Apr 28, 2020
Why NeutriSci’s revamped strategy is the company’s holy grail
NeutriSci’s partnerships and equity raises are supporting entry into the edible THC and CBD markets
- The edibles category could be worth more than $4.1 billion in Canada and the U.S. by 2022
- Edibles’ share of the total cannabis market has already more than doubled, from 5.4 per cent in 2011 to the current 12 per cent
- Worldwide sales of cannabis-based products are expected to reach $32 billion by 2022
The growth of the cannabis sector—encompassing edibles—showcases a popular market, especially in Canada, post-cannabis 2.0 legalization. Scott Stewart, Senior Research Analyst at Mintel explains the trend saying, “Legalised recreational cannabis has certainly had one of the greatest impacts on the Canadian market in the last decade. After just one year, the effects of this industry are already far-reaching.”
He adds, “From food and drink, additional markets will begin to experience the ripple effects of the legalisation of cannabis.”
Stewart notes that cannabis edibles are the most intriguing method of cannabis consumption for non-users, piquing the interest of two thirds of non-users. Edibles are an innovative way for consumers to overcome some of the biggest barriers surrounding cannabis usage: the smell, smoke, and related health concerns. As such, new products are allowing Canadians to become more educated and familiar with the benefits of cannabis.
So, when the global cannabis edibles market is expected to generate roughly USD$4.1 billion by 2022, opportunities abound for fast-moving, science-based companies to tap into these markets and uncover alternative ways to manage our health.
A hidden gem with a tiny market cap of $4 million may become a big winner in the CBD arena
This market is ripe for innovation and new products, which is where NeutriSci International Inc (TSXV: NU) comes in with its focus on the production and formulation of clinically proven nutraceutical and cannabinoid products. Founded in 2009 on the principles of research and innovation, NeutriSci is now branching into the high-growth CBD/THC market. Revenue generation for the company includes production, distribution, ingredient sales, royalty, and packaging.
“We’re providing ourselves with the opportunity to be in many jurisdictions via licensing deals, co-branding opportunities, as well as private-label or white-label scenarios.”
- Glen Rehman, CEO & President, NeutriSci International.
When it comes to the company’s products, NeutriSci's Zenstix™ and Dablets™ are quick melting tabs that activate faster when compared with other cannabis edibles with a powerful 10 mg dose. Each stick includes six tablets in a child-resistant package. This product comes in three flavours (lemon lime, iced pomegranate, and raspberry lemonade) and does not contain sugar or artificial flavours.
Rehman explains, “These are sublingual products, which means the active ingredients get into the bloodstream more efficiently than a gummy, a brownie or a patch.”
Strong distribution partners in the THC, CBD space
Last year, NeutriSci joined forces with cannabis product manufacturer, Cyropharm and California distributor, Calyx Brands, which distributes cannabis products to over 600 dispensaries in California, respectively. With Cyropharm providing the manufacturing muscle and Calyx providing the distribution network, NeutriSci plans to launch DabletsTM, ZenstixTM as well as potential other brands currently under development in California, Nevada, Oklahoma and Michigan as well as Canada later on in 2020.
Partnerships provide avenue into THC, CBD space
NeutriSci’s U.S. manufacturing and distribution partner, Cryopharm, will begin initial distribution to more than 90 dispensaries across California later this year with the distribution network expected to grow to over 350 dispensaries in Q2 2020.
Moreover, Cryopharm used NeutriSci’s innovative technology to develop Marbl Melts, an industry-first cannabis-infused product—these are micro-dosed, rapidly dissolvable oral melts infused with THC and CBD.
The company’s core ingredients form the basis of Marbl Melts, which contain a clinically tested dosage providing on set in just minutes, compared with traditional cannabinoid infusion methods that often have incorrect dosages while potentially taking up to 90 minutes to become active.
Rehman notes, "California has always been our primary objective, so now that state production and distribution have begun, we will shift our focus to the production and distribution of our new products into Oklahoma, Nevada and Michigan.”
He adds, “We also continue to expand the research and development of additional new products using our IP, technologies and ingredients to bring new product lines to existing markets and to our existing partner relationships."
Next step: Grow the distribution network and product base
In the belief that expanding its geographical footprint will help insulate it from geopolitical risk, NeutriSci is looking to gain a toehold in as many new markets as possible for its products. In addition to the rapid growth of the CBD space in the U.S. and the ever-growing number of U.S. states with some form of legalized cannabis, Rehman is seeing opportunities in Asia, Europe and South America as well. In particular, he sees CBD as the most promising near-term market.
And those partnerships with Cyropharm and Calyx? He views those deals as the blueprint for NeutriSci’s growth going forward. “We’re providing ourselves with the opportunity to be in many jurisdictions via licensing deals, co-branding opportunities, as well as private-label or white-label scenarios while keeping a lean organization.”
In terms of marketing the products, the company and its partners will be creative on how they get the word out. Their marketing focus as they begin to launch these products in California will be a ground level operation by educating employees about the products’ unique features and qualities at the dispensary level.
It’s also a simple matter of acquiring shelf-space. “If we can consistently get 4-5 products on the shelf, that’s where the opportunity is for us,” says Rehman.
A plan for growth
NeutriSci sees positive distribution, partnership and geographic growth going forward. The company’s technology can potentially be used in other forms of products as well, and the company is actively working on those.
Watch the company’s Market One Minute to learn more about the company’s growth plans.
Attractive investment opportunity in a mega trend
Despite the current volatile market conditions, NeutriSci was able to close an oversubscribed private placement and got some strategic investors out of Asia and Europe on board that see strong potential by investing into NeutriSci right now.
As the CBD market continues to explode, NeutriSci appears well-positioned to benefit from this mega trend. All in all, the future for NeutriSci looks bright.
To learn more about the company’s latest news and corporate profile, check out the investor relations page on their website here.
You can also stay updated with the company by following their social media channels below: