- The cannabis sector is rapidly evolving - consumers want readily available products that maximize hemp’s wellness potential
- To gain traction quickly in the cannabis/CBD space, companies must have experience with the mainstream market and supply chain as well as niche cannabis expertise
- GABY Inc. is one company that’s able to meet this demand through a portfolio of graduated hemp and cannabis-focused wellness brands sold in both the licensed cannabis and mainstream grocery channels
Driven by consumer demand, cannabis (including hemp-derived) products are becoming more integrated into the market than ever before. Although many people associate these products with dispensaries and cannabis-specific retailers, the future of the market is all about the full integration of hemp and cannabis products, both psychoactive and non-psychoactive, into consumers’ everyday lives.
What’s more, these products are compatible with an equally booming sector: health and wellness. Cannabis, hemp and CBD are all a natural fit with the holistic, plant-focused consumer goods that continue to increase in popularity. Hemp’s high-quality protein satisfies another exploding trend: environmentally friendly, plant-based proteins.
With these factors in mind, the sector’s rapid growth will necessitate brands that can compete in, and adapt to, this burgeoning sphere. This means that the cannabis industry will need to evolve along with demand, with a mature supply chain and business practices that are sophisticated enough to keep up with consumer expectations.
Taking all of this into consideration is GABY Inc. (CSE: GABY, OTCQB: GABLF), a U.S.-focused Consumer Packaged Goods (CPG) company operating in California’s regulated cannabis sector, as well as the mainstream channel across the rest of the United States. Mainstream expertise and the ability to compete in the growing cannabis and wellness sectors were key factors in the creation of GABY’s line of retail-ready products.
The right plant for GABY’s vision
Founded by sisters Margot and Gabriella Micallef, the company got its start as Gabriella’s Kitchen, making pre-packaged, plant-based entrees for the health- and environmentally- conscious consumer. After Gabriella was diagnosed with lung cancer, both sisters looked into cannabis as a robust alternative treatment to lessen the pain that came with Gabriella’s illness and to calm her fears and anxiety when doctors failed to give her hope.
Tragically, Gabriella has now passed away, though she enjoyed five more years than doctors predicted with a very high quality of life despite her advanced diagnosis. Co-founder Margot Micallef credits Gabriella’s extended prognosis partially to cannabis and their shared ethos of holistic, healthy living.
Margot Micallef explains, “While some people see cannabis as intended for nothing but intoxication and aren’t interested in it, I have come to realize that cannabis in all forms is a wellness plant. Frankly, I don’t think a company can call itself a wellness company without some focus on cannabis – we see its potential, and thus, it has become the cornerstone of our vision and business plan.”
Moreover, Micallef sees an inevitable narrowing of the gap between mainstream and cannabis-specific retailers over the coming years. She notes, “You may recall alcohol, once sold only in government-run liquor stores, was pushed into grocery stores, convenience stores and even drug stores by consumers, who want convenience above all. Consumers will do the same to cannabis, and it will happen even faster, given how they have embraced this plant.”
“While not fundamental to our business plan, we see, eventually, everything will be sold in the mainstream channel, and we are very well-positioned to capitalize on that. The alcohol industry is a model for that theory. It will be key that cannabis companies know how to service mainstream retailers when that happens.”
“You have one shot with a lot of these large chains, and we have a track record of successfully servicing them for many years. The reality is, most cannabis companies will not be able to make the adjustments necessary to meet the demands of mainstream retailers – many cannot even effectively service licenced cannabis retailers who are much more lenient.”
Although there are still a number of fundamental developments that will need to occur before cannabis is sold in local grocery stores, Micallef is correct that the gap between mainstream and licenced-cannabis retailers is already narrowing – already mainstream retailers are selling non-psychoactive, CBD products. With the mainstream channel emerging as an essential partner for the distribution of these products, mainstream knowledge and experience are crucial. This is one of the many competitive advantages GABY brings to the CBD and wellness spheres.
A range of products for the retail space
When it comes to GABY’s range of products and brands, the company makes the whole cannabis plant available to consumers, a strategy that’s unique among its competitors. Starting from the premise that scientifically, marijuana and hemp are the same plant, known as cannabis sativa, GABY offers products from every aspect of the plant.
In fact, the difference between hemp and marijuana is predominantly the quantity of THC found in each plant - the latter being high, and the former, low to virtually nil.
The bulk of GABY’s business comes from the licensed cannabis channel - the company sells its proprietary brand of boutique cannabis flower and several value-added products under the Sonoma Pacific™ brand, and artisan infused edibles through the Lulu’s Botanicals™ brand.
GABY also sells CBD edibles under the Lulu’s™ brand and supplements under the 2Rise™ brand in aggregate of over 300 independent, natural and organic stores throughout California and online — take a look here. Many of these natural and organic stores are aggressively moving into the CBD edibles and supplements space due to the consumer demand – a demand few are as well-positioned as GABY to capitalize on.
GABY’s legacy health food line of hemp products, known as Gabriella’s Kitchen™, offers a number of frozen prepared meals, all of which are fortified with parts of the hemp plant which have been legal and safe to use in food products for over a decade. These hemp products offer both consumers and retailers a non-controversial way to move into the hemp space. These products also serve as placeholders for GABY – they allow GABY to maintain a relationship with over 3400 major banner stores, including Whole Foods, Sprouts, Publix, Vons and others while awaiting their acceptance of CBD and eventually THC ingestible products.
That said, GABY recently launched a CBD skin care line, which is expected to soon be offered through tier one mainstream retailers and independent and natural and organic retailers. The acceptance of these products is indicative of the direction retailers are going – CBD infused skincare products or topicals present first-time users with a low-risk opportunity to try out the many benefits of the cannabis sativa plant without any risk of an unpleasant experience.
For GABY, cannabis and wellness are two sides of the same coin. Micallef notes, “We embrace cannabis because it has many powerful, life-enhancing properties.”
Micallef continues, “by using the whole cannabis plant as described, we are able to sell into multiple sales channels with a graduated portfolio of disruptive products and meet the consumer wherever, however, and whenever they want to consume cannabis and in whatever form: hemp, CBD, Marijuana.”
Mainstream experience, niche expertise
Today, GABY is an innovative house of brands with a multichannel sales strategy, selling a graduated portfolio of products in the licensed cannabis channel, the independent, natural and organic channel, and the mainstream grocery channel. Its start in the consumer-packaged goods sector enabled GABY to enter the cannabis industry with the professionalism and experience that this burgeoning market deserves, but unfortunately is often lacking.
These lessons from the mainstream market would prove equally valuable in the cannabis world.
While GABY is focused on developing brands in the cannabis sector, it started by first developing the infrastructure needed to ensure speed to market and consistently high-quality products. GABY bought a manufacturing and distribution license, moved into cultivation, and eventually built a sophisticated procurement team to ensure consistent availability of the best possible cannabis.
The end goal is control of its supply chain and infrastructure — ensuring the company always has access to quality flower, extractions, consistency of dosage and access to the retail market - in a supply chain that, due to the industry’s emerging status, is still immature and at times, unreliable. Taking its cue from the mainstream CPG world, controlling the process from start to finish enables GABY to stand out in the cannabis world. “We understand that it’s important to have a consistent, reliable product, deliver on time, fulfil the whole order, and replenish consistently,” says Micallef.
“Those are some things that we learned in the mainstream space; how important it is to partner with our retailers.”
Just five or ten years ago, a cannabis sector functioning at this level would have been unimaginable. However, driven by consumer demand, evolution and legalization have occurred at an unbelievable pace. Cannabis is poised to be a key player in the mainstream health and wellness market of tomorrow, and companies will need know-how in both of these sectors to rise to the top.
Thanks to their hard work and competitive combination of experience, GABY can now claim over $45,000,000 raised, 3,400 mainstream retail locations, 218 licensed retail accounts, five proprietary brands, 25,000sq ft of cultivation, processing, packaging and distribution facilities. Investors have a lot to look forward to as GABY Inc. cements itself into the health and wellness, as well as cannabis and mainstream markets.
To learn more about the company and its associated brands, click here.