A.J. HerringtonThe man behind HempMeds discusses his company’s global expansion, his journey from the marijuana industry into the hemp industry and the truth behind the “hippies’ disappointment.”
by A.J. Herrington
THE SANTA FE DEPOT SITS at the edge of San Diego’s sunny downtown, near the shore, where the harbor is filled with sailboats. Built in 1915, San Diego’s train station is rumored to have been constructed with concrete containing hemp fiber. Its Mission Revival Style architecture is a stark contrast to the 20-story office building towering across the street. But it’s a fitting neighbor, considering the top-floor suite of the office building I’m in is the home of Medical Marijuana Inc., a company that is building its brands with in-
dustrial hemp.
I’m early for my meeting with company CEO Dr. Stuart Titus, so I enjoy the view across the bay to Coronado from the glass-walled conference room while I wait. We’ve met before, and recognition flashes in his eyes as he enters and greets me with a warm smile. I’m here to learn about the company and where it’s headed, directly from the man at the top.
HempMeds History
Early in our conversation, I asked Dr. Titus how he became involved in the business of cannabis as therapy — and how he found his way to the helm of one of the largest companies in the hemp industry. He explained that after 11 years as a bond trader and underwriter on Wall Street, he pursued a “180-degree transformation” in profession and began studying physical therapy and rehabilitation. After earning a doctorate in physiotherapy, he opened a clinic in North Carolina.
It didn’t take long for Dr. Titus to realize that many of the athletes he was treating were relying on a popular, but underground treatment. “I found by-and-large that all the contact [sport] players were using cannabis to control pain and inflammation and help with sleep,” he remembers. Intrigued, Dr. Titus followed his curiosity, attended a couple of medical marijuana symposiums and started his professional cannabis career. Personal experience would come later.
Although he had left Wall Street, Dr. Titus kept tabs on the financial markets, with an eye out for new investment opportunities. In 2001, Dr. Titus and a group of other investors acquired Medical Marijuana Inc., a company founded by former marijuana smuggler and self-styled “King of Pot” Bruce Perlowin. At the time, it was a two-year-old startup exploring ways to monetize the creeping legality of cannabis in California and other states. The company did some consulting work, and toyed with operating medical dispensaries and delivery services. But management decided that a publicly traded company ought not to handle a federally controlled substance, so new business models were sought out.
The company realized that, according to the 2004 case Hemp Industry Association v. DEA, the non-psychoactive parts of imported hemp seeds, stalks and stems were not subject to control under the Controlled Substances Act, and in 2011, Medical Marijuana Inc. launched their flagship subsidiary HempMeds, which sells therapeutic CBD oil derived from hemp.
By autumn of that year, the company’s first crop of CDB-rich hemp was being harvested in Europe, and export and import protocols were developed to transfer hemp extract paste to the United States. In 2012, HempMeds’ first product, a 25 mg CBD capsule, was ready for testing.
His Own Supply
About the same time, Dr. Titus contracted Lyme disease from a tick bite during a round of golf in North Carolina. The malady had a dramatic effect on his health. Restless leg syndrome left him unable to sleep through the night, exacerbating the problem. Months of progressive decline and nerve damage left him desperate. “If there was assisted suicide in
California, I would have hit that plunger on at least five, maybe six occasions.”
With HempMeds CBD capsules newly ready for market, Dr. Titus began a daily regimen of about 100 mg of cannabidiol daily. “Somehow, synergistically, I was in the right place at the right time,” he says.
The new therapy had a dramatically positive impact on his health and quality of life, he says. His body strengthened and regained its range of motion. The spasticity in his limbs calmed down. Forgetfulness was replaced by mental clarity. He’s now traveling the world, hiking and playing golf again, all while fulfilling his duties as a CEO.
“If there was assisted suicide in California, I would have hit that plunger on at least five, maybe six occasions.” – Dr. Stuart Titus
As we discuss the benefits of CBD that continue to be discovered and researched, it seems difficult to believe that not long ago, Dr. Titus had been experiencing frequent lapses of memory. His ability to recall details of medical studies including who conducted them, when and where they occurred, their findings and potential implications, is impressive.
Expanding Abroad
Dr. Titus, of course, isn’t the only person who has found relief with HempMeds formulations. As time went on and the product offerings increased, more and more people saw their health improve with CBD. The most dramatic examples have come from families with epileptic children. Parents, whose children have found no relief with medications from pharmaceutical companies, are desperate for a remedy for frequent and terrifying seizures.
One of those parents is Penny Howard of Texas. Her daughter Harper, who passed away in 2016, suffered from a rare genetic condition known as CDLK5 epilepsy. As the disease progressed, Harper suffered up to 40 seizures daily and was left incommunicative. Traditional medicines were ineffective.
After viewing Dr. Sanjay Gupta’s CNN special “Weed,” Howard decided to try medical marijuana with Harper. With research, she settled on HempMeds Real Scientific Hemp Oil (RSHO). In an article she wrote for the Huffington Post, Howard relates the profound effect RSHO had on Harper. “Within the first three days we had eye contact and verbalization sounds from her, an attempt to interact with us physically and she was now able to show us that she was with us mentally,” she wrote. “It wasn’t long before she went a day without a seizure! And then another day without a seizure!”
Howard channeled her excitement for Harper’s success into advocacy. She created a blog and Facebook page Hope for Harper, in order to connect with and support other families challenged by CDLK5. It didn’t take long for Brazilian Katiele Fischer, whose daughter Anny also suffered from the rare form of epilepsy, to take notice.
After learning of the Howards’ success with RSHO, Fischer asked relatives in the United States to order some from the HempMeds website, and then ship it to Brazil for Anny. Fearful that the package might be intercepted, the relatives hid the CBD oil in a stuffed animal, to increase the chance it would make it to its destination.
Just like Harper, Anny’s response to the RSHO was incredible. So, when a subsequent shipment of RSHO was confiscated by Brazilian customs, Fischer took legal action. Wisely, the Fischers had documented Anny’s progress, including her dramatic reduction in seizures. When the family sued Brazilian drug-regulating authority ANVISA, the court swiftly ruled that it would be “inhumane” to deny Anny access to RSHO. Other sick Brazilians have followed their precedent and the government now allows use of RSHO for more than a dozen medical conditions with a prescription and import permit.
The success of parents like Penny Howard and Katiele Fischer has begun to snowball internationally. When Raúl Elizalde of Mexico tried CBD hemp oil for his epileptic daughter Grace, she too responded amazingly well. He also sued the government for permission to procure RSHO. Working with regulation authority COFEPRIS, which was hesitant to approve a formulation with any THC, HempMeds created RSHO-X, a new formulation with no trace of the psychoactive cannabinoid. Other HempMeds products are produced with up to 0.3 percent THC, the legal limit for hemp-based products in the United States.
Raúl Elizalde is now the president of a new division of the Medical Marijuana Inc. corporate family, HempMeds Mexico, and his activism and passion continue. He recently traveled to Geneva, Switzerland to speak before a World Health Organization panel considering the future international regulation of CBD. He urged the body to allow CBD use as both a dietary supplement and as an ingredient in pharmaceuticals. In June, Mexican President Enrique Peña Nieto issued a decree legalizing medical marijuana — but only for cannabis with less than 1 percent THC.
As people in more and more countries call for access to cannabis therapies, Medical Marijuana Inc. is in the midst of global expansion. The direct sales division, Kannaway, will be launching its multi-level marketing model to Europe in 2018. In the United States, Kannaway has a sales force of about 15,000 independent “brand ambassadors” that offer a full line of CBD products including skin care by Cannabis Beauty Defined.
Forbes projects annual sales of products with CBD, once known as the “hippies’ disappointment” for its THC-mitigating effects, will hit a billion dollars by 2020.
Dr. Titus acknowledges that the international growth of HempMeds has its challenges. One of the most formidable barriers has been the differing regulatory climate encountered from country to country. For the expansion of Kannaway into Europe, for example, many of the company’s ingestible products will be required to complete a registration process that includes evidence of safety and efficacy. Next year’s launch will begin with skin care and topical treatments, which are subject to less stringent rules. More products will be added as the time-consuming and costly registration continues. “We can go as fast as our funding allows us to go,” Dr. Titus explained.
Past Controversies, Future Adjustments
The management of Medical Marijuana Inc. have expressed a firm commitment to compliance with the case law established by HIA v. DEA, which also poses challenges for the firm’s growth. Their CBD is currently sourced exclusively from stem, seed and stalk of hemp grown in seven European countries, extracted in Germany, and then exported to the United States as a thick, oily paste. The effect this costly process has on the retail price of the company’s offerings is evident when compared with the myriad of domestically grown hemp CBD products now available.
Dr. Titus says the 2014 Farm Bill only authorizes hemp agriculture for research purposes, and until commercial domestic farming is legalized, his corporation will continue to source CBD from European hemp. He believes despite the price disadvantage, the company can stay competitive by offering new and exclusive products, and investing in the research and development necessary to enter tightly regulated markets.
Competition and regulation haven’t been the only obstacles encountered by Medical Marijuana Inc. on its road to growth. In 2014, the advocacy non-profit Project CBD released a report entitled “Hemp Oil Hustlers” that included allegations of tainted product making people, including infants, violently ill. The article also contained assertions that some of its business practices appear to resemble tactics of a “pump and dump,” a financial scam popularized in the film The Wolf of Wall Street. The report went on to say that “Kannaway appears to be a pyramid scheme.”
When asked about the Project CBD report, which he characterized as “full of inaccuracies,” Dr. Titus said he couldn’t say much, citing a pending $100 million libel lawsuit against Project CBD and the author. However, he was able to address, in general terms, some of the topics raised. All Medical Marijuana Inc. products, he asserts, are tested for safety at three stages in the manufacturing process. As for Kannaway, Dr. Titus says that “we’re comfortable with our company meeting the definition of a non-pyramid.”
Dr. Titus also rejects claims of stock market shenanigans, pointing out that the major investors when the report came out three years ago are still shareholders. “With a pump and dump, of course, you have to have management selling shares. If management hasn’t sold shares, there’s no dump.”
Dr. Titus sees continued growth for the company in that future. Forbes projects annual sales of products with CBD, once known as the “hippies’ disappointment” for its THC-mitigating effects, will hit a billion dollars by 2020. Dr. Titus sees his corporation poised for expansion, even with an uncertain regulatory environment. If, as most in the cannabis industry expect, legalization continues to spread, Medical Marijuana Inc. sees opportunity in therapeutic THC products. But even if progress is rolled back and hemp is no longer a viable option, Dr. Titus points out that CBD can be obtained from other plants, including hops and flax.
Cannabinoid therapies, he assures me, are here to stay.
Originally published in HEMP’s Issue 2. SUBSCRIBE HERE.