Quality, Safety, and Compliance: Dr. Jason Mitchell Speaks on the Road Ahead for CBD
HempFusion (TSX:CBD.U) continues to be one of the CBD oil companies that The Dales Report is watching closely. With the company having just gone public in the last 60 days, and shares trading 200% higher than during the financing round, Dr. Jason Mitchell is excited about the next steps for this hemp-based CBD company. He’s shared some hot topics for shareholders and investors in his interview, as well as a look ahead at what’s next up for HempFusion.
CBD Distribution and the Return on Advertising Spend
Only about 4-5% of HempFusion’s business is online at the moment, and Dr. Mitchell has already indicated that that ecommerce was going to be a primary goal for HempFusion’s CBD products going forward. They’ve begun investing in ecommerce platforms that offer products direct to consumers, and Dr. Mitchell says this is “already paying dividends.” HempFusion’s probiotic line, Probulin, was launched on Amazon roughly the middle of November of last year, and their return on advertising spend (ROAS) is approximately $5.50 for January and February, meaning that they don’t require a large amount of ad spend to gain exponential growth.
While the digital space is a big market, the Food/Drug/Mass area is a huge opportunity that Dr. Mitchell doesn’t want to ignore. HempFusion has been working with a Top-5 retailer on product data, and the results back from the first 60 days are encouraging to say the least.
An Edge in Regulatory Compliance for HempFusion and Its CBD Products?
Dr. Mitchell says that one of the big questions that investors and shareholders should be thinking about is “What is the FDA going to say?” Don’t expect a brand-new set of rules for hemp-derived CBD all of a sudden, he cautions, because companies will still have to comply with all of the normal rules in place for dietary supplements.
One of the big questions, Dr. Mitchell says, is: is it safe? If a company doesn’t have their toxicology studies completed, they’ll be at a huge disadvantage as it can take up to two years to complete these studies. HempFusion is banking on the New Dietary Ingredient (NDI) for supplements being a required path. And with toxicology studies on CBD long completed, Dr. Mitchell feels this has given HempFusion the edge in new markets and studies, such as Dr. David Harnick’s six-month clinical trial on the effects of CBD on the human body, which HempFusion has been the exclusive brand and sole supplier for.
HempFusion also has already submitted their Novel Foods Dossier to the United Kingdom’s Regulatory Food Safety Agency and obtained validation. It’s the first step of a crucial regulatory process that takes over a year for final approval, but in the meantime, they’ll be able to continue selling their products in the UK.