The Pharma Flip: How the Stratos Cannabis Company Was Born

Features - Cover Story

Disenchanted after decades in the pharmaceutical industry, Jason Neely and Brenda Verghese pivoted to cannabis, harnessing their formulation experience to put health and consistency at the forefront of Stratos.

August 10, 2022

Brenda Verghese and Jason Neely at Stratos’ cultivation facility in Pueblo West, Colo.
Photos by Malissa Ahlin

Brenda Verghese tells the story of a night in 2014 when her former pharmaceutical industry coworker Jason Neely invited her out to dinner. As the evening progressed, so did the conversation. Then Neely presented an opportunity Verghese didn’t expect: He was starting a new company—a cannabis business—and he wanted her to join the team. Between them, Neely and Verghese had decades of experience as formulation scientists in the highly regulated pharmaceutical and nutraceutical industries. They worked together in research and development for portions of their careers.

“So, when Jason came to me with the proposal, I listened to him because I have a ton of respect for the guy,” Verghese says. But when she got home, she says she basically told her husband, Cecil, that Neely had lost his mind and was going into marijuana. Raised in a strict household as a child of immigrants from India—and a product of Nancy Reagan’s “Just Say No” campaigns—she didn’t have cannabis in her career plans.

But she took Cecil’s advice to heart. “The first thing he told me is, ‘Before you say no, do your research.’ And that’s exactly what I did,” she says. “Within three months, my outlook on cannabis did a complete 180. I began to appreciate it for what it really was. It’s a god-given plant that has so many medicinal benefits. And I really wanted to be a part of the force that harnesses those benefits.”

Neely, Stratos’ president and founder, launched the company in December 2014. Verghese, now vice president of research and development, came on board seven months later.

The Stratos cultivation team at work pruning plants in the veg room.

Leveraging Disenchantment

As Neely looks back on events that influenced his career choices, he recalls his grandmother’s death when he was very young. He was motivated to study science in hopes that his training and education could eventually help others.

His first job after college was in R&D for one of the nation’s largest pharmaceutical manufacturers, then known as Mylan Pharmaceuticals, where he felt that his work made a positive difference. But that feeling waned during his 20-year career in pharmaceuticals and nutraceuticals. He became disenchanted as he felt the work became more about making money than helping people.

“At the time I met Brenda, I was working on extended-release opioids. And I was wondering if my work was contributing to the opioid epidemic,” Neely recalls. “My home state of West Virginia has been decimated by opioids.”

By 2014, he was in his early 40s and questioning his career path. Then he was chaperoning his kids’ elementary school dance and struck up a conversation with a fellow dad who had been in the medical cannabis space for a few years.

The conversation continued over the following weeks. An idea took form: Neely’s pharmaceutical experience could make a difference in this new industry. He could help people deal with chronic issues in a healthier way compared to opioids or some other pain medications. And, from there, Stratos was born.

Like Neely, Verghese was similarly dissatisfied with her 16-year pharmaceutical formulation career, where she focused on taking products from concept to commercialization. By the time she and Neely had dinner that night, she’d taken a side job with Project Angel Heart, a Denver nonprofit organization that prepares and delivers meals for people with severe illnesses and limited mobility.

“I realized I wanted to be in a career or on a career path that really helped people,” she says.

Stratos employees weigh infused prerolls.
Stratos operates 22,000 square feet of greenhouse cultivation and 1 acre of outdoor cultivation.

A Pharmaceutical Approach

As Neely and Verghese studied the options in the earliest days of adult-use legalization in Colorado, they noted a lack of consistent dosing in ingestible cannabis products and alternatives for people who wanted to consume cannabis in forms other than traditional smoking or vaping devices. They knew they could fill that gap through pharmaceutical technologies and techniques, coupled with health and wellness mindsets.

“The really great thing about the pharmaceutical industry is that you can trust what you get. There is so much science behind it and so much testing and just such a focus on consistency and quality,” Verghese says. From FDA audits to DEA interactions, pharma guidelines are strict.

“That’s what we brought into this industry, too,” she adds. “The big things that we brought with us were the rigorous discipline, the consistency and the quality.”

While much of the cannabis industry revolved around inhalables and inconsistent ingestibles, Stratos emerged in the market as a leader in THC tablets. With Stratos tablets, patients could get a predictable, precise, consistent THC product with optimal bioavailability. On the company website, Stratos details its process, emphasizing its “rigorous” approach to dosing and ensuring that consumers get the same product—and the same effect—“each and every time.”

But there was another reason tablets came first.

“Mostly because that’s what I’m really good at,” Neely says with a laugh. “Tablets offer just very reliable, consistent products over a long period of time, batch to batch.” He understood the technology and techniques extremely well, having worked on close to 100 different products with different dosages during his pharma career, he says. “I do think [tablets are] one of the best forms that you can bring cannabis through,” he adds.

One unanticipated disadvantage was the perception of tablets as “pills”—a stumbling block for people trying to get off opioids and other prescription meds, according to feedback from customers and dispensaries. That perception spurred expansion into tinctures, salves and other products. (Interestingly, the “pill” perception proved beneficial during cannabis education Stratos did with older consumers at senior living centers.)

Stratos’ unconventional approach extended to branding as well. Rather than marketing cultivars, they marketed products according to the effects consumers could expect: Energy, Relax and Sleep. Though more widespread now, the practice was uncommon at the time. The company’s products are sold in nearly 500 dispensaries throughout Colorado.

Stratos’ product offerings include full spectrum tablets, tinctures and topicals, plus more.

Tackling Cultivation Standards

While Neely has scientific expertise, growing cannabis wasn’t in his skill set. He’s frank about the company’s cultivation struggles with multiple growers and consultants and more than 10 different nutrient lines during its eight years in operation. However, in the past 18 months, he has dialed in grow operations and believes Stratos is truly producing “really good flower and product.”

Stratos’ head of cultivation is another former pharmaceutical R&D coworker who shares the desire to apply scientific methods to the grow. The team works together to learn as they go. They also seek out more experienced growers and learn from them. “That’s more what we’re about: Putting [egos] aside and really learning from an R&D perspective,” Neely says.

The company operates 22,000 square feet of greenhouse cultivation plus a 1-acre outdoor grow. When necessary, it sources additional product from carefully vetted growers. It also works with select hemp farmers for a hemp-derived CBD line. CO2 and solventless extraction and manufacturing are done in-house, with testing at every product stage.

“One thing we learned in the pharmaceutical industry is you always test your product through every stage of the production process, just to ensure that you are maintaining efficacy,” Verghese explains. Testing includes incoming raw materials, and all certificates of analysis (COAs) accompanying those materials are verified internally. Each stage of the production process, such as the powder that becomes a tablet, is tested to ensure uniformity, consistency and effectiveness.

Extracted products at Stratos start with flower, not trim. “To get as much of the whole plant as possible, the majority of our products only use flower,” Neely says. “We do not sell just straight flower and bud, so all that material is going into our products.”

The efforts haven’t gone unnoticed. Stratos was awarded the Seal of Approval by Realm of Caring, a nonprofit dedicated to providing research, education and resources to cannabinoid consumers and healthcare professionals.

“Being a partner with Realm of Caring has been such an honor,” Verghese says. “One of the things that drew us to them, and I’d like to say likewise, is just that our missions and our motivations were aligned. We both are setting out to help people live better through cannabis therapy.” She adds that, as odd as it may sound, the Stratos team enjoyed the intense, months-long audit process. They appreciated that the vetting procedure was tough, reminiscent of their old FDA audits, and that it wasn’t easy to get this approval.

Stratos also participates in Realm of Caring’s Observational Research Registry (ORR) program, where registered patients receive cannabis medication through vendor donations or discounts and report product experiences quarterly. Johns Hopkins University Cannabis Science Lab tabulates the data for their research and shares it with partners, including Stratos.

“It’s a great partnership in that we get to see the data, we get to see what is beneficial, what is not and re-formulate our products accordingly,” Verghese says. As scientists, she explains, the more data they have, the better. “It helps us make an effective and good decision with products going forward.”

Stratos products are sold at nearly 500 dispensaries throughout Colorado.
Early-stage vegetative plants in pots.
Neely says Stratos’ prerolls far outsell the company’s tablets, tinctures and salves.

Engaging Customers

Verghese stresses that listening to consumers and dispensaries is a big part of R&D for new Stratos products. “That’s part of our mentality. Utilizing what the industry needs was really big for us,” she says.

Verghese describes coming up with new product ideas—with the goal of providing a better quality of life for people through cannabis—has been a concerted effort between Stratos, dispensaries and end consumers.

Neely shares that listening to the customer was missing in pharma, so Stratos strives to actively engage consumers and dispensaries. Listening to customers who wanted a product that combined CBD and THC helped drive the company’s expansion beyond THC. A 1:1 THC and CBD combination is one of the company’s best-selling products, Neely says.

“I realized I wanted to be in a career or on a career path that really helped people.” Brenda Verghese, vice president of research and development, Stratos

Listening includes in-house suggestions as well. The company expanded into inhalable products in part due to the overall market demand for flower and concentrates.

The idea for a preroll came from Stratos employees asking why the company couldn’t apply the same high standards to create high-quality inhalables—which Neely says far outsell their tablets, tinctures and salves.

“As we became more ingrained in the industry, we realized that in the smokable arena, there was a way to insert science in there, too,” Verghese says. The slow-burn preroll is one example. Packed with premium flower and infused with premium CO2-extracted full-spectrum oil, it burns for 25 to 30 minutes.

“We’re strong believers of whole-plant therapy. We’re strong believers of not adding additives to Stratos products,” Verghese adds. “Maintaining that whole plant effect and benefit in your products is actually a really hard endeavor, even hard for us coming from the pharmaceutical arena.”

Tablets were among Stratos’ first product offerings “because that’s what I’m really good at,” Neely says.
In the past 18 months, Neely says Stratos has dialed in grow operations and believes the company is now producing “really good flower and product.”

R&D Roadmap

Looking down the road the next five or 10 years, Neely and Verghese anticipate Stratos will look different than it does today. But the passion for helping people live healthier lives will be the same.

“Our goal is to make Stratos more of a household name for health and wellness—and that goes beyond just cannabis,” Neely says. “… There are other things that we as a company can do to expand health and wellness.” They’re open to exploring other products where their approach and expertise could make a difference, including psychedelics, should their path take them there.

“We’ve reinvested in R&D, and that’s really where our heart and soul lies. That’s how we want it to grow, which is a very different approach than most companies, which is get out there and get one product and then expand out of state,” Neely says. “We’re trying to grow the different products and what we can become before we take that step. So, we’re staying true to our mission [and] creating products that people can trust.”

Jolene Hansen is a freelance writer specializing in the cannabis, hemp and horticulture industries. Reach her at jolene@jolenehansen.com.