As Covid continues and CBD marketing remains tough, we examine the different ways companies are reaching out to consumers
CBD advertising and marketing can be exceptionally tricky for brands. As consumer awareness of CBD is growing, the changing landscape of Covid restrictions has increased the demand for contact-free sale solutions.
So how do you reach new consumers if social media isn’t on your side and mailouts may bounce into spam folders?
Brands have been embracing new, creative ideas for consumer shopping experiences. This has included entering digital spaces, making shopping into a game and delivering CBD via food apps.
Here are some of the ideas shaking up the high street for 2022
Deliveroo and Love Hemp
The CBD industry and delivery services have experienced a massive boom since the start of the pandemic in 2020. CBD sales rose while Deliveroo reported transaction volumes had increased on its app to £1.7bn in the second quarter of 2021.
It’s not the first time Deliveroo has sold products outside of food such as alcohol, vaping products and tobacco that are already available through the app. Although it is still advertised as a predominately food based service. This is the first time the app will sell CBD products.
The trial will only be available in the Croydon area of South London but if it proves successful then it may be extended across the UK. Love Hemp’s production facility is located there so products will be available within a six-kilometre radius.
Tony Calamita, the chief executive officer of Love Hemp Group said: “Not only does Deliveroo provide us with greater visibility with consumers, but it also provides us with a new dimension to our consumer access – on-demand delivery.”
“Deliveroo has over seven million pre-registered consumers across the UK who are increasingly looking to the app to fulfil their day-to-day needs, of which high-quality CBD products are now one. Our ambition is to launch nationwide and utilise Deliveroo as a major distribution channel for Love Hemp.”
Cannabis deliveries in the metaverse
The creation of NFTs (Non-fungible tokens) and the popularity of cryptocurrency have led to an interest in alternative worlds or metaverse experiences. Metaverse refers to a network of 3D virtual worlds that are focused on social connection. Brands have been slowly adapting to the idea of entering virtual worlds as a way to reach customers through gaming. Facebook has also announced plans to release its own metaverse this year.
US company Higher Life has launched a real-life CBD dispensary in the metaverse that offers a gamified shopping experience. Customers can guide a 3D model around the virtual shop, ask for information and explore. In the end, the experience culminates in a real CBD product being sent to your home.
US cannabis start-up, Kandy Girl has also opted to join a virtual world to sell their Delta-9 edibles. It had been in negotiations to advertise on over 100 locations in NFTPlazas but this did not go ahead. However, the brand opted to join Decentra Metaverse instead. The company plans to build a full dispensary as well as an art gallery where they can sell NFTs.
Cannabis airport sales
The rules and regulations around flying with CBD or medical cannabis can be really tricky. It often depends on the law of the country you are flying from, to or stopping over in. While this isn’t set to change any time soon, for those travelling through Canada, it could be slightly easier to purchase CBD.
Prince George’s airport reported that they have received an application for a business license from cannabis company Copilot. If this is approved then it would be the first cannabis shop based in an airport. Although, it may be a while before we see dispensaries in airports across the globe.
Copilot is a project aimed at making travel a less stressful experience by reducing anxiety or fear of flying.
The Prince George’s Airport (PGAA) authorities reported that they have received a business license application from the company Copilot to open a store later this year. If completed, it would be the first cannabis retail shop at an airport in the world.
PGAA CEO Gordon Duke said: “We are very pleased to welcome Copilot if they receive a business license and provincial approval. City Council is expected to give their business license application the first reading on January 10. Copilot has satisfied regulatory requirements from both Transport Canada and the Province of BC in advance of their meeting with the Council.
CBD vending machines
Covid has accelerated the need for contact-less sales for brands. However, when it comes to buying CBD, customers still need a lot of education or information around what they are purchasing.
A vending machine may not seem like the best place to go for canna-education or products but they have been growing in popularity. A number of brands have installed vending machines for CBD in shopping centres or stores towards the end of 2021.
Cannaboxx is just one example of how brands have been encouraged to embrace alternative ways of reaching new consumers. The boxes can be placed in many different locations but the brand highlights that it can be another option for stores with a lot of footfall.
Owner Andre Addison refers to the kiosks as a “dispensary in a box.”
CBD on a mountain
CBD company, Charlotte’s Web went one step further by placing a CBD vending machine on the top of a mountain in Utah. It dispenses the companies balms for athletes who may be hiking with sore muscles. It sits on top of a sandstone slab that rises 400 feet above Moab, Utah.
How two former heads at Johnson & Johnson are bringing a science-based approach to CBD
Two former Johnson & Johnson executives teamed up in 2020 to bring their experience in consumer medical products to the CBD industry and create products that are more efficient and effective. The company’s water-soluble technology claims to be 400 per cent more bioavailable than standard oils.
Dr Gerry McNally, former head of consumer healthcare at Johnson & Johnson and John McDonagh, former head of worldwide marketing, joined forces in 2020 to show the CBD industry that there is one thing it is not paying enough attention to – bioavailability.
McDonagh kicked off his career at Johnson & Johnson straight out of university, initially working in the finance department before turning his attention to the marketing of medications like Tylenol, ammonium, Motrin and Pepcid AC. There was a common thread between these medicines. Consumers wanted to be assured of the evidence and data behind the medicine they were taking so they could be taken with full confidence. This is the missing link that McDonagh and McNally saw in the burgeoning CBD supplement industry. Too many products on the market lacked the evidence backing the formulations and too few companies were prioritising bioavailability.
“It’s not just about the ingredient, It’s really [about] how the formulation makes the ingredient accessible to the body,” McDonagh told Cannabis Wealth. “We really want to take that research, the science behind it and the technical parts of formulating quality products, and that’s what we’re really trying to do at NextEvo. There’s a lot of commonality there between my background at Johnson & Johnson and [our] work at NextEvo.”
After leaving Johnson & Johnson in 2018, McDonagh worked with a fund that looked at both cannabis and hemp investments in the wellness and lifestyle space. When he delved deeper into the industry, he found that most products on the market were likely not delivering the therapeutic benefits they were claiming to.
“We really couldn’t find anyone who was addressing some of the key issues with CBD which is the bioavailability issue,” he said. “The management teams of these companies just didn’t have the experience in consumer products like I did at Johnson & Johnson and Gerry did with his research and development background.”
Identifying a gap in the market, the pair joined forces to launch NextEvo and its trademarked technology SmartSorb, a water-soluble 5 per cent CBD concentration liquid that claims to improve bioavailability by 400 percent compared to standard oil-soluble products.
CBD is a highly lipophilic substance, meaning it dissolves particularly well in oil. This is why the majority of CBD products on the market use oil-based formulations. It’s cheaper and generally requires less time, money and expertise to produce. The issue with a lipophilic molecule like CBD, however, is that it does not absorb well in the digestive tract resulting in only a small proportion of the molecule reaching the bloodstream. CBD is also highly metabolised. According to McDonagh, most oils will get “chewed up” by the liver resulting in a bioavailability level of just 5 to 10 percent in most products.
A water-soluble emulsifier like SmartSorb differs in that it can mostly bypass the digestive system and is believed to instead be taken up by the lymphatic system, a network of vessels, organs and tissues that process an average of 20 litres of blood every day. The result is an absorption rate four times greater than that seen in standard oil-based formulations, NexEvo claims.
Preliminary studies from the company also show that water-soluble CBD products are absorbed much quicker than oils and tinctures. In one pharmacokinetic study carried out by NextEvo, SmartSorb reached its maximum concentration within one hour while in oil-based products the research team only recorded signs of uptake between 90 minutes and two hours. So, if water-soluble products appear to be more effective than oil-based, why are they not the norm?
“Most of the products we see in the market are oil-based products, in large part because they’re relatively inexpensive and easily accessible to the market,” Mcdonagh said.
“Maybe the balance of products will shift from oil base to water-soluble at some point in the future. But I think right now, you have a lot of companies that are really just looking at the margins that they can get from some of these poorly formulated products and I think, unfortunately, that’s driving a lot of current trends.”
Due to the complexity of the technology, not all water-soluble products are going to offer the enhanced bioavailability they claim to. For example, McDonagh is sceptical of companies claiming to use nano-technology to break down the particle size of CBD so it can be more easily formulated into a water-soluble emulsifier.
“Nano is kind of a false term in the category. Many people use the term nano when it really just means that they shrunk the size of the molecule,” McDonagh explained. “We don’t know if that’s really the magic key with CBD. We have seen instances where the molecule can actually be too small and so you might get a quick uptake of the product into your bloodstream, but you won’t get a sustained and overall [greater] absorption level.”
The technology behind SmartSorb was developed by one of NextEvo’s technology partners based in Colorado. With 30 years of experience in R&D at Johnson & Johnson and 32 patents under his belt, Gerry McNally took the technology and adapted it into a number of formulations including capsules and gummies.
Although water-soluble technology is still relatively rare in the world of CBD, it is a well-established formulation in the pharmaceutical industry. “It’s not so much a mystery how to make a water-soluble ingredient,” McDonagh said. The challenge lies in making the product consistent and specific.
“The difference here ensuring a couple of things,” he explained. “One is [ensuring] the particle size is the right size to maximise absorption. It’s also about selecting the emulsifiers. We’ve tested different emulsifiers to achieve the results that we have. And then there’s another element which is what we call the fingerprint of the emulsion which makes sure that each particle is emulsified correctly.”
“What Gerry and I really stand for is making sure that we’re making products that are science-based and high quality,” McDonagh added. “The reason we’re doing that is because we have the consumer in mind first; that’s who we’re formulating for. Our approach is to bring quality products and it’s more expensive and it’s more timely and it takes more investment to do that, [but] we want to do things the right way.”
The Happy Hemper: bringing CBD to your front door
Discover one couple’s mission to bring CBD to the masses through its subscription hampers.
Husband and wife duo, Scott and Cally Macdonald, set up Happy Hemper in the belief that people can benefit from CBD.
The Happy Hemper CBD subscription box company was born out of the pair’s own beneficial experience with CBD. Living with anxiety, Scott and Cally began using CBD after looking for help from doctors and not finding results. The pair say that CBD seemed to provide a solution to their daily stress, and when their baby arrived, they utilised the compound to stay on top of their day-to-day lives.
Scott says they wanted to tap into the CBD market – and realised that with 50 per cent of Brits saying they use or have used subscription box services – this could be the perfect way to help bring CBD to UK front doors.
The boxes have been carefully curated by the couple, who include a wide range of CBD products including body scrubs, hair masks, lotions, bath bombs, capsules, drinks and more – varying from month to month.
“We first started taking CBD around about four years ago, and found it to be really beneficial. We both suffer from anxiety and depression. So, it was finding an alternative because we went through the leaps and bounds of doctors which was just a nightmare roller coaster. So, we were trying to find something that works,” said Scott.
“CBD seems to help you manage your day a lot easier and its all-natural.”
Cally said: “We started taking it more of when our now four-year-old was born. It started us off on an even keel and we get along better. It has been a really interesting journey, and learning more about CBD and its capabilities brought us on to figuring out what we could do – that’s how Happy Hemper came about. We were surprised nobody else was doing anything like this.”
“Around 52 per cent of the population say they use a subscription box or are using one,” added Scott. “With Covid-19 we had the opportunity to really make a push for it. The response from the public and industry has been quite overwhelming.
“It is so exciting. There are a lot of big fish in the pond who want to know how they can get involved and tell us it is a really good idea. It is really important to us – we want to build that connection with the suppliers and our customers and get the message out there that CBD can help.”
Happy Hempers’s hampers come in different size options at different prices – all offering customers the chance to save from £60 to £70 per box. The pair do everything themselves, and Cally says with the usual price of CBD products, the subscription hampers allow customers to use up all of their product without worrying about making it last.
For the hampers, Happy Hemper works with a number of different brands, picking products that will be recognised by its customers as well as smaller CBD brands, and now brands are beginning to approach the company. All of the products that Happy Hemper uses are lab tested
“We’ve learned that you build really good connections because brands have already established on their own lane. It’s not really “pick and choose” – we’re trying the product and seeing what works best,” said Cally.
“We always want to make sure that we take less profit and have more savings for our customers and that they are getting good products because it’s about building connections rather than taking money. We want to be in this for the long term because we believe in it.
“We want it to be as afford affordable for everybody. We don’t want it to be a luxury – we’re trying to get out to the masses.”
Customers can use Klarna to spread the cost. The pair point out that their progress has not been without hitches. As many CBD companies discover on their journey, finding payment providers can be one of the problems they have to contend with due to the risk surrounding the product.
Scott commented: “It was a really easy process to get Klarna and we spoke to them prior to make sure it would work. We’ve been through the process before with payment providers – we were building our own website and the payment provider that was incorporated within that website didn’t accept CBD companies. It was a learning curve for us – it was good to be knocked down to then build ourselves back up again.
“Payment providers are the issue and I think that’s where most issues are when it comes to what CBD companies are faced with, because cannabis companies are deemed to be high risk. A lot of payment providers don’t want to touch cannabis. The payment gateway was the most difficult obstacle to get over so we’re talking to more and more companies to try and get more advice.”
Marketing the company has been another huge obstacle say the pair. Contending with the likes of Meta and Google can make marketing CBD companies extremely difficult, because although CBD is legal here in the UK – social platforms tend to take a global approach to risky markets.
Scott said: “It’s hard to get paid ads to Facebook and Instagram and the main platforms So, there’s a lot of other sorts of twists and turns you need to try and go around to get people looking at your website, because that’s what it’s all about.
“We’re just going to keep pushing on what we’re doing try and get our brand out there. We want to be able to build our website and the subscription box. Until then, markets are a good way to get our brand awareness out there.”
Happy Hemper has won the ‘Commended award’ in the Beauty Shortlist at the Wellbeing Awards, and was a runner-up in ‘The Heat’ – Scotland’s equivalent to Dragons den where Scott delivered a three-minute pitch in front of five judges.
What does Kanabo’s telehealth approach mean for UK medical cannabis?
Kanabo surprised the market with its £14m acquisition of the GP Service – so, what does this mean for the UK industry and patients?
Kanabo is looking to increase patient access to medical cannabis with its acquisition of the GP Service.
Medical cannabis has been legal in the UK since 2018. Since then, only around three prescriptions have been given through the NHS. A 2019 survey from YouGov and The Centre for Medicinal Cannabis revealed that 1.4 milion people in the UK self-medicate with cannabis for chronic pain, but there were only around 2500 private prescriptions in the UK in March 2021.
A number of problems with the prescribing of cannabis are causing a bottleneck, reducing access for patients in the UK. Kanabo is aiming to find creative solutions to this problem – and its recent acquisition of the Telehealth GP Service is aiming to improve access for patients.
Founder and CEO of Kanabo, Avihu Tamir, spoke to Cannabis Wealth about how the company plans to leverage the GP Service to transform the UK’s medical cannabis industry through telehealth.
“I think that people don’t appreciate the value in the last mile – the relationship with patients,” said Tamir. “In the UK, it’s different to the rest of the world – they still see cannabis as an old industry where you’re growing, cultivating something processing and just selling. They’re missing the point that this is an industry where the majority of the value is going to be, by far, in the last mile – the retail side, the branding of the product, the relationship with the patients.
“Like any other industry, it’s going online as well. And that’s even without understanding that this pain of safe access and prices of medical cannabis.”
Despite being one of the only countries in the world where cannabis can be prescribed for almost any condition, the country is probably one of the most difficult for access and pricing. Tamir says the sleeping giant of the UK market needs innovation.
“Every other country the trying to innovate the wheel again,” says Tamir. “In Israel, they have put made a terrible new set of regulations. Germany has also created regulation for medical cannabis along with Australia, Canada and most states in the US.
“In the UK, the regulators did something great – they didn’t invent the wheel again. They took the set of rules for controlled substances and unlicensed medicines and said cannabis is falling into this category. Immediately that means that the regulation, existing licenses and protocols and everything is in place already today.
“The small group of patients we already have, first of all, average payments per month are by far the highest, around £200 pounds. And the retention rate is above 80 per cent per month, meaning the situation is that people are paying a lot but still coming back and taking medical cannabis so, the market is strong.”
However, more access is needed for patients and Kanabo wanted to understand why, with the high demand for cannabis medicine, there are not many more patients accessing it.
“Why do we have limited patients when there is no real challenge in getting prescriptions and prescribing it?” asked Tamir, who thinks a large part of the problem is that the NHS is sitting on the fence by allowing the prescription of medical cannabis but not enabling their own physicians to prescribe it.
Tamir commented: “It doesn’t make sense. The second issue is that they created this bureaucratic hurdle where, if you want to get a prescription, you need to transfer a patient’s medical records to the specialist.”
This process can take weeks or months in some cases. The GP Service already has access to NHS records – which will hugely reduce the timescale for patients to access the medicine they need.
“The last challenge is that you don’t have a lot of physicians that are willing to prescribe – it could because the NHS is not supporting them, and they’re feeling worried about medical insurance. Maybe it’s just not worth for them because of all the hassle of prescribing cannabis,” Tamir commented.
Kanabo’s acquisition of the Telehealth GP Service is aiming to take this hassle out of prescribing cannabis to patients – bringing down prices and increasing access for patients.
Tamir said: “I think that with the GP service, we can solve the big problems and really create a solution that will be affordable, will be quick and will be less painful. We will really leverage the capability to educate both physicians and patients and through a very convenient platform of video calls.”
Currently, the GP Service is only prescribing non-controlled substances, but Tamir says it is in the process of getting the ability to describe controlled substances, and Kanabo is working on a process to create a committee of GPs.
Tamir said: “GPs cannot prescribe, but they can recommend. Our idea is for patients to have their initial interview with a GP who can recommend a medicine, and will then have, for example, twice a week, a committee with a specialist and sign next to their signature. So, we are starting to really find creative ways to relieve the bottleneck.”
Tamir says the response from the GP Service has been positive – its GPs understand that they are sitting on a platform that is perfect for medical cannabis as it is one of the only ones that is both private and connected to the NHS records.
“These are the two things you need,” says Tamir. “You can’t be a public service provider because you can’t prescribe cannabis and if you’re not connected to the NHS records, then you have the bureaucratic challenge. They understand and the physicians are very supportive of medical cannabis.”
Director of Kanabo, Dr Dan Porter, MP, former Minister of Health will be very involved in the process.
Tamir said: “I think that the stigma of cannabis is no more challenging in the UK. The challenge is that physicians worry for their insurance by prescribing something that the NHS is not signing on. So, surprisingly, it is not the stigma on cannabis holding things back.”
The move is a new avenue for the medical cannabis industry, but it is also a new market entry for Kanabo – which will see it entering the multi-billion pound telehealth market.
“This strategy for the GP Service is both entering the medical cannabis market and have a growth there, but still generating quite a lot of growth internally from the current business,” said Tamir. “I think that now it’s almost a default and that healthcare is going online. I think that there’s no question that the majority of the consultancy with GPs will be online in a matter of years.
“There are two target markets. One is the corporate market – there is no real solution today for the corporate market. People are becoming more and more accepting of private insurance. But they’re missing this part that is maybe even less expensive than private insurance, which is giving the employees access to quick and fast meetings with the physician.
“If you need to wait two weeks to see your GP or a few months to see a specialist – that doesn’t make sense, even for the employer. So, that is the offering that the GP Service is now targeting. The second part is beyond just the UK as a territory.”
Tamir says that his dream is for any patient in the UK to be able to access a medical cannabis prescription in 90 minutes – 30 minutes for an appointment and 30 minutes to get the prescription – but this will take time.
“I think at the beginning it will take a few days,” commented Tamir. “But, it will still be much faster and much more convenient than any other service out there. I see that cannabis can be accessible to everyone.”
However, the venture is not without its challenges. Tamir highlights a current hurdle lies in pharmacies not being able to hold cannabis – but Kanabo’s relationships with major pharmacies in the UK will a long way towards resolving this issue.
Tamir comments: “We’re the first cannabis company in the UK that has contracts with all of the multiples in the UK – Superdrug and Boots for example. They see the GP Service as a legitimate health provider that has been working with them for years now. It’s not something new.
“So, it is no longer a cannabis company that is trying to bring them an unknown product. It’s a service that uses and understands and they see the value. We are also the only cannabis company that has the support of the Care Quality Commission (CQC) in the NHS and which is being audited yearly.”
Since the announcement of Kanabo’s acquisition of the GP Service, the health service’s customer support has been flooded with calls and emails – which Tamir says demonstrates that there is no lack of patients in the UK.
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