Althea chief executive Josh Fegan has delivered a withering assessment of some industry players as he stressed the importance of growing a sustainable cannabis sector “in the right way”.
In the first part of a wide-ranging interview with Cannabiz, Fegan said the behaviour and strategies of some medicinal cannabis firms was undermining the sector and bordering on “crazy”.
While declaring that sales and marketing will “make or break” the industry, there is an ethical way and a wrong way to go about it, he said.
“You have to understand that this is a really serious product. This is a medicine and you have to act ethically and know the regulations back to front,” Fegan said. “There are no shortcuts, but there are a lot of people doing the wrong things.
“It sucks when you get people coming in and doing bad things in terms of advertising products and pricing, and product specification. You can’t advertise a licensed prescription medicine, let alone an unlicensed medicine, a controlled drug. It’s crazy.
“I think you’ll find out pretty quickly that there’s no room for bad actors. They’ll either get it wrong and go under or eventually the TGA will shut them down. I think half of these operators are just a house of cards waiting to fall over.”
Speaking after Althea reported a doubling of revenue in FY21 to $11.5m — but with losses of $15m — Fegan said he understood the pressure companies are under to “put runs on the board”. But that does not excuse the tactics adopted by some, he insisted.
“A lot of investment has gone into the market and the last two years have been tough because of Covid. I don’t know what the opportunity cost has been, but it’s significant, so we have all been under pressure,” he said. “But there’s still a right way to do things and, if we want the credibility this drug deserves, we all have to act in the right way.”