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Naturally Splendid (TSXV:NSP) is a technology-driven health food and nutraceuticals company which develops, produces and sells hemp-derived nutrient-dense omega foods and related products. The company is quickly advancing its award-winning products throughout North American and Asian markets.
Naturally Splendid is a finalist for the prestigious NutraIngredients Awards, in the category of Start-up Ingredient of the Year, for their innovative omega ingredient HempOmega®. The company recently reported $1,385,000 in gross sales for Q1 2016. Earlier this year the company landed a nearly $1 million purchase order for hemp food products for Korea Beauty & Health Care Co. and secured a marketing platform for its NATERA line on South Korea’s Lotte Home Shopping Channel.
The Investing News Network recently spoke with Naturally Splendid CEO Craig Goodwin to learn more about these developments and the company’s growth strategy for 2016.
 
Investing News Network: Craig, it’s amazing to see how far you’ve come in so little time. You were recently ranked number four in the Diversified Industries sector on the TSX Venture Exchange. Could you give our readers some background into the company as it is today?
Craig Goodwin: Absolutely. We first started off as a private company as most people will know and we went public in 2013. Initially, we were involved in the superfood category. We were interested in the retail lines and our first product line centered around hemp. But we began to realize that at the retail level our company was going to be up against a commodity based product.
So, we invested quite heavily in science and technology, and eventually a processing facility in Saskatoon which is the POS Bio-Processing Center. We’ve grown from a retail super food line. We are now invested heavily into research and development which really emphasizes the benefits of plant-based ingredients.
We were able to extract and formulate these ingredients into value added products. So that’s really the differentiator between Naturally Splendid and many other companies out there. Not only do we have strong superfood retail lines, but our science and technology actually enhance those product lines.
INN: At the end of 2015 you acquired Chi Hemp Industries (CHII). Can you tell us about the acquisition and its significance for the company?
CG: Absolutely. Chi Hemp Industries was one of the original online hemp companies. I believe they were established in early 1998. They were more recently bought by a business in Victoria, British Columbia. So the CHII sales are continuing to increase and are providing positive cash flow right now for Naturally Splendid.
However, their area of expertise is really online marketing. So as important as the CHII brand was, we also acquired their online expertise. We’ve engaged the personnel within CHII to optimize our websites. In fact, I think we have now upgraded six of our sites and we now have a more effective online presence.
INN: Fantastic. Recently, you announced your HempOmega® bioactive ingredient is a finalist for a prestigious NutraIngredients Award. Can you tell us more about this product and its recent market success?
CG: Absolutely. We’re extremely excited with HempOmega®. Many of our followers will know the story well. HempOmega® optimizes hemp oil by taking what is already a perfect ratio of omega 3 and 6 which makes it more bio-available in the body. More importantly, we take that oil and we microencapsulate it into a powder, which then is dispersible in beverages or as an ingredient in foods.
Omegas are a massive consumer market not only in North America, but throughout the world.
They are known to reduce inflammation which is the source of many illnesses. Not only can HempOmega® be used in food and beverages, but it can also be used topically in the form of nutraceuticals. So by providing an omega ingredient that can be widely used or adapted to a number of products, we are actually creating a new omega market that has never before existed.
We have been conducting studies with HempOmega® as an ingredient in existing pet food formulations. Up until now, most companies have used fish oil with some success as far as health benefits, but our early findings show our product can deliver maximum omega nutrition to canines.
Another great addition to the HempOmega® story is our recent poultry study at the University of Manitoba, where we had absolutely incredible results. Incorporating our HempOmega® as an ingredient in the chickens’ daily feed actually enhanced the omega concentration in eggs by more than 500 percent and in the meat of the chicken by almost 300 percent. This is important because consumers are looking for omega nutrition and our HempOmega® clearly delivers in that category.
Our ingredients can enhance the nutritional value of existing product lines in not only human and pet applications, but in livestock applications as well. We see this as a massive opportunity and if we had international recognition by winning the award in Geneva in the middle of May, that would be absolutely phenomenal. By being one of three finalists, I think we’re already a winner.
INN: Right. Youve been aggressively growing the product lines and now your distribution channels as well. Can you tell us more about the headway youve made into Asian markets this past year?
CG: You know, absolutely. We have continued to make progress on the NATERA line and we are now seeing traction with positive effects. But really where we hit most of our growth right now is through our bulk division that was previously called BC Ingredients. We renamed that division Simpli Ingredients and we’ve been pursuing international contracts for exporting. The first country in Asia that we’ve been able to make inroads in is South Korea through Korea Beauty & Healthcare or KBH.
We have been able to report over a million dollars of business so far in the first quarter and the second quarter is showing great promise as well. It  isn’t an individual retail line that’s showing the most growth right now, it’s really in the export opportunities. South Korea just being the first of the Asian countries that we hope to continue to penetrate throughout the region.
INN: Excellent. Can you tell us more about youre opportunity with the home shopping channel in South Korea and what this means for growth and future sales in the region?
CG: Absolutely. We’re very fortunate to have a strong partner in South Korea with Korea Beauty & Healthcare. They are a marketing machine. They focus heavily on online sales as well as becoming a specialist in the home shopping channel space. And the home shopping channel opportunity in South Korea is really a phenomenon that many North Americans, including myself in the very beginning, don’t fully grasp.
Shopping channels run 24 hours a day seven days a week and we’ve seen reports now that their sales are actually greater than the traditional brick and mortar retail opportunities. A package sitting on the shelf simply does not begin to tell the full story of the health benefits of these products. So for health and wellness products, to be able to tell that message to the consumer through live spokespeople has proven greatly beneficial.
We have launched on the Lotte Home Shopping Channel which is the second most successful shopping channel network in South Korea. I think they reach over 21 million people if my numbers are correct. In our first show, we sold over 40,000 pounds of shelled hemp seeds in the first hour.
We have accelerated the programs that we’re running to additional home shopping channels. We expect that success to continue and in fact increase. The Paleo / NATERA shelled hemp seed line, which is a partnership between our Korean supplier and ourselves, is off to an incredible start and we expect that growth to continue.
We will be expanding the product offering to South Korea to not only include our whole hemp seeds or hemp hearts but also our hemp protein and hemp oil. And I’m circling all the way back to where our science and technology R&D is of great benefit. Those are commodity based products that we are clearly competitive with our HempOmega®. And so, we began discussions with KHB on how to either sell HempOmega® in a number of different forms, whether it be just value added capsule and ingredients, or as an added ingredient to existing product lines that KBH already carries.
So in addition to continuing growth of our hemp seed line, we’re going to expand that product offering into protein and oil. But the real big uptake I believe is with our proprietary HempOmega®. That’s a product of course that only Naturally Splendid has and I think that reduces competition and puts us clearly ahead of everybody else.
INN: Yeah. Its a great growth strategy and it seems to have already translated into $1.35 million in sales from the first quarter. Whats your target for future sales?
CG: We recently attended a trade show in Singapore as an official member of the Canadian Trade Delegation. We were invited by the BC Ministry of International Trade to participate in the BC booth as part of the Canadian pavilion. In Singapore we made extensive contacts with a number of foreign ministers in surrounding Asian countries. So our objective is to duplicate the success we’ve had in Korea throughout that region.
Now, it is worth pointing out there are challenges to bringing hemp-based products into certain Asian countries. But I can tell you there are multiple opportunities throughout the Asian region where we can begin exporting hemp-based products. In countries where there’s a regulatory challenge for hemp-based products, we are prepared to market other products in our plant-based ingredient line. We are also actively looking for other products that we can add to our existing offerings that would be of interest in those regions.
So, Asia is very much a target for growth. I think that’s where you will continue to see the biggest sales and that’s going to augment nicely with the retail sales that we are beginning to generate in North America.
INN: Excellent. And wrapping up, what other catalysts can investors look forward to this year?
CG: At Naturally Splendid our goal is to continue to add significantly to our top line sales. We have that true hockey stick revenue chart right now and that will allow us to be profitable quickly or much sooner than later. The first goal of our company was to gain market share, which we’ve done. That has given us buying power and that’s only going to  enhance our margins as we move forward.
So the goal for Naturally Splendid is to continue to increase our top line sales and increase our margin, which will then lead to profitability. At the same time, we’ll continue to add to our product lines, enhancing what we already have with other plant-based ingredients.

Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.

 

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Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, where he worked on lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now seeing a return to form by way of the excitement for an ongoing opening process in the US.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes for cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

 

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“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro environment pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s current potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business potential, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed to work on the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be at the moment.

 

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While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance.

In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadians waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent an increase to their already thriving operations.

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 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

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Appointment of Dr. Kelmendi, Assistant Professor of Psychiatry at Yale University and co-founder of the Yale Psychedelic Science Group, brings another experienced medical professional to Lobe’s advisory team.

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the appointment of Benjamin Kelmendi, MD, Assistant Professor of Psychiatry at Yale University School of Medicine, to its Scientific Advisory Board.

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Ayurcann Holdings Corp. ( CSE: AYUR ) (the “ Company ” or ” Ayurcann “), a Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, is pleased to unveil further details of its Phase 2 expansion plans.

Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

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