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From alcoholic wine to cannabinoids: one teetotaller’s journey to CBD

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The founder of a cannabinoid drinks company who swapped her evening tipple for cannabis with a twist talks to Cannabis Health.

When Alana Burstein, founder and president of Viv & Oak, gave up alcohol five years ago, she was looking for something else she could enjoy while socialising and unwinding, and came up with the idea to replace the alcohol in wine with something she believes is healthier: cannabinoids.

“I was a wine drinker, and I wanted to mimic that socially shared experience,” she says. “I thought there’s got to be a better way.”

Alana Burstein, Viv & Oak.

“I took my idea, and met some really good people who helped me fulfil what I wanted to do.”

This is how Viv & Oak was born, offering Zinfandel wine, derived from California grapes that have been de-alcoholised and blended with THC and CBD.

“I decided to use CBD for the healthy and therapeutic benefits for the body, to take the edge off at the end of the day without getting you high. We do varieties with THC in it, but the CBD is also doing extremely well.”

The drinks are low sugar and calories, she adds, and the drinks containing THC take around 15 minutes to start having an effect.

Viv & Oak’s products are aimed at women much like Burstein, who want to “take the edge off” at the end of the day, she says.

“We’re targeting women aged 35 to 55 who want to drink less alcohol,” she says. “We’re going after soccer moms, females diving into cannabis over alcohol, especially those with children, dealing with their children at home over lockdown.”

“A lot of women don’t want that high effect, but want therapeutic energy, or for women who had a glass of wine before bed, this is an alternative.

“It definitely helps you sleep, and keeps you asleep, whereas alcohol keeps you disrupted.”

Burstein lives in Toronto, but Viv & Oak is based in California, where she says the market is especially keen to find low-sugar, low-calorie CBD products. If the business operated in Canada, Burstein wouldn’t be able to package the wine as she does in California, she says, where there’s also a much bigger market.

“Cannabis is more acceptable here all round,” she says, adding that she’s currently targeting the market in Toronto, too.

Burnstein would like to see her wines containing CBD in stores within the next year or two, and plans on creating more CBD varieties.

Also on her to-do list is coming up with single serve cup versions for on-the-go customers.

“Everything is always changing, so we’re trying to keep up with demand,” she says. “I’m always working to be more creative and innovative – that’s really important in such a fast-moving industry,”

One of the biggest obstacles, she says, is distribution, and she wants to expand from online-only.

“We see home delivery as being the home run here,” she says.

“Our target market wants a beautifully packaged bottle at the click of a button, delivered to their door when they have their girlfriends over.”

As far as Burstein’s personal journey with alcohol goes – she doesn’t miss it.

“I find this is way better alternative for so many reasons, much calmer and therapeutic, and it gets my creativity going.

“Me and alcohol just didn’t get along, it didn’t work for me. As cannabis started becoming more legal and accepted, I thought, this could be a solution for me and so many others that struggle with alcohol.

“We’re not trying to keep up with wine brands, we’re simply an alternative for people who don’t want to drink alcohol for whatever reason, whether they can’t or don’t want to, or are taking a break from it.”

Listen to a podcast interview with Alana here. 

 

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Big plans afoot at Halifax HQ

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A new British cannabis products firm with a 7,000 sq ft manufacturing plant in Yorkshire has been created through a merger.

Fen Health and Zulize have merged to form Fen Group Ltd, which is headquartered in Halifax.

The company will operate out of a 7,000 sq ft ‘good manufacturing practice-compliant facility. Among its board members is Andy Fennell, former chief marketing officer of drinks giant Diageo, who also previously ran the cannabis incubator, ECH.

Its three business divisions include a “proprietary range of CBD products”, white label manufacturing and “brand licensing in UK and European markets”.

Each CBD brand will “have a specific value proposition, serve a narrow demographic, and have a strong digital infrastructure. Currently two brands in the portfolio with a third launching in August (proprietary sleep solution).”

It will also manufacture CBD products for third party brand owners, providing a “strong bedrock with cashflow and breathing space necessary to nurture the business units that are less cash generative but will have greater long-term capital value”.

It will also undertake licensing of existing brands looking to manufacture in market to UK and European under local standards and regulations.

“With the inevitable complexities arising from the Novel Foods legislation, regional licensing becomes an efficient entry point into the European market,” it said.

Andy Fennell said:  “As the CBD industry matures, the companies that can generate consumer trust for great products and compelling brands will win. I’m confident that FEN group will be one of the winners.

CEO Tom Fennell added: “Cannabis firms are scrambling to become dominant at every link in the value chain, and in doing so, have become average at everything, rather than great at a few things.

“Fen Group will win by knowing more about less. We focus obsessively on what we know we can be great at, and don’t get distracted by the abundance of opportunity in the industry.”

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Presidential glow could boost US cannabis interest

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Cannabis could be a key discussion point in the US Presidential campaign, giving it a much needed publicity boost in the backend of 2020, according to analysts.

Nawan Butt, portfolio manager of The Medical Cannabis and Wellness UCITS ETF (CBDX) says the second half of 2020 is looking positive for the cannabis market as it is set to benefit from a number of “major catalysts”. 

Firstly, he expects cannabis to be a key talking point in the US Presidential election in November.

Through the Democrats, greater long-term support is predicted for either or both of the SAFE and STATES Acts, which will help strengthen medical cannabis businesses in the US. 

In addition to this, multiple companies continue to commercialise their medical cannabis and CBD wellness strategies as key markets and research projects come online.

Nawan Butt said: “Under current regulations it is difficult to measure the appetite for cannabis investments in the United States. Due to their inability to invest in cannabis, US investors have found the next best associated growth vertical to capitalise on this opportunity. 

“Ancillary businesses have seen massive demand as a high growth sector of the economy. Despite the current climate we have seen large equity capital financings close for ancillary plays including Industrial Innovative Properties Ltd and GrowGeneration. Both these financings were completed in excess of their original size, and anecdotally were 5x and 3x oversubscribed respectively. These anecdotes speak to the pent-up demand for growth stocks which is currently unavailable to many investors.”

Commenting on the performance of the cannabis market in 2020, he said the first six months show a great test of resilience for nascent industries in high growth verticals such as cannabis.

But the underlying problem caused by the pandemic is the disruption of business as many industries experiences a stop in earnings with mandated shutdowns.

Falling under the umbrella of medical services, most of the cannabis sector remained unaffected and continues with jobs and earnings growth.

However, within underlying sub-sectors, he stresses a differentiation of performance. Ancillary services combined for the strongest performance as companies with arms-length businesses to cannabis experience excess demand from investors in anticipation of progressive cannabis legislations in the US. 

Pharmaceutical cannabinoids found a boost under the umbrella of healthcare and maintained strong upsides in valuation as the healthcare sector works overtime in an attempt to heal the world. 

Butt added: “There are few public companies operating in the CBD wellness space and their immediate shedding of excesses in response to business slowdown has stabilised valuations. Second quarter earnings results will provide us with a better idea of their earnings growth in times of duress, especially in retail.” 

Lastly, is the medical cannabis sub-sector which experienced difficulty operating in a capital-intensive industry with profitability still a promise of tomorrow? The silver lining here is the rationalisation of industry participants which will consolidate future sales on the basis of more reliable infrastructure.

The Medical cannabis ETF, CBDX, seeks to provide targeted exposure to the rapidly expanding legal medical cannabis industry that is set for further growth as more countries legalise cannabis for medical use. When you trade ETFs, your capital is at risk.

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How two rugby players created their own CBD product

Dominic Day and George Kruis were professional rugby players before they set up fourfiveCBD. After a string of injuries (between them, they’ve had 12 surgical operations) they realised there wasn’t a CBD product they could try that would give them peace of mind…

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Day was injured in 2018, which coincided with CBD getting taken off the banned substances list for professional athletes. He started using CBD for their injuries, but there was one problem.

“We quickly realised there weren’t products out there with the providence and safety profile we needed as professional athletes,” says Day. “We didn’t know how it was made, or anything about the companies making them.”

Day didn’t feel entirely comfortable using the CBD products that were on the market.

“I was nervous before I got tested. I wasn’t 100 per cent confident that what it said on the box would be CBD.

“We saw this as an opportunity. We knew a lot of professional athletes using CBD who would’ve been in same situation as us, so we decided go out and source what we think is the safest product on the market,” Day says.

“It’s important to do what we’re doing so we can give people peace of mind so they can go into their drugs test and feel confident they’ll pass.”

But when they launched fourfiveCBD, there may have been some suspicions at first.

“After we launched the brand, we both got randomly tested three times in a month – you usually get tested two or three times a year, so they were obviously on to us,” Day says.

Now, fourfiveCBD offers a range of CBD products, including topical products and supplements.

Day and Kruis send their CBD to the Banned Substances Control Group (BSCG), where it goes to a lab for independent testing for cross-contamination with all banned substances, including THC.

As well as professional athletes, the pair aim their products at anyone with an active lifestyle, for recovery, but customers have also used them as a sleep aid, and to help with anxiety.

Now, the start-up is setting its sights on getting novel food status, which all CBD companies need by 31 March next year to continue selling their products.

“We have to make sure our brand and products are safe – there’s a lot of work behind it, but we’re confident we’ve done it early enough. We’ve put a number of measures in place to make sure we come out strongest,” Day says.

Day welcomes the regulation, and says it will give the company an advantage.

“A lot of brands are jumping in, thinking this is a good way to make quick money. It’s seen as a booming industry, but it’s also leading to people putting poor products on the market, which is exactly what we’re trying to avoid and have put so much work into.

“I understand some people are annoyed because they think there should be the freedom to have any CBD products on the market, but I think it’s a great move, and we’ll see a lot of poor products drop out of the market.

Since launching two years ago, the brand has secured a spot in 130 Boots stores across the UK. But there’s much more Day and Kruis have their sights on. Another part of their focus is educating people on what CBD is, and what it isn’t.

“There’s a big stigma around CBD, so for us it’s all about educating people in what CBD does and doesn’t do. The key is it doesn’t get you high,” Day says.

“The key is convincing people it’s not going to get them high, so we push people to try it because once they get their heads around it, they can see it does work and it doesn’t get them high.

“Educating people that it’s a safe product will be key to moving forward, and it’s one of the key things in the market now. The brands who are educating people want to be in the industry long-term.”

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