Surging Demand For Premium Health Products Driven By New Global Focus on Wellness

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Amid the panic caused by the ongoing health crisis in 2020 has been a serious focus on heightened wellness and immune support. This has been reflected in a significant spike of sales in vitamin and mineral supplements1 during the health scare.

Ultimately driven by the CV19 spread, this has resulted in a 12.1% reported sales increase2 for the supplements industry—the largest growth year since 1997.

This rise coincides with the momentum of another factor in the sector, which is the still-recent introduction of hemp products onto retailers’ shelves in the US and around the world.

Consumer acceptance for these hemp-infused products has exploded into the mainstream, including major retailers such as:

    • CVS Pharmacy – CVS Health Corporation
      – Began carrying hemp creams and salves in 800 stores across eight states3
    • Walgreens – Walgreens Boots Alliance, Inc.
      – Offers hemp creams in 1,500 locations across the country4

But as the quantity of products available have ballooned, QUALITY has become the industry’s biggest concern.

Poor quality and counterfeit products with false claims have saturated the market with low-quality, non-compliant products—creating a BIG problem of trust and safety.5

However, this hasn’t pushed people away from the sector, but rather it’s boosted demand for PREMIUM products, that discerning consumers across the globe are willing to PAY MORE for.6

Consumers willing to buy products to increase their wellness want what’s best for their body—the best ingredients, the best quality, and the best results.

Both consumers and retailers alike want products that meet the highest standards in safety, quality, and consistency.

We’ve identified an emerging leader in the sector that has invested heavily into regulatory compliance and is focused on compliance with any potential FDA or international regulations.

With products sold in all 50 US states, and available through 4,000 retailers and counting, HempFusion Wellness (TSX:CBD.U) is making a strong case that it’s positioned to be an industry leader in quality, consistency, and surpassing its peers by focusing on the meeting the highest standards in regulatory compliance.

HempFusion’s Unmatched Quality Standards are Opening Unique Doors in the CBD Industry
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Meet HempFusion Wellness:
The First EVER US Hemp Company to IPO on the TSX

Colorado-based HempFusion Wellness Inc. (TSX:CBD.U) is a leading health and wellness hemp company, built to utilize the power of whole-food hemp nutrition, by specializing in full-spectrum hemp extract distribution and development—and using a proprietary Whole Food Hemp Complex™.

To date, the company has successfully developed out their leading brands: HempFusion, Probulin Probiotics (one of the fastest-growing probiotics companies in the US), Biome Research, and HF Labs.

Now HempFusion (TSX:CBD.U) is set to debut on the Toronto Stock Exchange (TSX) as the first ever US-based hemp company to list on the main Canadian exchange.

In October, the company filed a preliminary prospectus for a proposed initial public offering (IPO) of common shares for gross proceeds of up to $7 million and units for gross proceeds of up to $10 million at a price between $0.90 and $1.35 per share.7

HempFusion Wellness Inc. (TSX:CBD.U) already distributes products to approximately 4,000 retailers across all 50 states of the United States and select international locations.

The company currently has 46 SKUs, including tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, doctor/practitioner lines, and an additional 30 products under development.

Based on the company’s proprietary Whole Food Hemp Complex™, HempFusion’s hemp-infused products are available both in-store and/or by visiting HempFusion’s website8 or the Probulin website. www.hempfusion.com or www.probulin.com.

After launching in 79 stores on June 1 through Publix supermarket, HempFusion products scored in the top 10% of hemp-infused and new products—and are now set to launch in 798 stores.

7 Reasons Why HempFusion Wellness Inc. (TSX:CBD.U) Products Are Winning the Hemp Market Race

    • Massive portfolio of health and wellness product lines that target specific health needs, including sleep, stress, and energy
    • Meets highest regulatory standards
    • Proprietary Whole Food Panoramic Full-Spectrum Hemp Complex
    • Extensive line of probiotics and digestive enzymes
      – Caters to a broad set of consumers and daily care, women’s and children’s health, and total care
      Probulin experiencing record sales during pandemic
    • Available at 4,000 retailers and counting, across all 50 US states and select international locations, as well as online
    • FDA Drug Listed OTC topical products that meet compliance standards of Big Box retailers (FDM)
    • Designed and marketed to target several substantial markets, including:
      – Global topical pain relief market – $13.3 Billion10
      – Global dermatitis drug market – $6 Billion11
      – Global beauty, personal care, and anti-aging market – $1.08 Trillion12
    • United States (alone) first aid ointment products market -$650 Million13
    • Global probiotics market – $7 Billion14

Hemp’s Grand Entrance into the BIG BOX
Food/Drug/Mass (FDM) Market

The hemp market is being primed for a major retail boost, due to changing regulation that could result in a breakthrough into the massive Food/Drug/Mass (FDM) Market—also known as BIG BOX stores.

The ball is already rolling, beginning with last year’s announcement from national pharmacy chain CVS announcing sales in 800 stores across eight states of hemp-derived creams, sprays, and salves.15

This was quickly followed up by Walgreens,16 Rite-Aid,17 and The Vitamin Shoppe18 each announcing their own plans to sell hemp-derived products within the next month.

Big players in the hemp space, such as Charlotte’s Web Holdings, have further helped the cause by executing actions to support regulatory progress at the federal and state levels in the United States.19

In that company’s Q3 2019 Earning release, Charlotte’s Web CEO Deanie Elsner stated:

“In an increasingly crowded, noisy and confusing [hemp] market, brands matter… Consumers are becoming more informed about product ingredients, production quality, and variances between [hemp] isolate and full spectrum hemp extract efficacy. The majority of our FDM channel partners only sell [hemp] topicals while awaiting legal and regulatory clarity from the U.S. Food and Drug Association (“FDA”) … We remain hopeful that broad political support will help drive quick regulatory resolutions in 2020.”

In September of 2020, the FDA and members of the US Congress introduced legislation to make hemp lawful as a dietary ingredient in supplements.

The proposed H.R. 8179 would legalize hemp and other ingredients derived from hemp for use as a dietary ingredient in a supplement—provided the dietary supplement complies with existing requirements of the Federal Food, Drug & Cosmetic Act (FDCA).20

Charlotte’s Web proceeded to use the sector’s momentum in 2020 to acquire Abacus Health Products for C$99 million to gain entrance into what it believes to be a $10 billion market.21

That market is Over-The-Counter (OTC) topical products that combine active pharmaceutical ingredients with hemp extracts—for pain relief and skincare.

The name of the game is TRUST, and Charlotte’s Web was further chasing the trust of the market through the acquisition.

It’s in this market where HempFusion Wellness Inc. (TSX:CBD.U) excels, and is poised to dominate with a wide range of fully-compliant products.

HempFusion owns a strong portfolio of brands that are already widely distributed to all 50 states in the USA, and are also part of a multi-national growth strategy.

The company’s diverse product line helps to differentiate HempFusion from its competition, through a portfolio that includes 46 products that are on the market.

These include condition-specific products for sleep, stress, and energy. HempFusion’s topical products line includes creams and balms that specifically target acne, anti-aging, sports pain relief, eczema relief, wound care, and more.

Currently these products are sold in approximately 4,000 retail locations and outlets, including Amazon, Whole Foods, Sprouts, Vitamin Shoppe, Fresh Thyme Market, and a MAJOR unannounced national FDM retailer to come.22

HempFusion’s Unmatched Quality Standards are Opening Unique Doors in the CBD Industry
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We’re Now Witnessing the EXPLOSION of the Hemp Industry

Bolstered by an influx of “CV19 Commencers”, use of hemp-infused products is exploding in the US market—recently adding 9 million new users in just the last six months.23

That represents almost one in four of all US hemp consumers.

And it’s quickly becoming BIG business, as the US hemp market is projected to reach $4.7 billion in sales in 2020, growing 14% from 2019 sales of $4.1 billion.24

Globally, that growth is even stronger, with the global hemp oil and hemp consumer health market size projected to expand at a CAGR of 25.6% through 2027 to US$123.2 billion.25

This is why securing compliance certifications within the industry is incredibly important, as they build trust within the retail market that is rapidly shifting towards hemp acceptance.

This is why top hemp company Charlotte’s Web bought Abacus Health Products for C$99 million—to avoid going through a lengthy certification process.

HempFusion Wellness Inc. (TSX:CBD.U) is rapidly becoming a serious contender in the hemp-infused products space, having already jumped through all of these hoops to become compliant with anticipated regulations, investing heavily to meet these standards, more than most competitors in the space.

As of June 2020, HempFusion held the second-largest cash position in the hemp sector, with over $18.3 million in cash and an estimated 1,750 shareholders.26

Built upon world-class research and developmental processes, HempFusion is prepared to market its premium hemp-infused product lines across multiple distribution platforms.

Now with key partnerships in place with Verdant Oasis and Probulin Probiotics, HempFusion has strategically positioned itself for international expansion into European markets and medicinal distribution networks.

With all of this put together, HempFusion compares very strongly to peers in the hemp space with their own health and wellness brands. HempFusion already has more brands than these other companies and it’s only just gone public!

HempFusion’s Winning Expansion Strategy

In order to assert market dominance in the hemp health and wellness sectors, HempFusion Wellness Inc. (TSX:CBD.U) has an expansion strategy built through 5 Distinct Channels:

    • Natural,
    • E-Commerce,
    • FDM (Big Box),
    • Doctor/Practitioner,
    • Convenience

The company’s growth trajectory began with the Natural Channel, selling only ingestibles. If Natural Channel retailers were to carry FDA Drug Listed OTC Topicals, HempFusion projects the significant potential of an expansion into 10,532 stores.

The next revenue expansion is tied to Ecommerce, driven by an enhanced online marketplace to drive growth. HempFusion’s Ecommerce platform features a subscription program designed to drive recurring revenue and customer loyalty, which was re-launched in June 2020.

Through a multi-stage marketing plan, HempFusion (TSX:CBD.U) plans to implement Paid Digital, Paid Social, Influencer Marketing, Media Outreach, Trade Support, and Conversion Rate techniques.

One of the most successful methods of driving Ecommerce is growing a roster of brand influencers to increase product visibility and traffic to online marketplaces.

Utilizing influencers has proven to be the most effective marketing approach with the Millennial generation.

HempFusion is cultivating meaningful relationships with influencers that share the company’s passion for hemp and Health & Wellness—with plans to dramatically increase its number of influencers in the coming months.

Among the company’s brand ambassadors is legendary snowboarder and filmmaker Travis Rice, who has joined the HempFusion (TSX:CBD.U) family to share the brand with the action sports world.

Utilizing influencers has proven to be the most effective marketing approach with the Millennial generation.27

This is perhaps more important in this space, as both Millennials and Gen-Z are the most frequent users of hemp-infused products.28

Next the company plans to launch in FDM (BIG-BOX) outlets, which it believes could be the largest hemp opportunity.

Because of its strong compliance, and innovative products, HempFusion Wellness Inc. (TSX:CBD.U) and its team are poised to capitalize on a major Big Box rollout.

The company has already closed its first Food/Drug/Mass (FDM) Big Box customer—which in order to maintain a competitive advantage is not being disclosed at this time.

It’s worth noting that HempFusion’s CEO Jason Mitchell (N.D) and CRO Jon Visser each have proven track records, relationships, and networks that may position the company well for this opportunity.

FDM retailers typically demand high compliance standards, which HempFusion has successfully achieved, including self GRAS Affirmation, Drug Listed, USDA Organic Certified, and more.

HempFusion’s regulatory compliance standards cost the company millions of dollars and considerable time, but now are set to establish a significant competitive advantage over the next 24 months.

HempFusion Wellness Inc. (TSX:CBD.U) is positioned to launch a strategy with Doctors & Practitioners across America. Through its HF Labs line, HempFusion has access to 27,000 doctors, and another 70,000 licensed chiropractors in the US through Biome Research.

These two brands present a unique market opportunity channel for HempFusion and Probulin products—into a highly selective market segment that requires specific experience and specialized products recommended and/or prescribed by medical professionals.

In total, HempFusion has +11 products going to market targeting doctor practitioners—and the company has clinical trials in process to capture prescriptive action.

Lastly, the expansion strategy involves a strong rollout into 152,720 total Convenience stores to distribute its family of brands, including the upcoming launch of its 10mg Plant-Based Hemp-Infused Vegan Gummies line.

According to the company, there is already a 27,842 immediately addressable market for this.

World-Class Development Backed by an Outstanding Team

Driving the success of HempFusion Wellness Inc. (TSX:CBD.U) is an expert team with diverse strengths in health and wellness, branding and marketing, and developing hemp-infused products, including:

Jason Mitchell – Co-Founder, Chief Executive Officer, and Director Mitchell is an expert in supplement formulations with +20 years of experience in the natural products industry. He is a naturopathic doctor certified by ANMCB, who has successfully created and launched over 300 industry-leading products during a 15-year tenure with Country Life Vitamins, prior to its acquisition. As one of three of Country Life’s Executives, Mitchell helped lead the company’s transition through the acquisition by Kikkoman.
Daniel Brody – Chief Corporate Officer (CCO) Brody is the Co-Founder and former Vice President of The Green Organic Dutchman. He has led a team that was instrumental in capitalizing and listing world-class companies including TGOD, Emblem, and Plus Products. Brody brings 7 years of experience with two independent leading Canadian brokerage firms.
Jon Visser – Chief Revenue Officer (CRO) Visser has +25 years of experience in all aspects of sales and marketing and brings a proven track record of consistently driving growth across all major channels. Previously, he was Senior Vice President, Sales at Navajo Inc., a multinational manufacturer, and distributor of Piranha Eyewear, Hottips! Electronics Accessories, Pennzoil Automotive Supplies, Salute Barware. While at Navajo, Visser grew annual sales from $60M to $128M in less than three years while tripling the +$1M yearly revenue-generating customers.
Ola Lessard – Chief Marketing Officer (CMO) President of the US Hemp Roundtable, Lessard has a reputation as a proven and strategic marketer with +25 years of experience. She’s the former VP of Marketing at Barleans, where she was responsible for the launch of one of the most successful American hemp brands with +25 SKUs. She oversaw their entry into the hemp space, launched 9 hemp SKUs in less than 2 years, and led a move to develop and launch a full-scale Ecommerce site for direct-to-consumer sales, including subscription, affiliate, and loyalty programs.
HempFusion’s Unmatched Quality Standards are Opening Unique Doors in the CBD Industry
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9 Reasons

Why HempFusion Wellness Inc. (TSX:CBD.U) is a Winning Hemp Stock:

1

First US hemp Company to IPO on the TSX Big Board

2

Compliance Drive – Multiple certifications and executive memberships that take anywhere from 18-24 months to replicate in addition to a significant capital investment; HempFusion’s CMO Ola Lessard is the President of the US Hemp Roundtable

3

Multiple Revenue Drives – Revenue and opportunities from 5 robust channels: Natural, E-Commerce, Big Box, Convenience, and Doctor Practitioner. Products are currently sold in 4,000+ retail locations across 50 states including Sprouts, the Vitamin Shoppe, Whole Foods, Thrive Market, and Fresh Thyme Market

4

Proprietary Hemp-Infused Product Portfolio – 46 products on the market from tinctures to proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals to Doctor/Practitioner Lines and Probulin’s sc ientifically validated delivery systems

5

Research and Development (R&D) – 30 products under development including OTC Drug Listed Ingestibles and additional topicals

6

Proven and Experienced C-Suite and Board of Directors – Extensive leadership, public market, finance, legal, CPG, and M&A experience are crucial assets in driving the Company’s business plan forward

7

International Expansion – Probulin is selling in the Middle East, South Korea, China, Mexico, and India; HempFusion and Probulin products are planned to be sold across Europe (Ireland & UK) – Probulin’s Trojan Horse strategy is a gateway to increased international distribution

8

IPO and Strong Cash Position – US$18,315,734 cash as of June 30, 2020 – Second-largest cash position in the sector, no debt.

9

Brand Influencers – 25 influencers that range from 50k to 150k followers including American snowboarder and filmmaker Travis Rice and actor and professional skier KC Deane; increasing to 250 influencers as part of expansion strategy


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19. https://investors.charlottesweb.com/press-releases/press-release-details/2019/Charlottes-Web-Holdings-Reports-2019-Q3-Earnings/default.aspx
20. https://www.congress.gov/bill/116th-congress/house-bill/8179?s=1&r=1
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27. https://mediakix.com/blog/why-brands-need-millennial-influencers/
28. https://tinyurl.com/y66cy7ea

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