Cannabis Crowdfunding Play Sees CDA Clinics Raking in the Green

While Australians are becoming increasingly enamoured with medicinal marijuana, some people are still not convinced.

Patients have reported seeing local healthcare professional's express reluctance about the medical use of cannabis, with many refusing to consider it as a treatment option.

The historical stigma surrounding the drug even extends to the banking sector, which can make it challenging for cannabis companies to acquire funding from traditional financial institutions.

One business that's found a novel way around this issue is a thriving Queensland-based cannabis clinic network known as CDA Clinics.

CDA have already established cannabis clinics in Brisbane, Sydney, Melbourne and Miami, and also own a wholesale import business known as Burleigh Cannabis. The company claims that business is booming, and despite only opening their door in October last year the clinics currently have over 700 regular patients on the books, along with a six-week waiting list for future consultations.

Presently, the company is in the middle of an expansion period that will see manufacturing capabilities added to their Gold Coast clinic. The owners of CDA—which stands for Cannabis Doctors Australia—say that they decided to pursue crowdfunding after the lukewarm attitude of local lenders made it difficult to secure funding for the site.

According to the company's director of operations, Guy Headly, Australian financial institutions are still largely uninterested in supporting such ventures, despite the fact that the global marijuana market is expected to reach over $146.4 billion in value by 2025.

"Banks in Australia are behind on the shift towards medicinal cannabis and there is still a lot of stigma there," Headly said.

"We found it quite challenging when dealing with traditional financial institutions despite being part of the medical profession."

"Medicinal cannabis has been in the country for three years and has helped thousands across Australia, but many banks are unwilling to be part of it," he said.

 

Blazing a Trail

Surprisingly, the CDA Clinics crowdfunding campaign is actually the first of its kind. Although other cannabis companies have flirted with the idea crowdfunding in the past, few have elected to directly fund such an ambitious project with it, preferring instead to rely on private investment or public offering.

In 2016 the American cannabis company Med-X attempted to secure equity crowdfunding to bankroll the development of new products—and expansion of their existing product lines—however by September they had been issued a temporary halt by the SEC and had their offering suspended.

The Baking Supply Co also launched a 40-day campaign in 2017 to bring its line of cannabis infused meal boxes to the market through the crowdfunding website Indiegogo. The campaign ultimately ended up being a success, and the company managed to raise $33,351 from donations by 188 different backers.

Similarly, CDA Clinics have already been able to raise hundreds of thousands of dollars in funding thanks to strong support from its' patient base. CDA's director of operations, Guy Headly, attributed the crowdfunding campaign's success to a shared vision for community-focused healthcare.

"What we saw was patients and doctors coming to us asking how they could get involved in this. We are a small doctor-led company and wanted to be a point of difference to big pharma," he said.

"We want to retain this focus by being community owned and not be held to account by large investors chasing short-term returns."

Squeamish financial institutions aren't the only hurdle that CDA is looking to overcome, as certain legal restrictions are also preventing the company from further expanding its' reach.

"We are restricted and cannot advertise products, can't advertise on Facebook and Google because they are US based so there are still challenges," Headly said.

 

Give and Toke

The money raised by CDA Clinics' crowdfunding efforts will be used to fund the construction of a second cannabis clinic in Nerang, as well as the eventual cultivation of medicinal marijuana in its' Burleigh warehouse space.

The managing director of CDA, Dr Matua Jansen, was bullish about the company's chances, citing new data which shows that the clinic was responsible for 28 percent of total patient approvals from the TGA over the last four months.

"There have been 700 patient approvals on the Coast since we opened and since medicinal cannabis was legalised there have been 3500 in Australia," Jansen said.

"We see Gold Coast patients aged from seven to 97. More often than not it is middle-aged patients that come to us with things like chronic pain, anxiety and PTSD."

 

 

Dr Jansen also expressed disappointment over the negative attitude that many still maintain towards medicinal cannabis, particularly when it has been found to be considerably less dangerous than numerous opioids.

"Australia is seeing a huge opioid epidemic due to overuse of prescriptions and yet alternative treatments are still judged heavily."

"It is our mission to show the medical community this safe alternative and treat patients in need," he said.

Although the idea may be relatively unprecedented, CDA Clinics' passionate patient base suggests that the company's attempt at crowdfunding may ultimately prove successful.

What remains to be seen is whether or not the rest of the industry will follow suit.

Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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