In-depth interview and analysis with CEO's from the cannabis industry
Congrats on the recent deal with Q4 Sports (www.q4sports.com) – can you go into a little more detail about the transaction
Thank you, its something we have been working on since June. It was something that took a little longer to get done than we wanted, but happy to get it teed up and expect it to be closed by the end of the year. This agreement will help the Company two-fold; bring in revenue from the distribution & headwear portion of the agreement, and secondly provide a entrée into the urban & international markets to promote our CBD products. While we are making our push across the globe, urban markets have been traditionally overlooked by the CBD industry, and this deal gives the Company to reach this demographic that has fallen to the wayside as far as CBD goes.
Since we last spoke earlier this year, it appears that the Company has struggled in many areas – how would you like to summarize the latter portion of the year?
It’s been a challenging year to say the least. Not going to beat around the bush, the Company has not been successful generating revenue - yet. Combination of factors - issues on bottling with our aluminum, tariffs, manufacturing issues, logistical issues, foreign transfers. The confluence of events that led to this is quite long, almost as perfect parlay of events. I certainly take responsibility for this as I am CEO and it all falls under my purview, I accept that responsibility. But I don’t view this year or these issues to be the final chapter for the Company, in fact I feel it’s only the beginning of the story. We have put lots of effort in developing a sustainable and scalable sales strategy for the Company. It has taken time and with any emerging growth company, especially in the public space, everything happens in full view. It comes with the territory both good and bad, but I certainly haven’t been deterred by it and I’m excited by what the future holds.
You mention being a public company, so obviously you are sensitive to the sharp decline in share price. How would you address this with your shareholders?
No way that I can’t acknowledge it; this has been the 800 pound gorilla in the room for the latter part of the year. It has been extremely challenging from different front; the entire industry has faced downward pressure and we have taken the brunt of it. I definitely feel the Company has been oversold and is severely undervalued. Even with the state of the industry, I feel that the Company’s proprietary technology is not even fairly valued, let alone the other assets in the portfolio. I believe that once shareholders see discernable progress in executing the Company’s business plan, specifically in the area of sales and distribution, there will be some turnaround.
Last month you announced distribution in 7-Eleven. Do you think this is an example of progress that you were referring too?
Yes! Although we have started small with one 7Eleven franchisee group of stores, their huge footprint provides tremendous opportunities for us. Part of the distribution issues have been that traditional big box retailers have been hesitant to sell CBD-infused ingestible products due to inconsistencies from regulatory bodies. 7Eleven has always been progressive with new products, and they have become one of the first large scale chains to open the door for CBD ingestibles. Targeting franchisees is our strategy to get into the door, and we have had success this with this strategy. Not only did our LALPINA CBD water quickly sell out of its initial order, we have had a number of subsequent discussions with other 7Eleven franchisee owners about expanded distribution. I have been in contact with 7Eleven’s corporate communications team to work on how collectively we can work together to promote our CBD products in 7Eleven stores. This is a very exciting partnership. And I’d like to remind everyone that our product is available on Singleseed.comwhere we are a top seller.
Topical and cosmetic CBD applications have begun to be sold by big box retailers, what is the Company’s plans for these channels?
Last month , we officially launched the plant + body essentials e-commerce store (www.plantbodyessentials.com) . We feel this brand is built to be sold across multiple retail channels, and are in discussions with big box retailers to sell the product. We have actively been pursuing distribution deals with a number of big box retailers. Ironically, GNC is one of those retailers, as earlier this year, they began the sale of CBD topicals in their stores. It was frustrating what happened with them earlier this year, but business is business. The Company has been in contact with them about getting plant + body into their doors, as it meets the current mandate of allowable CBD topicals. I hope to have a positive update in the coming weeks about this development.
The Company recently announced a cosmetic distribution deal in Thailand. Do you see continued focus on international expansion in 2020, and will it strictly be topicals or beverages as well?
The agreement in Thailand is not just for plant + body, but also our American Premium brand of topicals that we announced were developing with Jack Brewer back in August. The American Premium brand name is valuable internationally, especially with our country’s association with the CBD and cannabis industry. International distribution is desirable, but every country has its unique laws. Thailand for example allows topicals, but CBD ingestible products, like beverages, won’t be allowed for sale until first quarter of next year. You evaluate each country with its unique opportunities, and how scalable it is. In addition to the UK which we have invested significant resources into, we are in discussions about selling our product in Australia, Canada, Columbia, Mexico, and a number of other Asian and European countries.
While focusing on cosmetics and topicals, your Company also has invested significantly into Vanexxe? Where does this product fit within your overall strategy?
The testing and reviews for Vanexxe (www.vanexxe.com) have been off the charts. In all the testing, it has proven to provide a cosmetic solution to unsightly varicose veins. The feedback has been spectacular. The rigorous vetting enabled it to get on Walmart.com, which is a very selective outlet for products. A number of big-box retailers have shown interest and currently in advanced discussions. I envision Q1 2020 to be important for the product, as current negotiations with these channels are pointing to a retail launch date in this time period. The Company is also working on a CBD-infused variation of the product, which has also seen significant interest from the big box retailers betting big on the space.
So what is the 2020 outlook for the Company?
Distribution will continue to be the Company’s primary focus. We have a made a lot of progress and inroads developing a sales network for the Company’s products that I will begin to see activation in the new year. Its something we are positioning to start off right out of the gate with distributors that we have been engaged with on launching new products at the beginning of the year. There will be announcements in January about two products on the beverage side that will propel us well into the new year. We’ll also continue to focus internationally as there is tremendous growth potential in the international markets we have engaged. We look forward to finally shipping out product in the UK in Q1 after a number of production delays; we also anticipate opening up other markets in Europe once we get product moving there. I also want to spend more time focusing on LYNKS Pet CBD Water, our CBD pet water JV with Link Res Pets. This product has created a category on its own, one that has generated substantial interest from large players like Chewy, the largest online pet distribution outlet. I had a great meeting with them at their headquarters in Florida this past October, and I look forward to having an update with them during the first quarter of 2020.
We will also continue our goal of being uplisted. I look forward to completing the audit that we started with Weinberg (www.weinbergla.com) to become fully reporting. We were very ambitious this past year and ran into a lot of road blocks. Some were out of our control some were self-inflicted. Although it has been extremely frustrating, I think the Company will be better suited for sustained long term growth after this year. I certainly appreciate the patience and resilience of the shareholders who have stuck with us, and I believe that next year you will be rewarded for that patience.
July 1st, 2019
Cannabis Hemp Wire’s CEO Profile is featuring the new CEO of BioHemp International, (OTC:BKIT) Daniel Blum. New to the small cap industry, Blum is leading a Company that is focusing on an ambitious rollup strategy of CBD distributors to create a consolidated market leader. Is the CBD sector mature enough for consolidation. Will BKIT be successful? Only time will tell, but here is a transcript of the interview I did with him
Where do you see opportunity in the CBD space?
The CBD space has demonstrated itself as the most valuable market within the rapidly emerging cannabis industry. With a rising number of various CBD products available in mainstream markets, consumers are spending more on CBD products than ever before.
Analysis predict that the majority of CBD product sales will soon occur in general retail stores instead of cannabis dispensaries. When you consider how cannabis has become increasingly integrated into mainstream society, as represented by the number of states that have legalized recreational or medical markets, CBD will on be on the rise for the coming years. In my opinion, because of CBD’s non-pyschoactive properties, has a lot of potential to go mainstream as a substitute to conventional painkillers and medications. That’s where the potential scope of this market lies, and that’s where I see the opportunity
What led you to take this role?
CBD is the future. I have a strong personal interest in CBD space; I understand the benefits of the treatments. When this opportunity (BKIT) presented itself, I seized the opportunity. I’m honored that I was given the task to lead BioHemp International as CEO and become the market leader in CBD distribution. CBD has been validated by the growing number of brands available to the market. There are a number of different CBD infused products available through increasingly diverse retail channels, including Amazon, Sephora and Neiman Marcus. CBD is red-hot in the marketplace, and I’m ready to capitalize off this trend from the distribution side, which hasn’t received as nearly much focus as product creation.
How do you think your prior experience will help you in the position?
I’ve had over 8 years of business development experience across a variety of sectors including fintech, sales and hospitality. I’m leaving a role as a business development executive at Pitchbook Data where I oversaw technology covering the private capital markets, including venture capital, private equity and M&A transactions. Before that, I held positions at Salesforce and Preqin, a private equity investor intelligence company. I also hold a Bachelor of Arts in economics from Union College. My experience in business development and M&A, and record in building and managing relationships with small companies will be an asset as I will be dealing with a lot of smaller, ‘Mom & Pop’ companies that requires a certain touch. My experience will be instrumental as the business plan requires organization and transactional management, as I anticipate a high level of deal flow that will need to be synthesized. My past experience in business development has well prepared me to lead and manage this essential aspect for the Company.
What do you hope to accomplish in your first 90 days?
I want to complete an acquisition or two over the next 90 days. Set the tone for what I want our Company to represent not only to our investors and the market, but to operators in the CBD space. I want to show them what kind of Company we are looking to build, and demonstrate why they want to be a part of it. Working with the operators and motivating them to continue to succeed in the CBD space will be pivotal to my role. I am going to focus on making sure I stay on the pulse of the CBD industry. I want to have the insights of the business so that I create incentives for operators to continue to grow their businesses in a healthy, optimal way that supports core company objectives. I want to be able to effectively motivate operators and their teams, understand—what truly motivates them and identify the next generation of leaders—and determine who is your best investment. And within this scope of focusing on internal optimization, always keeping my eye out for the next potential partnership or merger to further elevate the Company.
What is your long-term goal for BioHemp International?
I want BKIT to be the market leader in CBD distribution. BKIT’s strategy is aimed at becoming the market leader by spearheading the natural consolidation of the industry through the creation of a distribution platform targeted at existing consumer CBD wholesalers and retailers. As the market begins to consolidate, our company is poised to benefit from its first mover advantage. I know there are a lot of competitors in the space, but there isn’t any entity out there that has the aspirations that we do, especially from a consolidation play. We want to be the name synonymous with the leader in the CBD industry. I look forward to executing the plan over the next few years.
May 31st, 2019
On a chilly, late spring afternoon in Midtown Manhattan, I am having a coffee with Ryan Fishoff, CEO of American Premium Water. Correction, I was drinking coffee, Mr. Fishoff was drinking water, which was certainly apropos, considering he is leading one the small cap world’s most polarizing CBD beverage companies. Sitting outside with Ryan, as he prefers to be called, in jeans and bomber jacket, I could see the ambition and agitation in his demeanor. Evoking stylistic and behavioral similarities to the fictional Wall Street character Bobby Axelrod, Ryan is constantly glued to his Blackberry, a rare holdout, which is a testament to Ryan’s personality as much as his desire for utility, as he prefers the ease of the keypad over the status symbol of a iPhone. When I mention to him the irony that the head of a company that prides itself as a leading marketer and brander, he immediately smirks, and responds “that perception right there shows the power of branding, and how people’s perceptions have shifted. BlackBerry is a textbook example of how a brand with a great product failed miserably. If this same phone was branded Samsung, it would be a top seller.” It’s a rather astute analysis from the thirty five year old CEO, who is attempting to steer his company to become the “LVMH” of CBD products. Ryan seems fairly confident in his ability to get his company to such a lofty status. Whether he achieves that goal remains to be seen.
Its clear from spending over an hour with Ryan that he does not lack the energy for the position. Although constantly checking his phone and typing away, Ryan exudes a kinetic energy and confidence that would make even the most hardened skeptic a believer in his vision. Growing up in the consumer products space, and being an ardent student of brands, Ryan is well versed in the history of marketing as Mona Lisa Vito is around the history of cars. From our conversation, its clear that his six and half years at CoBe Capital and his time as an analyst at Liz Claiborne left an indelible impact on him that has shaped his vision for American Premium Water. While far from certain he will be successful, Ryan certainly has made a mark in the small cap space, a sector that he unabashedly wants to get out of “I am tired of the stigma associated with the small cap world. I didn’t fully realize it until I got into it two years ago. After going to a number of small cap investor events, I made a promise to myself that I wouldn’t go to anymore of them. To reach the next level we (the company) has to have loftier ambitions. It’s been over a year and I’ve kept that promise to myself. I had the opportunity to go to the Goldman Sachs Retail conference last fall. It felt right being there. Those are the type of events that I want to be presenting at.” Microcap companies don’t get invited to these conferences, and Ryan is quick to point out that he doesn’t intend to be one for much longer, as he is targeting to uplist to the NASDAQ by 2020. The ambition is admirable, but can he be successful in a 18-month window? The ambition is embodied in the Company’s business plan.
Since becoming CEO in the fall of 2017, Ryan has embarked on an ambitious acquisition strategy. First Gents. Then Worthy. Then dabbling into the world of crypto acquiring the FashionCoinX exchange and the minting of the THRD Coin utility token. This was all on top the Company’s existing development of a CBD infused beverage which was launched at Super Bowl 52. The plan at the time was to build all the brands and business to create an offering of luxury consumer products “across different verticals”, a vision that Ryan had been developing since his time at CoBe Capital. “I had seen first hand how private equity firms created economies of scale across all their businesses, a platform. Regardless of the actual product, if there was a common, unifying theme, in this case premium consumer products, it could be bundled up together, and in my first 6-9 months as CEO, this was the vision of the Company that I was trying to build. Then the CBD boom happened.”
Last fall, with legalization taking both US and Canada by storm, the CBD and cannabis industry was booming. It was at that point that Ryan saw the opportunity to pivot and take advantage of the wave. “It became clear to me this was more than a fad. CBD was real and there were so many studies about the power of this compound. One paper that I read equated it to aspirin. I saw the many different applications for it, and I saw the platform we were building could be pivoted towards premium CBD products in different verticals. We had the opportunity to acquire proprietary hydro-nano technology. This was a very special technology that I knew would differentiate the Company. But I didn’t want to stop there. Many companies were selling CBD products in one vertical. There were also great technologies that no one had heard about because the marketing and branding was sub-par. There were no companies in the market that had multiple CBD brands and products under one platform. These observations became the thesis for the company’s change of direction, and after I came to this realization, it was full steam ahead towards becoming the first luxury CBD holding company, akin to LVMH or Kering Group.”
Ryan led American Premium Water on an ambitious acquisition spree, first acquiring the aforementioned IP of the proprietary hydro-nano formulation that increases the bioavailability of CBD contained in the particles. Next the company expanded to cosmetics, striking deals with Canyon Create a holding company of different CBD and non-CBD infused cosmetics. Vanexxe, a cosmetic that eliminates the sight of varicose veins, does not have CBD in it, but there is one in development, along with Prickly Pear, a CBD/CBG compound that tackles acne. The Company also acquired a CBD topical and balm brand called plant + body essentials. Simultaneously, Ryan looked overseas and saw the untapped potential of the CBD market overseas, setting up a sales office in Europe that in addition to landing a distribution deal, has yielded a partnership with Hanlons Brewery to create CBD infused beer using the Company’s technology. They also came to an agreement with Lynne Franks to develop CBD infused female wellness products.
It’s no wonder that Ryan is continuously typing on his BlackBerry. Managing different teams for different brands across different continents is a challenge for even the most seasoned executive. All these acquisitions look good on paper, but when will they start paying off? Ryan certainly has the bravado to execute these deals, but he also responds to questions of his over-arching ambition with a surprising amount of self-awareness “I can understand those that feel that we’re spreading ourselves too thin, expanding too soon into different product categories and continents. It’s a daunting task to execute and accomplish this. We certainly have been a bit slow out of the gate generating revenue, but I am confident that these acquisitions will begin paying off sooner than later. Being public first before having an established business is the nature of the beast. But I do feel that casting a wide net is warranted to plant our proverbial flag and establish ourselves in this growing industry. Market share and real estate are early mover advantages and I don’t want to forgo those at any cost. In the case of CBD, if you build it, they will come.”
The spate of acquisitions hasn’t slowed Ryan down. In addition to overseeing and growing different business segments, Ryan mentions that he’s engaged in other discussions about partnerships and acquisition opportunities for American Premium Water. His drive to “get out of the micro-cap world” is certainly the driving force behind his aggressive 2020 timeline for uplisting to the NASDAQ, a daunting task for any small-cap company. But Ryan seems unfazed, and as I question him about these plans, the fire grows in his eyes. I can’t decide if its blind ambition or the desire to be right as the driving force behind him, but its clear to me that Ryan will not succeed due to lack of effort. On this chilly afternoon, Ryan brought me a bottle of LALPINA CBD to try. It was clear, with a smooth taste that carried with it a hint of CBD. The question remains will the journey for Ryan and American Premium Water be as smooth as the water? Can he navigate the company from being a fledging micro-cap to the NASDAQ? Ryan seems ready for the ride, and it will be entertaining over these next 18 months how the Company will fair.
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