Anglo-Israeli cannabis healthcare company CiiTECH has built an international reputation with its market leading cannabidiol brands and range of pharmacy trusted CBD oil tinctures and cosmetics.
Founded by CEO Clifton Flack in 2017 following a 25 year career in marketing, CiiTECH uses its own FMCG (fast-moving consumer goods) expertise to serve its expanding markets in the UK, much of Europe, Brazil and most recently South Africa, with its growing range of high-quality, research-led products.
More than 90% of the firm’s sales come from the UK retail market with its flagship brand Provacan leading the way.
CiiTECH’s other trusted CBD brands include IMPACT, aimed at sports enthusiasts, and HuGG, a self-care range of skincare products.
In the New Year, CiiTECH is set to make its long-awaited move into the medical cannabis market with a line of Provacan THC products in collaboration with Israeli-based Cannassure. The first Provacan THC oil will be available exclusively to Israeli patients, but is expected to be unveiled in the UK later in 2022.
The THC debut will coincide with CiiTECH’s launch on the London Stock Exchange after completing a £2.1m capital raise in July through a reverse takeover which saw LSE’s Fragrant Prosperity Holdings agree to acquire the company.
With revenues over £7m to date since 2017, Flack describes CiiTECH as the “grown-up in the room” in what is a burgeoning market with one country after another moving to either legalise or relax their laws on cannabis as attitudes towards the drug soften.
With the industry continuing to grow, CiiTECH is investing profits on research-led product development, and has established a joint venture with Yisum, the Hebrew University of Jerusalem, led by Professor Yossi Tam, to study cannabis in targeting non-alcoholic fatty liver disease (NAFLD), obesity and metabolic complications.
CiiTECH is also the proud sponsors of Tel-Aviv Heat – the first professional Israeli rugby union team that competes in the Rugby Europe Super Cup Eastern Conference competition – which is seen as a strategic move for the company that gives direct access to the players to better understand the recovery demands of such a high impact sport.
Speaking exclusively to Cannabis Europa, Flack explains what makes his company different, what the future holds as the UK-Israeli operation prepares to make its LSE and THC market entrance, and the part rugby plays in the game plan.
CE: It’s been a busy year for CiiTECH, hopefully concluding with your London Stock Market listing. Can you set the scene for us pre-January 2021?
CF: At the beginning of this year we were a CBD wellness company based out of Israel but with our core consumer market in the UK. That is how I built the business, as I live in Israel, so have access to all the amazing Israeli science and the oldest state approved medical cannabis programme.
Ironically, even though I live in Israel, I have chosen not to operate in the cannabis sector here but to work in the wellness sector in the UK. I did that because it is very difficult to make money off THC (the main psychoactive compound in cannabis that produces the high sensation). It was when I founded CiiTECH in 2017, and four years on it still is.
But I have always felt strongly that the industry will soon become a consumer brand led market.
My background is in marketing and I knew from the start that CiiTECH needed to build brands. Brands were being neglected because THC companies were focusing on their cultivation, genetics and extraction, all that cool stuff that enables you to raise money and do some good things, but without an identifying label.
I took a view that I would move my full process to a country where we could build reputable CBD brands that are perceived as if they are medical cannabis, and develop that market share and brand awareness to a point that when THC became commercially viable we could add it into our range, either as a new brand or attached to an existing.
And that place was the UK.
That is where we were until 12 months ago, building on nearly four years of developing those brands, our market share, generating over £7m revenue with almost zero investment, and treating the industry as if it is normal.
Normalisation is where we all need to be aiming for. If you treat it as normal today then the decisions you make in the present will enable you to make money now and set strong foundations for building a business for the future.
We have continued to invest in clinical studies and to produce white papers, we have developed a pharmacy education course and partnered with doctors and nurses. We do all the things that THC companies do, but we do it for CBD as it lends credibility to our brands.
CE: So tell us what’s been driving CiiTECH’s growth in the past year.
CF: We got to the end of 2020 and felt the time was right to raise some money and grow the business. We began some operations in Brazil with a partner who has a platform that has enabled us to have Provacan prescribed as a medicine and dispensed under the country’s compassionate use law. We have fulfilled over 1,000 prescriptions to Brazil and see that as a growth market.
We have moved into South Africa. Because of my marketing background I tend to look to those countries that other companies aren’t. No-one five years ago thought there was anything to do in the UK, but I saw there was, and it’s been the same with Brazil and South Africa.
At the beginning of this year we began talking to investors, and then the likes of Kanabo and MGC Pharma suddenly hit market and everything changed. We were approached by an investment banker who said he had a shell that was ready and primed for an RTO and could raise us capital to make it happen.
So we took the opportunity. It’s been a long process, but we are now very close.
In the belief that we are on an expedited pathway to growth we began working on adding THC to our portfolio. We started building a team in South Africa too and readying ourselves for life as a public company with additional funds.
CE: Tell us about CiiTECH’s imminent THC launch.
CF: We have just announced our partnership with Israeli company Cannassure to produce out first THC. That will be distributed as medical cannabis in Israel. We have done it in the same way as we have with CBD – we source strong partners to produce our products whilst we focus on building consumer demand.
It has taken nearly five years to explain to people that this logic can work, that you don’t need to spend millions of pounds and years applying for licenses and building facilities in the hope that at some point you will have all the pieces in place to produce a product you can sell.
I took a view that in a normal industry if you are building a brand and have a route to market, you go and find a contract manufacturer.
This year has been very interesting for cannabis companies like ourselves. Due to Covid the THC market didn’t grow as many companies thought it would, and as their funds began to run out they began to see there was an opportunity. I call it convergence.
It is where THC companies have spent years refining, defining and optimising their cultivation and extraction, got to the point where they have an amazing product, but they don’t have the brands to sell.
What we have done is come at it from the other side. We have spent five years building the awareness of who we are and the credibility behind our brands, such that now we can take the best of what we have done and the trust that people have in CiiTECH, and take the best of the cultivators and extractors that we can find, and come together and produce the best and most trusted product on the market.
CE: Why are you marketing the THC under the Provacan brand?
CF: Because Provacan is a pharmacy trusted brand. It is made to look like something a doctor would prescribe and a pharmacist would dispense. It is the right brand and also the most well-known. We will subsequently launch other THC brands, or introduce it into our other marques, but we are beginning with Provacan and will see where we go from there.
CE: What will the launch of a THC product do for CiiTECH?
CF: A few things. As far as investors are concerned it will hopefully help to validate our valuation, certainly once we are listed. It is deeper than that, however. For us it promotes the idea of convergence, of THC and CBD coming together and helping each other. We are one of the first CBD companies to converge with THC.
Right now our CBD brands are far better known globally than THC ones, and not many old school mainstream brands are yet to launch CBD products.
Brands from companies such as L’Oreal are not solely dedicated to CBD but rather have a small range that may have a bit of CBD, or rather hemp seed oil in it, and are not focused on the full potential of CBD as a start ingredient.
If the consumer wants to buy a CBD product they are going to have to make an educated decision on which brand to buy over what they believe will be best for them.
If you are buying CBD because you have something you think you can treat with it, it is a healthcare product. Who are you going to trust? A CBD brand that you might not have heard of or a CBD brand you have heard of and is also now being prescribed in the THC world. The THC will add credibility to the CBD and vice versa people will buy our THC because it is a viable and recognisable CBD brand.
CE: What would you say to any investors looking to put their money into CiiTECH? Many people are still nervous about investing in the cannabis sector.
CF: Firstly, we like to think we are the grown-ups in the room. We are not your typical youthful entrepreneur management team that think you can just raise money and sell something in the future. We have been through the school of hard knocks in our careers.
The second reason is there are not that many cannabis healthcare companies out there who have been generating revenues for the amount of time we have. We have sales now and we are looking to increase our sales tomorrow. We are an FMCG company. There are not many cannabis companies that would proudly call themselves FMCG.
CE: You’ve recently changed CiiTECH’s company slogan. Why?
CF: THC is the big one and that has inspired us to change our company catchphrase from ‘inspired by science’ to ‘cannabis healthcare’. That is what CiiTECH is, cannabis healthcare, which is basically anything aside from recreational use.
We are involved in cannabis clinical studies, CBD wellness, CBD cosmetics and medical cannabis, we have done clinical studies with a pharmaceutical pathway, and we are looking at a number of opportunities with medical devices and different delivery mechanisms for cannabis products.
CE: What is the thinking behind sponsoring the Tel Aviv Heat Rugby Club?
CF: It came about a few years ago. Ben Franks, who is a New Zealand Rugby World Cup winner, reached out to tell us how amazing our products are. What drew me in was the story of what he used it for – sleep. Not pain. Not recovery. Sleep.
We began working with him and he introduced us to James Haskell, who at the time was England captain. We had already begun working on IMPACT, our sports brand, and if you’re developing any sports pain relief or recovery product, if it works on rugby players then it’s going to work on anyone.
I began looking for a marketing opportunity to reinforce our sports brand and the opening with Tel Aviv Heat came up. Israel is a fledgling rugby nation, but the country is very ambitious, just like CiiTECH is.
It helps with the branding in the UK and with South Africa. Half the team are South African. Nic Groom, Heat’s captain, is like David Beckham in South Africa. He is a household name and our brand ambassador there. Gabriel Ibitoye is Heat’s British sensation, to name a few. It is very exciting and makes perfect business sense.