Sep 06 2017 . 13 min read
Reno couple’s game-changing cannabis venture has its origins in daughters’ ongoing medical odyssey
Reno couple’s game-changing cannabis venture has its origins in daughters’ ongoing medical odyssey
Hugh Hempel opens his 2015 Ted Talk at the University of Nevada, Reno asking the audience what they would think if he told them his 11-year-old twins were using marijuana? After a pause, he continues, asking how is it possible for 11-year-olds to even get access to pot?
Hempel goes on to reveal to a rapt audience in an auditorium where you could hear a pin drop that up until two years ago, he was completely ignorant about marijuana. All of that changed after 2007 when his twins Addison and Cassidy, 13, were diagnosed, at almost four years old, with a fatal disease called Niemann-Pick disease type c, a rare progressive genetic disorder characterized by an inability of the body to transport cholesterol and other fatty substances (lipids) inside of cells, and often referred to as childhood Alzheimer’s.
With the rare diagnosis Hempel, 59, and his wife Chris, 48, began a “medical odyssey.” “Many families go through years of trying to get a diagnosis and it could be eight or 10 years before they find out what is wrong with their kids. It took us about 18 months with us being really diligent with medical professionals and trying to get to the bottom of it,” says Chris of the twin’s Niemann-Pick diagnosis.
A byproduct of Niemann-Pick disease is seizures, which is where cannabis enters the Hempels’ medical odyssey -- and where the couple “go from propagandized by the war on drugs to being advocates almost overnight,” explains Hugh.
“Our main focus since our kids were diagnosed was just looking for anything that was available that we could actually give them,” says Chris. “Prior to getting involved in cannabis, we spent five or six years developing another drug for our twins that then went through the FDA process.
“The twins were the first in the world to get a compound called Cyclodextrin. So Hugh and I had already been focused on finding any available option for our twins; whether it be having to make a drug ourselves, which we did with top doctors going more the pharmaceutical route, all the way down to natural types of therapies.
“For us it was not really an issue to pursue cannabis, there was enough research on it and its anti-inflammatory effects. If your kids are facing debilitating seizures you will just about try anything, so to us it really wasn’t a difficult decision to make.”
Hugh adds, “We had spent six-plus years reading research journals, understanding medicine and biology so we had a big leg up when it came to finding the research that was available on cannabis.”
The Hempels were alerted to the medical attributes of cannabidiol (CBD), which is a non-psychoactive cannabis compound with medical benefits, after seeing Dr. Sanjay Gupta’s 2013 “Weed” documentary. “That’s what we were contending with with the twins,” explains Chris of seeing one of the documentary’s main storylines, Charlotte Figi, take Charlotte’s Web, a CBD-dominant cannabis oil, to combat her seizures resulting from Dravet’s Syndrome. “They were having very severe seizures from grand mal, tonic-clonic, petit mal, and we were having a lot of trouble controlling those seizures with standard pharmaceutical medications,”
Chris compares Addison and Cassidy’s seizures to a natural phenomenon. “We relate seizures to earthquakes, so if you are in an earthquake zone and, obviously, with two kids having seizures every day, you are racing over to deal with one, and then deal with another seizure, it kind of makes the magnitude of the seizure like an earthquake, maybe a 4.0 versus a 2.0.”
Addison and Cassidy were fortunate to experience results from CBD oil “pretty quickly. It was within days, more or less -- either you see results or you don’t,” relays Hugh.
Chris continues, “Some people have had really stunning results where CBD has stopped the seizures altogether, but for us it was more of a dampening down of the seizures. You might still have the seizure, but you see some of the intensity decreasing.”
Hugh expounds on the earthquake metaphor, adding that “the Richter scale factor played in. They had fewer seizures, the seizures were less aggressive and we were able to remove some amount of the zombie cocktail which made them brighter-eyed and gave them a better quality of life. In our twin’s case, because they are not Dravet’s kids or kids who are seizing 40 or 50 times a day uncontrollably, the results weren’t as dramatic, but even subtle results are hugely important.”
Hugh’s reference to the zombie cocktail is a mix of pharmaceuticals the twins were taking for their seizures and another important consideration regarding cannabis’ effect. “The zombie cocktail thing, don’t underestimate that either. The zombie cocktail made them sleepy and groggy, listless, they didn’t have fire in their eyes or turn their heads when you walked in the room. There’s just a lot of things that became better as a result,” he says of the cannabis oil Cassidy and Addison take, which is a combination of CBD and THC administered at a dose of 35 milligrams twice a day.
For many parents giving a child cannabis is a nerve-wracking proposition, but the Hempels were more fearful about making their daughters’ cannabis use public than actually giving it to them. “It’s scary,” offers Chris. “You heard horror stories in some of the other states where parents were getting arrested and CPS was getting involved. But we felt we needed to stand up and be public about it. The more momentum that was generated, the more people were willing to try it.”
“But let’s not forget,” Hugh interjects, “we have only been at it for four or five years, there are people who have been at it double or quadruple that amount of time. It felt very scary for us to come out of the green closet even five years ago and now look at the rate at which people are potentially jumping on board and taking a stand.
“Ironically, the place where we find the most pushback in some way is the traditionally trained Western medicine types. I think they find it either threatening or on whole, because it’s more complex, something they don’t know about. It’s the fear of the unknown and clearly there is some amount of displacement going on, frequently people are using cannabis instead of Western medicine.”
Almost simultaneously to their girls starting to take cannabis, the Hempels considered becoming a part of the very industry that would offer their daughters’ relief. “When Sanjay Gupta did that documentary it fit exactly our scenario and that’s about the time we started seriously considering not only CBD for the kids, but also becoming part of the industry. It just happened to coincide with when they started talking about the licensing and making it formal here in Nevada,” says Hugh of the couple’s idea to set up a relatively small-scale grow and dispensary in Reno in the fall of 2013.
Chris and Hugh became interested in the idea of entering the cannabis industry when they “quickly realized there was no professionalism in the creation of the medicine and we thought we were well suited to go there because of our background with technology and medicine and NIH (National Institutes of Health). And, just generally speaking, being business professionals we saw an opportunity to do good for society. That’s a lot of what started it all and at the same time, perhaps, do well financially for ourselves and our investors.”
One of the professional considerations the Hempels wanted to bring to the industry included cannabis that was medical grade quality. “A lot of the products are not tested for pesticides, molds and microbials. When you are dealing with kids who are already challenged neurologically, you certainly don’t want to be putting any medications in them that might have molds or pesticides,” details Chris.
Hugh expounds, “Even the most diligent home growers frequently don’t even know what they don’t even know. I would worry that no matter who we would try, we would still have pesticides or whatever that blew in from next door. So we really choose to go the commercial, professional route. The reality is we really didn’t have a ready supply of medicine for our kids locally, which was a challenge.”
The Hempels’ dream of a modest marijuana endeavor in Reno quickly evolved into operations in three jurisdictions. “We won licenses here (Nevada), and those were awarded at roughly the same time rec was starting to take hold in Washington and Colorado so we increased our investment levels in those jurisdictions and began building out really world-class facilities,” explains Hugh.
Since entering the industry in 2013 with the formation of their cannabis brand management company Strainz, Chris and Hugh's companies in Colorado, Washington, and Nevada are “making similar, if not identical, products in those three jurisdictions and expanding beyond.”
Hugh, who serves as CEO of Strainz, sums it up as “one thing led to another and we got licensed in Vegas and we started this national company and everything has snowballed from there. We have gone from relatively modest ambitions to relatively large accomplishments in the four years we have been at it.”
Although their entrepreneurial endeavors grew quickly, it’s still been a tortuous trudge to get to the end product. “The reality is even after all the promises and families that moved to Colorado (seeking CBD oil), I would agree that even today the supply of good CBD medicine is still very difficult. It’s literally taken us four years to get to a place where we can actually offer commercial grade CBD product that has THC in it to lots of folks on a relatively predictable basis,” explains Hugh. “Don’t forget if you are going to take kids off benzos or the zombie cocktail, you have to know for sure that you have got the marijuana medicine that’s replacing those drugs available to you at all times. You can’t take your kids off that stuff and then not have the medicine.”
Hugh continues, “it’s still shocking that the scarcity of high-CBD ratio products like 18 or 20 to 1 is still hard to get. Even to this day, we are finally just growing ourselves in Nevada after being in the industry for four years. We don’t have enough of it to supply what we believe is the strong demand that is out there.”
The dearth of cannabis-based medicine was illustrated this past May when the Hempels launched their first products in Nevada. Within three weeks of bringing their Bullet Concentrate brand of hemp seed oil-based tinctures to market, which are almost identical to the products the Hempels have been giving their daughters over the years, they sold out of the distillate-based vape pens made in three different ratios (20:1, 1:1, 1:5).
Product scarcity is a result of the challenging environment the cannabis industry operates in. Between the constantly changing regulatory environment and the banking restrictions, not to mention marijuana being federally illegal, making medicine becomes almost a secondary pursuit.
One example is what the Hempels refer to as sticker-gate, which is the near constant packaging changes required in each jurisdiction. “If you talk to anyone in the cannabis industry, they can tell you about all the costly and very labor-intensive stickers and things they have to put on the products due to the constant regulatory changes,” explains Chris, who is co-founder and VP of Communications for Strainz.
Both Hugh and Chris have backgrounds in high-tech having worked at Netscape during the Internet’s coming of age in the ‘90s and launching various start-ups in Silicon Valley and, yet, they call the cannabis industry the toughest by far. “There’s not regulatory consistency across the jurisdictions, everybody wants to reinvent the wheel,” explains Hugh. In turn, each jurisdiction has its own idea about everything from containers and labels to packaging symbols. For instance, Washington’s symbol for THC is different from Colorado’s, therefore requiring different packaging.
As a brand management company, Strainz endeavors to understand the complexities and struggles of the industry to make short order of the challenges it faces. “We are on the cutting edge of how we are structuring and how to expand into the various markets because we are dealing with so many complex regulations and state line issues,” bottom lines Chris of Strainz. “As you want to bring a tincture from Nevada, Colorado and Washington, you have to deal with people that have other partners who have the licensing, cultivation, production, the right kind of equipment, standardized equipment, etc., in order to make the product consistent across state lines unlike a Coca-Cola, which might have a regional bottling plant that can serve multiple states at once.”
Hugh compares Strainz to other brand management companies citing Nestlé and Frito-Lay as examples, noting that, “at that level we make recipes, packaging and provide those branded services to our operating partners in each one of the jurisdictions, and these are completely individually owned and operated companies that are affiliated but there is not cross ownership.”
Strainz’ current portfolio includes Bullet Concentrates; Honu, a Washington-based topicals and edibles maker; and Silver State Trading, a cultivator and manufacturer based in Sparks, Nevada producing California Finest, House of Jane, Jimi’s Cannabis Collection and Trokie brands.
In spite of the Hempels’ big vision for Big Cannabis there is still a lot to understand. “We have got a lot to learn about routes of administration, bioavailability, pharmacokinetics -- all these things we have learned about in the drug development stage. We haven’t even really begun to scratch the surface of cannabis on that,” shares Hugh. “Both Chris and I super passionate about the next five years because we can actually really begin to find out how to use the medicine, how to make it more intelligently, how to drive costs down, how to make it more available to more people, how to have to take less of it.
“That will be the big story of our lifetime, how broadly this plant can help people,” concludes Hugh. “The deeper we dig into it, the more we uncover potential. Every time we scratch the surface, we come across new applications or we stumble across new things that it helps with.”
While the future is bright for medicinal cannabis, it is gradually dimming for Cassidy and Addison no matter how much their parents further the potential of the plant. “They are very severely neurologically compromised and every year we see small signs of progression of the disease. So, at some point, they will cease being able to swallow effectively and will succumb to pneumonia or something similar. That’s just reality for us and we just have to face up to that and try and cope with it,” explains Hugh.
“Most children in their condition don’t live past 10 years old,” adds Chris. “They are 13 years old so we are just grateful for every day we have with them.”