The coolest stock tickers are always in demand. Deep down, many investors like a catchy symbol or funny company name.
Now, one ticker we could all agree is very cool is “BOSS.” When Benzinga heard The Yield Growth Corp. (OTC: BOSQF) had snatched the symbol late last year, we had to learn more about the company.
A few weeks after the stock’s debut, and just days after the company broke the barrier of 10 million shares traded in one week, Benzinga reached out to Penny Green, co-founder, CEO and president of The Yield Growth Corp., and asked a few questions.
Related Link: The Funniest Stock Tickers On The Market
Benzinga: Can you explain a bit what goes into making your products? Can you address the common misconception about cannabis topicals being just regular creams and balms that have some added CBD?
Penny Green: Urban Juve Provisions Inc., a wholly owned subsidiary of The Yield Growth Corp., is an Ayurveda-inspired wellness line of topical and therapeutic products for both men and women. Our products contain cannabis sativa hemp root oil that is produced using our patent-pending extraction method.
The extraction method uses new technology to access on a commercial scale the 5,000-year-old principles of Ayurvedic medicine. Hemp root oil has been used in Ayurvedic formulations for thousands of years, but Urban Juve is the first company that we are aware of to use the ingredient in cosmetic formulations.
While there are products that already use hemp seed oil, hemp root oil has different properties — it is much lighter and there are terpenes present that combine with other plant terpenes to allow better absorption by the skin.
BZ: How has the growth in cannabis’ popularity changed the trends among consumers regarding wellness products — both cannabis-infused and “traditional” ones?
PG: In general, wellness itself is a major trend — and the more natural the products are, the better. People are looking for wellness products with simple ingredients that they can say the name of and ideally that cater to both the body and mind.
Cannabis’ connection to wellness actually began pre-legalization. It has been used in products like candles, perfumes and soaps. Post-legalization, the trend is only getting bigger. We’ve seen the demand for CBD-infused topicals begin to grow, [and] the Brightfield Group estimates that the hemp-CBD market could hit $22 billion by 2022.
Urban Juve’s formulations are based on Ayurveda, a 5,000-year-old ancient science that stresses the importance of healing and natural ingredients. Cannabis and hemp are key ingredients in Ayurveda. We believe that this trend is actually a wellness movement and that cannabis and hemp will play key roles now that they are finally becoming widely available.
BZ: What opportunities do you expect from the legalization of hemp and CBD in the U.S.? Any plans you can share on the distribution of Urban Juve products in the U.S.?
PG: The U.S. will be a major market for these products, and while the passing of the Farm Bill legalizes hemp, cannabis itself and cannabinoids like CBD are not consistently regulated across state and country lines. However, we have a strategy to handle these discrepancies.
The Yield Growth Corp. also owns UJ Topicals, which has signed a deal that gives us the opportunity to manufacture and distribute a THC- and CBD-infused line of our topicals to a network of 400 stores in Oregon. We’ve developed Urban Juve’s products to be well-suited to stand on their own as strong products or to be infused with CBD and THC, which gives us the ultimate flexibility.
BZ: A lot of cannabis companies are partnering with big consumer goods names for edibles and beverages. Will the wellness and topicals industry head in the same direction, and which big companies do you think could be interested in entering the cannabis wellness products segment? Again, anything you are working on in this area and can share with our readers?
PG: There has been a lot of interest from big companies like Constellation Brands, Inc. (NYSE: STZ), Molson Coors Brewing Co (NYSE: TAP) and The Coca-Cola Co (NYSE: KO). Companies like Sephora and Estee Lauder Companies Inc (NYSE: EL) have also begun exploring the market.
Both Procter & Gamble Co (NYSE: PG) and Johnson & Johnson (NYSE: JNJ) are looking into the space but have not yet entered.(Author’s note: while Johnson & Johnson has not yet formally entered the cannabis market, Canadian cannabis company Avicanna Inc. did manage to get accepted into Johnson & Johnson Innovation’s JLABS @ Toronto, the pharma giant’s incubator.)
But as clinical trials continue to substantiate the health benefits of cannabis, there will be growing demand internationally for wellness-focused consumer products like creams, drinks and supplements. However, entering the space directly for these companies in the way that we are can be much more challenging than it would be for a smaller, more nimble company like ours.
I believe that the benefits definitely outweigh the challenges — topicals and other value-added products have much higher profit margins than just basic dried flower.
The Yield Growth Corp. has also recently purchased eight wellness beverage formulas that are designed to be infused with CBD and THC, as well as a capsule product intended to treat hangovers. Like Urban Juve’s topical products, these formulations were developed in India based on Ayurvedic medicine using botanicals, fruit extracts and spices.
Canaccord Genuity Group Inc (OTC: CCORF) reported that cannabis- and CBD-infused beverages have the potential to outperform cannabis products and that they could account for up to 20 percent of the market for cannabis-containing consumables by 2022.
BZ: What is your take on the popular opinion that for Canadian cannabis companies to survive, exports and international distribution is the only way?
PG: I wouldn’t say that there is a single route to success for Canadian companies, but I do believe that to survive in the growing and competitive cannabis market, companies are going to need more than just a cultivation license. Being just a cannabis grower is not necessarily the strongest growth strategy. [It’s the ability] to create value-added products like topical, beverages or even something like pet products that will produce the highest margins and brand loyalty.
International distribution can also be a strong route to growth and success, and we have been approaching this in a number of ways. The Yield Growth Corp. has aligned with Crop Infrastructure Corp. (OTC: CRXPF), which has licensed the distribution rights for our topical products in Italy and the U.S. The Yield Growth Corp. subsidiary UJ Topicals has also secured the opportunity to launch its products through a network of 400 retail stores in Oregon.
BZ: What are the main challenges in developing a cannabis wellness product? What do you think is more difficult to develop: a skincare product or an edible?
PG: The real challenge is having a product that stands alone and is amazing even without cannabis. If it’s topical for instance, the process should follow that of developing a normal topical product, which includes going through standardized testing, identifying product shelf life, ensuring there is no negative reaction to the product packaging and determining provincial and national guidelines around the product.
Once you’ve developed a phenomenal standalone product, then you can look at adding cannabis to it. However, once you add the cannabis, communicating its benefits internationally and even across state lines in a compliant way is extremely important.
Regulation is not consistent across jurisdictions for products containing CBD and THC. So what we have done is develop our products with hemp root oil that alone has tremendous health benefits and is also very compatible with cannabis infusion.
It is very important to our team to stay above board and adhere diligently to regulations. It’s extremely complicated and the law changes almost on a daily basis, which is a double-edged sword, because while it makes things more complex, it also means that there are tremendous opportunities as new markets open up to these products.
Alex Oleinic contributed to this report.
Photo courtesy of The Yield Growth Corp.
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