clients and adding a charge of $1.50 per client per month after the trial period. If the patient is prescribed “Sequoya branded cannabis”, there will be no charge for the use of the software. In order to aggressively penetrate the Medical Marijuana market in Poland, Sequoya will engage retailers and patients and create an invaluable relationship by supplying an online management solution and treatment process with Sequoya’s branded products.

The Prescriptii Patient-Care Solution

Sequoya has licensed an integrated solution that connects medical marijuana retailers with their customers. The Prescriptii Patient-Care Solution applications are used to register patients, collect information and provide a guide to their specific ailment and treatment journey. Using a proprietary Pain to Strain (trade market pending) machine learning engine, Prescriptii makes suitable product recommendations for each individual patient. These applications are highly adaptable for doctor and clinical research use.

Prescriptii Retail – a web-based application used by medical marijuana dispensaries and pharmacies. The desktop application runs on a computer or tablet through a web browser.

Key Features:

  • Pain to Strain product recommendations for patients
  • Insights on side effects, efficacy & patient behavior
  • Business and marketing intelligence and instruments
  • Secure eWallet for CGC-loyalty coins transactions
  • Allows invitation and onboarding of patients
  • Manage Rewards Coins distribution for promotions
  • Manage roles and permissions

Prescriptii Patient – a Mobile application which is simple to use and designed to allow users to track the progress of their medical cannabis journey, obtain personal cannabis product recommendations and manage loyalty rewards.

Key Features:

  • Track all stats regarding cannabis consumption
  • Native IOS and Android apps
  • Handshake mechanism with the Retail App
  • Manage acquired products
  • Product Wishlist
  • Secure eWallet for CGC-loyalty coins software components
  • Mobile application: Flutter 1.2
  • Web application: React.js
  • Backend: Amazon Serverless and Node.js

GCAC uses AI technologies across all its platform, with an unmanaged and unstructured approach, meaning processes happen without any human logic interference.

In Phase One, the algorithm automatically creates sets of data clusters. In Phase Two, the AI is using a neural network algorithm to create decision trees for establishing product-symptom efficacy ratings.

Main AI Modules:

  • Pain to Strain – matching patient symptoms to cannabis products and strains according to the retailers’ products available
  • Data Scorecard – each data point in the system is scored dynamically and the data contributor is being compensated accordingly
  • Dispensary Inventory Predication – prediction according to past sales
  • Dispensary Sales Combos – prediction according to the user dynamic profiling
  • Dispensary Symptoms Breakdown – matching the current treated symptoms against the global symptom perspective
  • Seed2Seed – assigning usage results per product UPC which can then be integrated with a Licensed Producer’s Seed to Sale solution for a complete data feedback
  • Prescriptii RX (in process) – onboarding patient doctors/clinical trial dynamic questionnaire

Retails Desktop and Patient Mobile Apps:

Reaching the Polish Goals of Modern Day Pharmacists and Medical Marijuana Distribution

In every health system, pharmacotherapy constitutes a basic therapeutic method that is presently advocated by physicians and other members of the medical profession. However, it is the pharmacist that possesses the most complex knowledge of the medication effect mechanism and its activity in the organism and the factors which ensure its quality and stability in the environment in which it is applied. Modern society expects pharmacists to be more involved in monitoring and supervising pharmacotherapy. International documents clearly define pharmacists as guardians of the safety and effectiveness of pharmacotherapy, not coincidentally putting safety matters first.

In today’s era of specialized physicians, there is a strong need for a greater role to be played by pharmacists, whose knowledge covers many aspects connected with pharmacodynamics, pharmacokinetics and physicochemical medication properties in all medications influencing the therapeutic process.

The significant and exceptionally fast changes that are currently taking place in pharmaceutical sciences indicate that the role of pharmacists is no longer limited to the distribution of medicinal products, but also includes enabling members of society to fully take advantage of the achievements of modern pharmacy.

Pharmacists offer a service to patients and advice to physicians and other members of the medical profession, so they must be considered a full member of the health team, contributing their unique knowledge of active substances and medicinal products. With regard to the above, the National Section of Pharmaceutical Care of the Polish Pharmaceutical Society presents its own proposal for the development of modern pharmaceutical practice in Poland. The purpose of the proposed actions is to increase the involvement of pharmacists from community pharmacies in ensuring the safety and effectiveness of pharmacotherapy applied outside of hospitals and improving indicators of society’s health over the next ten to twenty years.

Through a partnership with GCAC, Sequoya presents an ideal environment for patient and pharmacist care in alignment with the ‘PROSPECTS FOR DEVELOPMENT OF PHARMACY IN POLAND UNTIL THE YEAR 2030. THE DOCUMENT OF THE NATIONAL SECTION OF PHARMACEUTICAL CARE OF THE POLISH PHARMACEUTICAL SOCIETY’.

Medication Reviews

A medication review (MR) is a task that requires the professional competencies of a pharmacist in order to be undertaken. It is performed on the basis of data collected from a patient and constitutes grounds for assessing the correctness of an ill person’s medication use. It consists of the following stages:

(a) conducting a patient interview,

(b) analyzing information collected from the patient,

(c) preparing a report for a physician,

(d) preparing a report for the patient,

(e) establishing a program of correct medication use.

Table 1 documents the purpose of each stage accompanied by a description of the relevant procedure:

http://ptfarm.pl/pub/File/Acta_Poloniae/2016/255.pdf

The Advantages of Sequoya Cannabis for the Pharmacy Market in Poland

The pharmacy market has reached 33bn PLN in 2017 (US$8 billion), 4% more than in 2016 (in patient/consumer sale prices). This growth was smaller than 6,2% observed between 2015 and 2016, but it still can be considered high. Pharmacies had sold 425m units of drugs to patients, 0,6% more than in 2016. Our research has shown that partnering with pharmacy chains as one of the more profitable modes of operation, whereby chain stores have shown to service double the number of customers and generate double the number of sales across the board when compared to the sales figures of independent pharmacies.

By utilizing GCAC’s Prescriptii technology, Sequoya can empower many of the independent pharmacies with knowledge and technology that isn’t readily available to them. The average pharmacist works on a 25.2% margin, medical marijuana sold at a wholesale price of 12.5 euro per gram can be sold for as high as 18-25 euro per gram, allowing for a 31-50% margin on the product sold within the store. In addition “predictive” usage and ordering systems built into the Prescriptii software will allow store’s management to better calculate inventory, future orders and revenue growth in advance.

The Polish pharmacy distribution market is very important for all product offerings within the marijuana and CBD space. Food supplements delivered through pharmacies in 2017 reached 3.8 bn PLN ($US1 billion), over 205 million units of this type of product, and cosmetics segment sold over 1.2 bn PLN, with 58.5 million units sold. The entry of CBD related products for supplements, food, and cosmetics that would be available through pharmacies posses an additional high-margin product offering to increase the pharmacy market viability and competitiveness.

In 2017 an average pharmacy served over 43 000 patients/consumers. The average value of patient’s transaction was 38 PLN (the average Payer amount of over 13 PLN needs to be added to this). Despite the turnover being larger than last year, there was no growth in profitability. Inflation appeared and pharmacy margins continue to erode. Medical Marijuana and CBD products offer a high-margin, which is in demand, marketable, and only available through the pharmacy chains and independent stores.

The pharmacy margin (in purchasing price) in 2017 was 25,2%, 0,9 percentage points less than in 2016. The largest fall in margin occurred in non-reimbursed Rx drugs. The average margin in this segment was 24,8%, 1,9% less than in the year before. The margin for over the counter products (all non-Rx products) has also fallen, but to a lesser degree – it was 29,5% in 2017, 1,3% less than in the previous year. The margin for reimbursed Rx drugs fell by a similar amount (1,2%) as for OTC products. In 2017 it was 18,5%.

Enabling educational tools around medical marijuana for pharmacists to best advise patients and physicians is vital to the increased uptake into the marketplace. An estimated 65% of prescriptions were written by primary care physicians, general practitioners and internal medicine physicians. Approximately 9% of all sold Rx drugs were preparations from the so-called “S” list, issued free of charge to persons 75 years of age or older. In the segment of Rx drugs, the best volume sales results were reached by products containing bisoprolol, ramipril and medphormin. Analysis of value sales results provides us with a different picture – from this perspective dominant where drugs with the following active ingredients: rivaroxabanum, enoxaparinum and atorvastatinum. The five categories with the best results in OTC sales by volume (according to PEX PharmaSequence methodology) were: colds, digestive track and metabolism, vitamins/minerals/tonics, painkillers and dermatological products. In terms of sales value, the dominant categories were: colds, vitamins/minerals/tonics, digestive track and metabolism, cosmetics and painkillers. Medical marijuana and CBD based products cover clearly the painkiller market, as well as colds, tonics, digestive track and metabolism. Hemp and marijuana based cosmetics and dermatological products also are viable for the Polish pharmacy chains. The importance of building the relationships with pharmacies is vital for the Sequoya Cannabis importation of medical marijuana, as well as the potential long term downstream revenue of delivering other CBD based products to an active audience as a distribution partner of CBD products that meet the dominant categories in sales value for the pharmacy itself.

Despite strong regulation of the pharmaceutical market, the laws of economics still stand: the condition for market success is the profitability of business. Because of the continuing erosion of margins both private pharmacies and chains are looking to strengthen their negotiating power and find alternative high-margin products. In order to purchase for less, they need to purchase more as such the “economy of scale” effect is easier to obtain for larger organizations. In the context of AdA, an increase in auctioning power can be reached through franchise development and pharmacies creating buying groups, which might be more formalized and stable than previously thought. Prices can vary regionally – where competitive pressure is more significant, the price for the patient can still be the main draw increasing the number of patients in a pharmacy. In other regions, where competitive pressure is less significant, other factors drawing patients to a pharmacy, such as client service quality or stock will gain in importance.

Inventory management and predictive usage analytics supplied by Sequoya Cannabis through the Citizen Green Prescriptii solution will assist main and independent pharmacy chains in attracting more patients into pharmacies, with properly stocked medicinal marijuana products, at higher margins than alternative medications, in a manner that supports the entire value chain of the industry from practitioner, to pharmacy, to patient with the required reports to validate the evolution of client care in medical marijuana in Poland.

Sequoya Cannabis will become an integral part of the pharmaceutical industry establishing far reaching relationships and delivering high quality products and services delivered as a Pharmaceutical Society standard. (https://www.pexps.pl/files/upload/files/enPEX_Raport2017_BGO.pdf)

Similar to Sequoya’s goal to be considered a top quality, EU GMP certified supplier of CBD isolate, a strong relationship and sincere approach to servicing pharmacies with medical marijuana as the best of breed approach for pharmacists, meeting and or exceeding their standard of care, is in alignment with the development goals for Pharmacies in Poland by 2030.

Expanding Sequoya’s Reach?

Sequoya Cannabis Ltd, has been in discussions with the two largest Pharma marketing and supply companies, of which one of the companies has expressed interest in the market for medical marijuana products and client software with access to over 5,000 pharmacies.

 

Other potential targets include, Prima Pharmacy Group (GAP), a large Polish pharmacy network established by independent entrepreneurs in 2006 by opening three pharmacies in Wielkopolska and one in Lower Silesia. With over 150 pharmacies running within GAP and located in 14 provinces, it is among the top five groups in terms of the number of pharmacies within a network according to reports by IMS POLSKA.

 

  1. Distributors and wholesalers

 

NEUCA GROUP NEUCA is a market leader in pharmaceutical wholesale

to pharmacies.

The company market share reached 30.5% at the end of 2011.

Works with over 10 000 pharmacies each day.

Neuca Group is headquartered in Toruń with over 4 000 employees.

 

First quarter of 2013: 32 million zloty profit.

 

 

 

 

PGF – HURT PGF- Hurt has more than 20% of the Polish pharmaceutical market.

Part of Pelion Healthcare Group.

Provides up to 9 000 pharmacies.

Headquartered in Łódź.

The biggest pharmacy chain “Dbam o zdrowie” (I take care of health) belongs

to them. (more than 2000 pharmacies)

60 sales representatives, mainly telemarketing.

They offer marketing support. Information in English:

http://www.pgf-hurt.com.pl/en/about-company/who-we-are/marketing/

First quarter of 2013: 35 million zloty profit (Pelion).

 

 

 

FARMACOL S.A. The big pharmaceutical chain “Apteki z sercem” (Pharmacies with heart)

belongs to them.

Since 1999 the company’s shares are registered at the Warsaw Stock

Exchange.

During 1999 – 2002 the corporation purchased majority of Cefarm shares:

Kielce, Wrocław, Szczecin, Warszawa and some shares of the smaller entities

of pharmaceutical wholesalers, forming the Capital Group.

Headquartered in Katowice.

First quarter of 2013: 30, 5 million zloty profit.

 

 

 

 

 

 

 

 

  1. Pharmacy chains

 

DBAM O ZDROWIE More than 2020 pharmacies in each region of Poland.

They are the part of Pelion Healthcare Group like one of the biggest

distributors PGF-Hurt which they cooperate with.

They have also shopping web platform doz.pl (more information below).

 

 

 

APTEKA Z SERCEM About 1800 pharmacies in each region of Poland.

They are the part of Farmacol Group.

ŚWIAT ZDROWIA About 1700 pharmacies in each region of Poland.

 

Smaller chains which are located in cities, mostly in Warsaw.

  • MAX – almost 70 pharmacies
  • EURO APTEKA (Euro Pharmacy) – more than 60 pharmacies
  • ZIKO – more than 30 pharmacies and also I-pharmacy
  • APTEKA COSMEDICA (Cosmedica Pharmacy) – more than 20 pharmacies and includes a wide range of cosmetics.

 

  1. I- pharmacies

 

DOZ.PL The doz.pl is web platform which is a part of the biggest pharmaceutical

chain in Poland Dbam o zdrowie (I take care of health).

Platform offers a wide range of products including prescription drugs, which are cheaper than in traditional pharmacy. Ordered products arecollected in one of the pharmacies. Orders are not sent by courier.

Publish medical advices and information using their own internal promotion department.

Headquartered in Warsaw.

According Adplanner research: more than 1, 3 million

unique users each month.

 

 

DOMZDROWIA.PL Web platform offer the widest range of products including medical products, cosmetics,

medical devices, even perfume.

Orders sent by courier.

Offer promotion (also PR) and legal support.

According Alexy: more than 650 000 unique users each month.

Own others sales platforms and websites with medical

information: domzdrowia.pl, fabrykazdrowia.pl, pretty.pl, dbamyoceny.pl,

101promocji.pl, sexizdrowie.pl.

Headquartered near Kraków.

 

 

 

 

  1. Drugstore chains

 

ROSSMANN The largest drugstore chain in Poland. More than 700 stores across Poland. Rossmann Polska is the part of the German company Rossmann GmbH and A.S.

Watson group, which has more than 10 000 drugstores in 33 countries

of Europe and Asia.

 

Market share more than 20% (chemical and cosmetic industry).

Headquartered in Łódź.

54% of participants in the PMR survey declared that they are making

theirs cosmetics shopping in Rossmann.

 

 

 

HEBE DRUGSTORE Hebe was established in 2011 and is owned by Jeronimo Martins Poland- the proprietor

of the biggest discount chain in Poland Biedronka.

Consists of 44 stores many of which are located in Warsaw.

Hebe drugstores have such sectors as: Beauty Expert, hebe Hair,

DermoPharm, Home&Life, hebeMen, hebe loves babies.

Headquartered in Warsaw.

SUPER-PHARM POLAND Polish branch of worldwide company (in Europe and Asia known

as Super-Pharm and in America as Shoppers Drug Market).

In Poland since 2001.

Includes 40 pharmacy and drugstores (each store is divided into that two parts). Stores located in big cities, mostly in shopping

centers.

Headquartered in Warsaw.

 

 

DROGERIE NATURA Polish drugstore chain which was founded in 1997.

Chain consists of more than 270 stores located both in big and smaller cities.

Not in shopping centers.

Their private distributor is Polbita Sp. z o.o. is located in Błoń,

near Warsaw.

 

 

DROGERIE POLSKIE Chain founded in 2010.

Associates more than 200 pharmacies, which keep their own names.

Stores located only in some regions of Poland, many of them in small cities.

DOUGLAS Douglas is a German chain of perfumeries with 105 locations across Poland.
SEPHORA Sephora is a French brand and chain of cosmetics stores with 93 stores in Poland. Features more than 200 brands, along with its own private label including makeup, skincare, body, fragrance, nail color, and haircare. Sephora reached Poland in 1999. The first perfumery was founded in Bydgoszcz.
SEKRET URODY Sekret Urody (Beauty secret) is a chain of 170 Polish drugstores that was founded in 2010.
DROGERIE JASMIN More than 300 stores located across Poland.

Includes small drugstores of 30m2 size to large stores.

DROGERIE VICA Dariusz Tomczak, CEO, founded the company under the name Vica in 2004. Today, it has 32 stores located in the western and southern Poland.
DAYLI Stores DAYLI are located in both large cities and small towns across Poland and their number is constantly growing. On an average area of 200 square meters customers have access to more than 200,000 articles and 42 types of services.
JAWA DROGERIE Chain of 600 stores with expansion plans for an additional 400 location. Its turnover is more than 140 million zl per year.

 

 

DOZ S.A. manages Poland’s largest chain of modern pharmacies, operating under the brand of DOZ Apteki dbam o zdrowie, consisting of nearly 900 outlets across Poland. This gives the chain of DOZ Apteki dbam o zdrowie pharmacies the unquestioned leading position on the Polish market. In line with the motto ‘Patient is the Centre of Attention’, DOZ Apteki dbam o zdrowie pharmacies build their sustainable competitive advantage in the market based on top-quality customer service and professional pharmaceutical care, attractive prices, a wide product mix, and full availability of pharmaceutical drugs.

 

The company also operates www.doz.pl, the largest Polish website dedicated to health and a healthy lifestyle, with an online pharmacy functionality. Patients can choose from more than 20,000 products, the widest selection in the market. The website is unique in that it combines online sales with a country wide network of off-line pharmacies. This solution allows customers to collect any product ordered via www.doz.pl in any DOZ Apteki dbam o zdrowie pharmacy with no additional shipping fees. Every month www.doz.pl is visited by several million people. In 2015, two beauty e-stores were also launched: drogerienatura.pl and dozdrogeria.pl.

 

Drogerie Natura is one of the largest chains in the Polish cosmetics market. For over 20 years they have been meeting the customers’ expectations, constantly adjusting the offer to their needs. Among the products available in their stores you can find a wide range of leading brands and exclusive cosmetics. Currently, Drogerie Natura has approximately 280 stores located throughout the country and has one of the biggest online drugstore in Poland: www.drogerienatura.pl.

 

With over 48,000 patients per pharmacy per annum and an average of 400,000 total treatments in Poland that can utilize medical marijuana for illnesses, the pharmacy chancel is one of the more direct and profitable routes to market for wholesale medical marijuana sales in Poland.

Sequoya’s marketing and sales strategy is to engage the pharmacies with the Prescriptii software in the 6 months prior to achieving a license, assisting in both integration and education of medical marijuana into the chains. GCAC has agreed to pay for a single person resource to work with Sequoya on behalf of the partnership. The GCAC support staff will assist in integrating the software, while the Pharmacy Sales team will prepare the individual and chain pharmacies to order product in the near future. Minimal revenues and sales are expected within the first 6 months of integration and implementation, however, at least one patient per pharmacy can be expected as part of the roll-out of software and medications. In addition, by rolling out the software first, Sequoya Cannabis will have the volumes and numbers related to usage and ordering in many of the Pharmacies, giving Sequoya competitive and predictive knowledge of shortfall in stock, and the opportunities available to provide medical marijuana and product related services.