- The global wellness industry was recently valued at USD$4.2 trillion and a shift towards personal health care is one of the big drivers, with 60 per cent of the global population using alternative therapies
- Relevium Technologies has shown an aptitude for identifying and acquiring the winners in the wellness space, building diversified revenue streams
- Recent research into the role of the endocannabinoid system is creating a new opportunity for innovation in product development for the health and wellness market, which is right in Relevium's wheelhouse
The mindset consumers have on health and wellness is shifting with more people putting their wellbeing at the forefront. This industry is all-encompassing from physical to mental health which includes exercise, food, being environmentally conscious, continually yearning for stress relief and increasing overall happiness. It’s this mindset that is beginning to permeate the global consumer.
It seems as though society is going back to their roots with people gravitating towards yoga, mindfulness and alternative therapies. These holistic practices originated 5,000 years ago with a focus on the importance of balance within the whole body and the interconnection of mind, body, spirit, and environment.
Today, the wellness economy is growing in tandem with the expanding consciousness of consumers embracing the personal health lifestyle.
A 2018 study by the Global Wellness Institute found that the wellness industry was valued at USD$4.2 trillion and now represents 5.3 per cent of global economic output. And driving that growth is a paradigm shift in people’s daily decision-making where wellness is no longer a luxury, but a dominant lifestyle choice. About 60 per cent of the global population reported using some form of alternative therapy and this market was reported to be worth USD$59.76 billion in 2018.
This Big Bang growth has seen constellations of new brands and companies emerging to try to fill the ever-expanding space. How can investors who want to capitalize on the wellness revolution find the right investment vehicle while inoculating themselves from financial risk?
"The company will move from being an operator-developer of businesses to more of an investor and developer of businesses that we can then spin out and dividend to shareholders along the way."
— Aurelio Useche, CEO and Director, Relevium Technologies Inc.
Relevium Technologies: A track record of picking the winners in the wellness space
It helps to find a company that has a track record for picking the winners in the wellness space. Montreal-based Relevium Technologies Inc. (TSX.V: RLV) has a laser-sharp focus on the acquisition of entrepreneurial e-brands and technologies in the health and wellness industry. Its area of interest includes nutraceuticals, sports nutrition and nutri-cosmeceuticals and medical cannabis.
Given the size and continued growth of the market, Relevium is setting itself up to be a leader in the industry. The company specializes in acquiring entrepreneurial e-brands with a portfolio approach and building value through optimization and investments on brand equity. That provides a wide range of revenue streams under the collective Relevium umbrella.
The company recently expanded its global footprint when Relevium’s wholly-owned subsidiary BGX E-Health LLC. reached a deal with Innova Health Care of Saudi Arabia to supply over CAD$1 million in generic formulations. Aurelio Useche, Relevium Technologies’ CEO and Director says the contract is the first of many of its kind for the company.
"It's pretty exciting because it's outside our traditional online model. With this contract, we get a bit of diversification of risk and an opportunity to enter a very exciting and lucrative market."
Useche articulates that the deal was a result of the company's decision to integrate all its manufacturing by acquiring a Montreal-based manufacturer. The move allows Relevium to offer better, higher quality products at a lower cost.
"This vertical integration increases our gross margins by over 30 per cent, depending on the product, and gives us more ability to provide value to the end consumer in terms of price and quality.” Mr. Useche further states "We're seeing areas of low competition in high demand, so we expect that launch over the next few months."
(BGX) has dozens of products being sold on Amazon with more planned expansion in the pipeline. "We're looking to launch a couple of new products through Amazon in Canada," states Useche. Furthermore, the company also just announced that it has launched a new line of organic hemp products under the brand Leefy Lyfe™ on Amazon for the US market, with additional products planned for early 2020.
The evolution of the endocannabinoid system and how Relevium is well-positioned to capitalize on it
Over 3,000 years ago in India, Bhang, an edible cannabis mixture, was used to help ease anxiety. In fact, during the 19th-century, cannabis extracts gained widespread popularity throughout Europe and the Middle East for medicinal purposes. It wasn't until the 1930s that cannabis became illegal and demonized as the U.S. became concerned with the dangers of abuse surrounding consumption.
Today, with the legalization of cannabis, more and more research around the health impacts of CBD are coming into effect. One area that has sparked particular interest is the endocannabinoid system (ECS).
The ECS is a complex cell-signaling system identified in the early 1990s by researchers exploring THC, which is, perhaps, the most well-known cannabinoid. The system is a vital component in brain development that all humans are born with, whether they've been exposed to cannabis or not. Research shows the ECS works through a series of receptors and enzymes to help people respond to their environment and maintain a wellness balance. It helps relieve stress and pain and balances the body’s response system.
Therefore, if we think about the body like a machine the ECS would be in charge of maintaining a healthy and balanced machine. However, over time, poor maintenance and aging can cause a machine to wear out. This is where cannabis comes in — it has shown potential to be used as a cannabinoid to power-up, refresh our body and help maintain healthy levels. Research shows that when cannabis binds with receptors, it improves their functionality and restores balance.
For example, seizures are caused by an increase of electrical activity in the brain that causes the body to shake violently. CBD has shown potential to reduce seizures in patients who suffer from epilepsy by subduing the brains' reaction to the intensified signals. Recently, the FDA approved, Epidiolex, a CBD-derived medicine, that helps treat people from ages two and up with epilepsy. This is just the beginning of cannabis-derived medicine being used at a mainstream level.
Relevium is well-positioned to capitalize on this recent research into the role of the ECS, as this will create a new opportunity for innovation in product development for the health and wellness market.
With outstanding biopharma expertise, agricultural and logistic advantages through vertically integrated business plans and ground-breaking product formulations, Relevium is in a unique position to become an industry leader in the fast-expanding endocannabinoid space. The company's second wholly-owned subsidiary Biocannabix Health Corporation Inc. (BCX) focuses on nutraceutical and medical foods products infused with targeted cannabinoid formulations for paediatric and geriatric medical applications.
Relevium's BCX combines leading biopharma expertise, agricultural and logistic advantages of Colombia and trusted brand status with a clinical validation process for phytotherapeutic medical products aimed at paediatric applications. With scientific and administrative offices in Montreal, BCX has vertically integrated operations in key markets around the world, including Canada, Colombia and Germany.
Further, BCX has a distribution and compliance partnership in Germany and cultivation and extraction operations with an initial 20 hectares located in Cali, Colombia. The company has also acquired its first asset under BCX when Relevium received the exclusive license of IP from Cannakids for the Canadian market.
Relevium is also working on establishing a new, publicly-traded company through a spin-out of BCX that would create an independent, publicly-traded and vertically-integrated biopharma business focused on paediatric endomedicine with expected dividends for shareholders.
Experienced entrepreneurial team makes Relevium stand out in the wellness space
Useche says another advantage Relevium has over its competitors is a knowledgeable and entrepreneurial management team with experience in capital markets as well as outstanding scientific backgrounds.
"It's always about the team. It's all about the people that are in the organization," says Useche.
"We have a new CFO in place who has a lot more capital market experience and that's going to be key given all the transactions that we’re setting up for the new year."
Relevium has made a few changes to beef up its entrepreneurial muscle, including appointing Mark Billings as CFO for both Relevium and Biocannabix Health Corporation in November. Billings is an experienced executive Chartered Financial Analyst and a graduate of the Harvard School of Business. As an investment banker, he's raised hundreds of millions of dollars for small-cap companies.
Additionally, their Director, Dr. Tina Sampalis, Founder and President of the Agoo Children’s Health and Wellness Centers and President of Vanguard Strategic Consulting. Dr. Sampalis is also a leading researcher known for her work in the development of evidence-based nutraceuticals.
Useche affirms that having such a highly experienced, well-rounded management team, from both scientific and promotional angles is a key differentiating factor that separates the company from its peer group and sets Relevium up to be successful in a competitive market space.
"We definitely have an entrepreneurial team, which is highly sought after in this space or any space," Useche.
Watch for shift as Relevium enters 2020
The wellness economy grew 6.4 per cent annually between 2015-2017, nearly twice as fast as global economic growth at 3.6 per cent according to the 2018 Global Wellness Institute study. That kind of growth offers big potential returns for investors in 2020.
Looking ahead, Useche says investors should watch for a shift in Relevium's model in the next few months that will underline how the company is transforming to capitalize on the hyper-expansion of the health and wellness space.
"The company will move from being an operator-developer of businesses to more of an investor and developer of businesses that we can then spin out and dividend to shareholders along the way," explains Useche.
"That's a shift that's going to be become self-evident over the next couple of months and people should watch for it."
For more information and future updates click here.