Our Business Model Provides Value-add Opportunities for Licensed Producers – Cannabis Hemp Blog
Xanthic Biopharma (CSE:xTHC) CEO Tim Moore discusses Xanthic Biopharma’s partnership with ABH Pharma and how they are adding value for consumers with CBD products. He also addresses the challenges US companies face when entering the Canadian market.
In the interview below, Moore outlines his company’s business model and the steps Xanthic Biopharma plans to take in the near future.
Below is a transcript of our interview with Xanthic Biopharma CEO Tim Moore. It has been edited for clarity and brevity.
Investing News Network: Please give our investor audience an overview of Xanthic Biopharma and its offering of CBD and THC-infused products.
Xanthic Biopharma CEO Tim Moore: Xanthic is a technology-based company. We don’t grow cannabis or process it for extracts. However, we partner with companies that are interested in adding value to their cannabis outputs by converting them into value-added consumer products, which helps insulate them from the fluctuations in commodity pricing. For example, a $4 bottle of ketchup that sits on the shelf in a store will not be influenced by the price of tomatoes because it’s in a form that is convenient, profitable and easy to use. The same applies to our products.
We take cannabis and convert it into a non-combustible, accurately dosed, highly bio-available product, whether it’s THC or CBD. This is basis of our business model.
INN: How has Xanthic been developing its presence in the North American cannabis industry?
TM: We started in the US because our product form was not — and still isn’t — legal in Canada. We’re focused on Colorado, Oregon, Washington, Nevada and California, where CBD and THC products are available across both the medicinal and recreational markets.
We have formed partnerships with a number of companies, our equipment has been installed and we’re on the cusp of shipping products to dispensaries. This has allowed us to fine tune our business model.
We have upgraded the quality of our products and have increased our portfolio of offerings by tapping into an interest for products that we hadn’t been developing.
In Canada, the regulatory environment is different than in the US and we have altered our business model slightly to comply with these regulations. However, we still want to partner with Canadian companies. We’re currently in discussions with a number of licensed producers (LPs) who believe that edible cannabis products will be legal in 2019, and that there will be a compression on prices. They understand that in order to preserve profitability, they will need to find a way to add value to their products. People do recognize how a product is branded and they recognize the value of converting a product into another form so that it garners additional value.
INN: Please tell us about the recent partnership with ABH Pharma.
TM: ABH is a world-class dietary supplement manufacturer specializing in powdered products. The partnership is a continuation of our Xanthic CBD water project, where we have a 45-percent stake in the Xanthic beverage business. Xanthic Beverages has launched Xanthic CBD water and has partnered with a PepsiCo-licensed (NYSE:PEP) bottler for production and initial distribution. This product will be shipped to grocery stores, convenience stores and gas stations in the Pacific Northwest.
We wanted to find additional products and partners that we could expand with, and we have been working on finding a supplier of food-grade powder products for our THC and other dispensary products. Our relationship with ABH progressed to a point where we negotiated a deal with them. ABH will offer a number of their nutritional supplements, protein shakes and other products containing CBD to their existing customers across brick-and-mortar stores and on a number of eCommerce websites using the Xanthic trademark.
This partnership takes our technology out of the dispensary business and into the general retail market where there is a significant demand for CBD products and the benefits CBD offers. Most consumers do not have access to the CBD products they want and have to go to dispensaries, the gray market or settle for low-grade products to get what they want. We’re providing a solution to this problem by offering world-class nutritional supplements that contain CBD.
INN: How does the agreement with ABH Pharma fit into the company’s long-term plans?
TM: We’re a technology-based company and our partnership with ABH is harmonious with our mandate. In the highly regulated THC market, we have to work within that construct. This means that we have a particular way that we navigate this space, strike agreements, license our technology and branding in order for our LP partners to create and add value to their consumer products.
Our relationship with ABH is different from the agreements in the licensed dispensary universe, but it still represents the addition of Xanthic IP to add value to our partner’s products. In a mature nutritional supplement market, ABH now has something that other companies don’t and we believe this fits exactly into our business model. We’re looking for other opportunities in which to replicate this with another company. We want to help set up our partners to be above the rest of the market by giving them a competitive advantage.
INN: What other upcoming catalysts can investors expect for Xanthic Biopharma?
TM: We will be making various announcements regarding the start of production, the sale of products, adding additional partners and entering into new markets and jurisdictions. We are looking forward to the growth of our business and to continuing to add value to our shareholders.
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