A panel of industry leaders convened at ONRamp, a U of T-led accelerator, on May 30 to discuss the barriers and opportunities that entrepreneurs face in the highly regulated industries of health, finance, and cannabis technologies.
Greg Pantelic, founder of AHLOT, a cannabis curation company; John Soloninka, founder of health tech company Accelerant Health Innovations; and Teri Kirk, founder of investor-entrepreneur matching program Fundingportal, described their experiences in their respective fields and how they have navigated government regulations.
The event was organized by the Smith School of Business at Queen’s University in association with ONRamp. This was not the first time the two organizations had collaborated — Queen’s partnered with ONRamp in February to expand its entrepreneurs’ networking opportunities.
Breaking into the industry and changing with trends
Pantelic’s AHLOT is a cannabis circulation company that “created the world’s first multi-licensed producers’ sample pack and storage accessory product,” despite not being licensed vendors.
“Our vision was creating experience before and after consuming cannabis,” Pantelic said, citing the overwhelming choices of recreational cannabis available to consumers.
After seeing new sign-ups and subscriptions grow at 40 per cent week-over-week in 2017, Pantelic decided to run AHLOT on a full-time basis. The increasingly growing demand for recreational cannabis following the enactment of the federal Cannabis Act, coupled with the market inefficiency of cannabis sampling, led him to create the Cannabis Collection, a series of one-gram samples from different premium licensed producers.
According to Kirk, “one has to have a larger risk appetite and more capacity for innovation [when pursuing entrepreneurship] in heavily regulated space.” Kirk used Fundingportal as an example explaining the importance of measuring cost and benefit. For example, when matching entrepreneurs with investors, geographical costs and benefits differ between Canada and the US, so proximity is a useful measure for deciding which markets to become involved in.
Regulations and innovations
According to Pantelic, the highly regulated nature of the cannabis industry prompted AHLOT to work with licensed producers rather than wait to obtain its own production license. As its Cannabis Collection collects sample cannabis from different licensed partners, every regulation policy regarding the product is dealt with directly by AHLOTS’ partners.
Kirk highlighted the importance of understanding regulations before entering the marketplace, highlighting how her experience of being a lawyer helped her in this regard. She also pointed out that entering a heavily regulated industry like finance technology requires innovators to embrace larger risks than in traditional industries, especially since latent regulations create more opportunities for failure.
Soloninka seconded this perspective. He mentioned that a strong understanding of regulations would provide a competitive advantage for innovators.
“Fitting into regulation is really strategic for starting your own company,” he said. Apart from that, entrepreneurs should remember that regulatory approvals are mostly regional, which is critical when deciding where to start a business.
To solve this regional regulation issue, Soloninka provided two suggestions: first, working with a consulting company that specializes in global regulatory systems; and second, conducting research on the internet.
In the cannabis industry, data can be described as necessary but nascent. AHLOT is collecting its data by launching a cannabis circulation campaign, to hire people to provide feedback on recreational cannabis quality.
Kirk added that data allows entrepreneurs to understand the world around them despite it being “massively and heavily regulated.” As such, it may be important for entrepreneurs to take the costs of accessing data into account when making market-entering choices.