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The Future of Distributing Regulated Products is Already Here

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Podcast April 30, 2021

The Future of Distributing Regulated Products is Already Here

In a world where distribution channels are becoming more and more tailored to specific locations, consumers and products, technology is enabling innovation that would have been impossible only a few years ago. Today we’re speaking to Corey Yantha, CEO of Dispension Inc. about a very unique way to sell a specific kind of product and the potential application to a wide range of scenarios.

Transcript

Melinda: Hi, I’m Melinda, and you’re listening to Think Retail.

In a world where distribution channels are becoming more and more tailored to specific locations, consumers, and products, technology is enabling innovation that would have been impossible only a few years ago. Today we’re speaking to Corey Yantha, CEO of Dispension Inc., about a very unique way to sell a specific kind of product and the potential application to a wide range of scenarios.

Corey, welcome and thanks for being with us.

Corey: Thank you for having me. I’m looking forward to our conversation today.

Melinda: Great. Can you start us off by just telling us a little bit about you?

Corey: I’m Corey Yantha, CEO, President, and Founder of Dispension Industries. We’re a Dartmouth-based, health and life sciences tech company. And we’re really focused on using secure automated kiosks to distribute restricted products in a data-driven way.

Melinda: That’s exactly what I wanted you to tell me a little bit more about. Tell us how this works.

Corey: Yeah. So we think we’re going to fundamentally disrupt the way restricted products are distributed with our secure automated self-checkout kiosks. We’re really focused on using technology to allow people to access restricted products in an unattended way. And we’re talking about some of the biggest markets on the planet. You’ve got pharmaceuticals, alcohol, cannabis, nicotine, lottery, and now psychedelics. And, you know, these are more than trillion-dollar industries globally. So we think that there’s a huge opportunity here to use technology to distribute these products more securely in an unattended way. And then, you know, with all that data that comes with it.

Melinda: In an unattended way, can you describe physically what this kiosk looks like and how it works?

Corey: Yeah. So our kiosks take different shapes and sizes, it depends really on the vertical. But if you think about a sophisticated vending machine or an automated retail kiosk, we’ve used that as the base model and then we’ve modified those kiosks with advanced biometrics and different ancillary devices in order for us to be able to ID people in a low barrier way at the kiosk. So by using advanced biometrics and automated technology we can verify people with 100 percent certainty at the point of sale and allow them to access these restricted products that would traditionally require human oversight. You know, I think the reason why we need to change the current system is because it’s really unreliable, costly, and unsafe.

The way that people have accessed restricted products over the many decades has required human verification. And human verification has a number of issues. It can be scammed and faked, people take sick days. It really comes down to human judgment. You know, the other issues are that a lot of these restricted products are sold from brick-and-mortar, and these brick-and-mortar facilities have access limitations. And then there’s, you know, hours of operation and cost of service. So we think that by using a low barrier scalable technology, we can provide access to restricted products to more people at more hours in the day.

Melinda: I assume that would also impact remote communities and that kind of thing.

Corey: Exactly. Yeah, remote communities are a big opportunity for us, specifically on the recreational cannabis side. How are you going to combat the black market if you can’t provide low-cost access to these products to all Canadians, or really people in rural and remote communities? And the cost to service these communities are often very high. So we have provided government distributors with a technology solution that will allow them to provide access to all of these rural and remote communities in a really cost-effective but data-driven way. That also protects the physical safety of the products and reduces that face-to-face contact that I think people are very concerned about in the post-COVID era.

Melinda: Right. So, I mean, theoretically, I just want to kind of walk through this as if I’m a customer. Let’s say I want to purchase cannabis products. I can go up to a kiosk and it will recognize me through biometrics. How does that process work? Do I need to be registered?

Corey: It’s a good question. Depending on the market vertical, there are different biometric systems that we can use in order to effectively age-gate consumers at the point of sale. So if it’s for a retail product like recreational cannabis, you don’t maybe want those barriers of pre-enrollment. So what we use is a document authentication system that compares the person’s face at the kiosk to the document and does a one-to-one comparison really in real-time and can authenticate them within a few seconds to access the products inside the kiosk.

And then there’s other systems that use a pre-enrollment, where someone can access kiosks by simply scanning their palm. And that’s much more effective in a medical setting with a patient group, as you know, a patient, especially in a vulnerable community, and we’ll talk to that a bit later, doesn’t require ID or a cell phone, you can just simply scan your palm. So there’s a number of different authentication systems that we’ve integrated into our kiosk for different purposes, but really we’re trying to provide low barrier access to these products to specific consumers.

Melinda: Okay. So where is this being used right now? I mean, are the machines in use? And if you could tell us a little bit about that, that would be really interesting.

Corey: As of today, we have five machines in the market, they’re located in BC, Ontario, Nova Scotia, and they’re part of a harm reduction program where we’re providing people with access to safe pharmaceutical-grade opioids to prevent overdose deaths and their dependency on the illicit market. So this project is called The MySafe Project, and it’s received international media attention and we think that it’s a very scalable way to prevent overdose deaths and reduce the impact that the overdose crisis is having on society.

So at one point in 2018, I had met Dr. Mark Tyndall, who was at the time, the Executive Medical Director of the BC Center for Disease Control. And it was really his responsibility to figure out how we’re going to prevent overdose deaths. And at one point he mentioned in an off-the-cuff interview that the problem was so bad that maybe we’d have to put, you know, drugs in vending machines in order to get them to everybody that needs them. And I read his comments in the Toronto Star, and I actually called him and asked him if he had ever thought about the technology that would be used. And he said…he just kind of said it and then, he was asked about it 20 times over the next few weeks and realized that it was maybe one of the best ideas he ever had.

So, you know, from that point on, we started developing this program, the MySafe Project, which used secure automated technology to really support the public health and safety challenges of the overdose crisis and providing people with low barrier de-stigmatized access to a pharmaceutical-grade drug to reduce their need to commit crimes and then reduce the impact of overdosing on first responders and the the court systems.

So it was really about using technology to solve a real problem, and then taking that technology and now further expanding it into three provinces. So, right now we have about 240 participants using our program and we intend on scaling that further, but Dispension really is just the technology provider for that program. We also are developing solutions for cannabis distribution and for pharmaceutical distribution in other areas. So currently, we do have opportunities in other spaces, specifically distributing Naloxone kits and some over-the-counter pharmaceuticals, but we have some big aspirations in this space.

Melinda: So how is the MySafe Program going so far?

Corey: The MySafe Program has been a huge success so far. As of last month, we have distributed over 5,000 packets of safe prescribed opioids to prevent overdose deaths. And based on Health Canada’s funding in February, we’ve been able to expand that program to five communities across the country. So we’re able to have even more of an impact on these vulnerable communities than just the one pilot machine which was operating since December 2019.

So the MySafe Program has received $3.5 million in funding from Health Canada. And we have definitely started with the highest bar, which is Schedule I narcotics. And so that’s really prepared us for other market verticals and based on the harm reduction approach that we’re taking, we are using technology to reduce the impact of these public health and safety challenges, which are not just visible here in Canada, but there’s obviously an overdose crisis in the United States and every single country in the whole world distributes restricted products. So we think there’s a huge opportunity globally for this type of technology.

Melinda: It’s wonderful. In terms of privacy, so biometric authentication is still relatively new and we can probably expect some regulations. How are you preparing for that?

Corey: Currently, all of our data is compliant with either health record requirements or personally identifiable information requirements. We meet PIPEDA standards, we’re building towards HIPAA, and we’re compliant with all of the current data privacy standards. So we do understand that biometric data can be very incriminating in a way, specifically when you’re talking about facial recognition. The technology that we’re using currently for the MySafe Program uses your internal vein pattern in your palm. So it’s actually quite anonymized and low barrier, and participants aren’t as concerned with that information because it’s anonymized and it’s a numeric hash. So you can’t be connected through your internal vein pattern to any of the products that you’re accessing. So we think that this is a very private biometric system, but we are currently working within the privacy regulations that exist here in Canada, and we’re working towards the United States regulations as well.

Melinda: Great. And you’ve mentioned a bit about some of the applications that you see for other products and industries. Can you tell me a little bit more about that?

Corey: The applications and use cases are really endless. So what we’re doing is, we’re looking at how we can improve the way things are currently being done. And it comes down to providing a secure solution that can identify people and distribute them restricted products. So you can think about use cases in, you know, pharmacies, for prescription pickups, for distributing over-the-counter medication for extending access to healthcare services. There’s a use case in ambulances where their lockers are frequently broken into, even when they’re making stops at calls. So preventing theft of drugs on board, preventing diversion of those drugs, and using these kiosks for university campuses, to provide access to, whether it’s virtual care or commonly prescribed medications to an isolated population, like a university campus. There’s opportunities with ward stock management in hospitals to prevent theft and diversion.

And then we can talk about maybe some more retail applications like the medical cannabis and recreational cannabis side, where you’re distributing something that is regulated and needs to go to a specific patient or an aged gated consumer. And then there’s lots of use cases for improving adherence to different programs and for clinical trials where you want to track how often people are using these medications, or if they’re sticking to their medication regimen for something like Hep C or HIV.

And then we think that there’s a massive opportunity in the stadium of the future for low contact adult beverage distribution. We’ve been talking with a few stadium operators about, you know, when fans start going to live events again, and there’s a huge need for an increased number of point of sale to reduce congestion in the concourse, we’re talking about reducing face-to-face contact between consumers and staff.

So our technology would allow a stadium operator to increase the number of places where people can grab a beer, for example, and our kiosks integrate technology which can identify an intoxicated person in a contactless way. It’s a contactless payment system, and for the most part uses contactless biometrics. So we are very excited about the stadium opportunity and it’s really about using biometrics to understand your consumers better. You know, who’s buying what, when? And being able to direct whether it’s important media or collecting information about consumption behaviors directly to your fans, we call it “fanalytics.” So really knowing your fans better and their consumption behaviors will help you cater to their needs and really provide them with that satisfaction and joy that they’re looking for.

Melinda: That’s really interesting too, that it can detect intoxication. At least in Ontario, it’s been a real challenge for servers who are providing alcohol and they can be held criminally responsible if that person then drives away and gets into an accident and causes harm. So that’s a really excellent feature.

I wanted to ask a little bit about…you were talking about ambulances and paramedics having their lockers broken. Can you talk to me about how secure these kiosks are?

Corey: Yeah. These kiosks, specifically the ones that we’re using for the MySafe Project are about 750 pounds, and they’re built really with security in mind. So the first step for us was to develop a kiosk that was secure and that could prevent theft and tampering of the contents. So we used a standard kiosk, we hardened it. We increased the durability of the screen and some of the other components. We’ve integrated biometrics to prevent unauthorized access. We’ve integrated CCTV cameras and an alarm system that we’ve developed recently. So these kiosks are really, you know, smart armored dispensing devices. And we’ve done some work with Health Canada to assess the risk of these kiosks and those results have been quite favorable as far as the security of our kiosks and really the reduced risk of human judgment. I think that’s one of the main things here. You talk about a bartender and the liability of serving somebody while they’re intoxicated, we’re using technology to reduce that risk of human judgment. So even with the intoxication system, Intoxivision, this technology can identify an intoxicated person much more accurately than a human by using advanced algorithms.

So technology will improve the way that these products are distributed, will improve the security of the distribution of these products, and it will reduce the liability and the risk to facility operators because of that human judgment aspect.

Melinda: Right. And there’s so many interesting elements about this type of distribution, and we’ve covered a lot of different benefits. Are there any that we haven’t covered that maybe you want to share with us?

Corey: I would say the main thing that we’re really focused on is how can we use technology to improve the way these products are distributed and improve what retailers and distributors know about those consumers? So there’s a huge data piece to this as well, where you can use this data to understand your customers better, but you can also use this for research and evaluation purposes for scientific and academic evaluation to understand the patterns of use for specific populations, especially when it comes to vulnerable communities. So we’ve been using this technology with a group of people that are often forgotten about, or who are not provided with the kind of the state-of-the-art treatment. And so it’s really an interesting dynamic where you have people who are part of a very vulnerable group, but they’re using high-tech systems to help support their needs. And it’s been very interesting, the initial data that’s come out of this program.

Melinda: And I mean, we all know that that’s just sort of what the future of medicine is, if you have that data, then there’s so much you can do that we’ve never been able to do before. So that’s really interesting as well.

So I’m curious about where your…you’ve mentioned to us that you’ve got five machines out there and this pilot project and things are going really well. What’s coming next for Dispension?

Corey: Well, this year we’re doing an investment round. So we currently have a round open for $4 million, and we’ve had quite a bit of success and interest there. We are completing an accelerator that we’ve been participating in for the last six months. We’ve been working with TELUS and Blackberry to develop a really cool IoT device. So our kiosk is now the first trusted IoT, 5G enabled kiosk in the whole world, which has been a really exciting milestone that we’ve achieved. But yeah, in 2021 we are aiming to have about 75 kiosks in the market, and so there’s quite a bit of work that we’re doing on the research and development side, but also on the business development side. So we’ve been having good conversations with banner pharmacy retailers, with cannabis retailers, with stadium operators, and yeah, you know, we’re really looking at this as a global business. So we have some opportunities in Israel, and in Australia, and South Africa for prescription pickups and medical cannabis. And so we have, I think a lot of really great things going on and it’s just a matter of continuing to grow and build the business in order to capitalize on all of these different market verticals.

Melinda: Really very timely as well with the pandemic and really needing that contactless experience, so congratulations.

Because we’re talking to retailers here and you’ve mentioned a bunch of different verticals for which this is relevant. If you were to talk to brands that work with controlled substances or gated substances, if you were to give them advice on how biometrics can be leveraged to improve the customer experience, even thinking about things that maybe aren’t possible yet, but are coming, what would your advice be?

Corey: Yeah. I would say, call Dispension now. I think those would be the first things I’d say, but yeah, as far as advice to how biometrics can be used really to leverage the technology and improve the customer experience, you need to have a secure platform. So we’ve developed a secure platform that can provide these products to consumers in a very convenient way. And by using these advanced biometrics, you collect that personal information and extend the chain of custody of that product directly to the consumer. So it really provides you with that chain of custody trail all the way from when the product was created to when it was distributed, farther than just the brick-and-mortar store that sells it, you can connect that product to the end consumer. So we provide brands and retailers with that final leg of the journey for that product. So if a retailer or a brand really wants to know their consumers better, they should use our technology so that we can provide them with that information about who’s actually using their products and when.

Melinda: Great. Well, this is really exciting and we will link to the Dispension website. So if people are interested in learning about more, they can contact you. Thank you so much for sharing what Dispension is doing with us today. It’s really interesting stuff.

Corey: Thank you so much Melinda. I really appreciate the opportunity.

Melinda: Technology is enabling us to be remarkably specific about distribution strategy, allowing brands to become more focused on how to get their product to their consumer in a way that best addresses their needs. And what I love about Dispension is that its genesis was all about utilizing technology to overcome a very human problem. And this is how we at SLD think we need to approach all consumer-facing tech integration, regardless of the product or service, the human problem has to be at the core. Pushing technologies to drive efficiency has been the mantra for the past 20 years, but that paradigm is shifting now to one that is more human-centered and Dispension is a great example of that kind of forward-thinking.

If you’d like to get in touch with Corey, you can find him at dispension.ca, and I’ll link to the site in our podcast transcript. Thanks for listening to Think Retail.

About

Corey Yantha is the President, Founder and CEO of Dispension Industries Inc, a company that is transforming the distribution of regulated products with an integrated retail platform that combines industry-leading software, biometrics, and hardware to create a secure, frictionless experience for the consumer.

Think Retail is a podcast where top designers, strategists, thought leaders and business people discuss what’s coming next. For more information, email info@sld.com.