Cannabis Wealth spoke to co-founder of the CBX Stock Exchange, Jonas Duclos, about the evolution of the platform and its mission to provide clarity for producers in a market with limited or no regulations.
The CBX Stock Exchange was launched earlier this year in a bid to provide transparency and quality assurance in the European cannabis market. The commodities platform, launched by cannabis patient, Jonas Duclos, and co-founder, Kevin Goetelen, has evolved from its previous iteration – HempBroker420.
CBX Stock Exchange enables trading in flowers, hemp biomass, distillates and isolates and tinctures, as well as allowing producers to connect with a number of different industries, such as wellness and beauty.
Duclos began his journey in cannabis after managing the excruciating pain of a rare genetic condition – PRP – for over 20 years before discovering that cannabis provided him with the most effective pain relief. This revelation led Duclos to dedicate his time to studying the plant.
Developing a trading platform
Duclos had been working in wealth management when, in 2016, his health problems led him to leave his job. He found CBD flowers provided great benefits, and quickly became an expert in what was, at the time, a relatively new product.
“I almost instantly became an expert because most people had no idea what it was. I had quite a precise idea of what we were dealing with and how we could work with it,” said Duclos. “So, I left the bank and started the brand CBD420. I wanted to make something that was trustworthy. It was very important to directly implement a lot of testing and making sure that we have good quality product.”
Duclos says it was the first brand to distribute CBD products outside of Switzerland across Europe in 2017, which was met with a high demand from businesses, leading to the formation of HempBroker420. The aim of the platform was to introduce buyers and sellers, and receive a commission. The site gathered around 2000 companies and generated more than €3m (~£2.58m) of trade in the first 18 months.
“Very early on I was able to build a good reputation. Before HempBroker420 I was really focusing on CBD – branding and marketing CBD products. I spent a year working with the HempBroker420 customers identifying all their their needs and problems, and that’s when I had the idea of creating CBX Stock Exchange,” he said.
Duclos says that one of the inspirations for the exchange – which he built from scratch – is the Chicago Commodities Exchange, which standardises products such as corn or coffee so they can be tradable on a global scale.
“We have companies in more than 90 countries,” he said. “It is definitely proof of a growing global market – prohibition is behind us now – knowing when regulation will be introduced is a gigantic question mark, and the industry has a lot to do show they are reliable and trustworthy.
“We have producers and distribution that’s growing steadily all over Europe now, but it could be much better and that’s because of the trust factor. The industry is difficult to navigate and that’s where I’m hoping to bring a little bit of guidance.”
With the UK slowly moving to be the first regulated CBD market in the world, Duclos emphasises the current lack of control in the cannabis market means there is a need for product quality assurance for consumer safety.
Transparency in the European market
In order to provide transparency through the platform, the CBD Stock Exchange has a registration process for which companies must provide detailed information and documentation that is reviewed by the platform’s compliance officers. To do this, CBX consulted the Swiss Health Authority and developed its own standards.
Achieving CBX Certification level and a Certificate of Analysis (COA) label on the platform ensures businesses can demonstrate that they work with labs to carry out safety analyses, showing that products do not contain contaminants such as heavy metals and pesticides.
“CBX becomes an amazing tool to be a transparent platform where everybody can showcase their product,” said Duclos. “Businesses can work to improve their rating by providing all the documentation.
“For a seller, it gives a lot of tools to find more buyers by getting better ratings, and for the end user, indirectly, we are forcing people to test more. We’re forcing people to get certifications that can be used to build trust with the end user.
“There is a big need at the moment for the industry to be more legitimate, to make more sales, to orient trades better and to find the right buyer. The platform is basically a melting point for the whole industry because we’re working with seed producers, flowers, biomass, all the extractions and then all the tinctures.”
The COA can be obtained by members independently or through CBX’s exclusive partner, SciTec Research laboratory based in Lausanne, Switzerland. The certificates are accredited by the Swiss Accreditation Service and Swiss Testing Labs, and SciTec specialises in the analysis of cannabis and derivatives, with each product undergoing seven quality control checks.
Duclos commented: “Businesses can show how good their product really is. They can increase the price of their product per kilo – there are so many things that they can benefit from in the long run.”
The exchange is now in the process of raising €1.7m in funds and is implementing a direct shipping service for every trader. Duclos is also embracing innovation through the digitisation of the exchange’s shares on the blockchain – enabling anyone to buy.
Curaleaf partnership to build platform for German recreational market
The company has entered into a strategic partnership with Germany’s Four 20 Pharma.
Curaleaf has acquired a 55 per cent stake in Four 20 Pharma – a fully EU-GMP and GDP licensed German producer and distributor of medical cannabis with its own product line.
Germany currently represents the largest medical cannabis market in Europe, with a total addressable market of over €200m (~£m) in 2022. This is expected to grow to nearly €1bn by the end of 2024 with the expected legalisation of recreational cannabis, expected to begin in late 2023 or early 2024.
Four 20 Pharma is one of the largest cannabis operators in Germany, with a greater than 10 per cent market share.
The partnership creates a strategic pathway for Curaleaf to acquire complete control of Four 20 Pharma within two years of the commencement of adult use in Germany. Curleaf has stated that the partnership also ensures alignment between Curaleaf and Four 20 Pharma’s current management team to rapidly build a best-in-class German business and a strong platform for Germany’s eventual adult use market.
Curaleaf executive chairman, Boris Jordan, commented: “By partnering with Four20 Pharma, Curaleaf’s European business will immediately gain additional critical mass and be in a superior position to capitalise on the accelerating trends in the European cannabis market.
“The opportunity in Europe cannot be understated, and Curaleaf is uniquely differentiated from other US MSOs via our already significant presence as the largest and most licensed cannabis company in Europe.
“With cultivation facilities in Portugal, manufacturing facilities in Spain and UK, rapidly growing patient numbers across Europe, particularly in the UK, Curaleaf serves the entire legal cannabis ecosystem and is also poised to capitalise on the adult use opportunity as regulation starts to unlock.
“This strategic transaction further underscores our aspiration to be the major player in the European market and the leading global cannabis company.”
President of Curaleaf International, Miles Worne, said: “Four 20 Pharma is a leading German distributor with a branded product that consumers love. They’ve captured significant market share in Germany by sourcing product from top EU-GMP certified suppliers around the world and building strong connections with German medical consumers by providing the highest quality flower in a namesake branded offering.
“As such, Four 20 Pharma is uniquely positioned to capitalise on Germany’s conversion from a medical to an adult use market and we’re thrilled to be partnering with their talented management team.”
Managing Partner of Four 20 Pharma, Torsten Greif, commented: “We have been exploring possible partners to stake our claim in the future German and European cannabis markets, and in Curaleaf we know we’ve found the undisputed leader and the best partner.
“From the beginning of our conversations, it was clear that they supported our strategic vision and respected our autonomy and entrepreneurial approach. Having full access to the tremendous knowledge and assets of the Curaleaf team will accelerate our future growth projects and help drive our company to the next level.”
Managing partner of Four 20 Pharma, Thomas Schatton, added: “Curaleaf shares our values of customer dedication and commitment to product quality, and we are incredibly excited about our future together.
“The team at Four 20 are thrilled to be able to leverage Curaleaf’s proven R&D expertise to help us continue delivering the best quality products to our medical patients and the promising future market.”
MGC Pharma receives first tranche of funding under new $10m financing facility
The financing facility will fund the execution of MGC Pharma’s business commercialisation strategy in the UK and US.
MGC Pharmaceuticals has confirmed it has received the first funding tranche of US$1.2m under a new US$10 million financing facility with Mercer Street Global Opportunity Fund.
The injection of funding will be used to further MGC Pharma’s business strategy, focused primarily on developing revenue growth through its partnerships with Sciensus Rare in the UK and Europe and AMC in the US.
The first portion of funding has been received in full and MGC Pharma will now issue 1.32m of convertible notes with a face value of US$1.00 each to Mercer Street. The company will also issue 21,511,545 fully paid ordinary shares to Mercer as part of the agreement.
The US$10m financing facility provides MGC Pharma with access to significant capital to fund the execution of its business commercialisation strategy in the UK and US as well as advance regulatory approvals for the company’s proprietary products in an effort to drive revenue growth, assist in the rollout of the ZAM App and provide funding for the group’s general corporate expenses.
The company will continue to implement “significant” non-revenue driving cost reductions within its operations, including the delay of non-core clinical trials.
Roby Zomer, co-founder and managing director of MGC Pharma, commented: “Mercer’s new US$10m finance facility provides the company with access to funding for MGC Pharma to continue to execute its business strategy of opening up key strategic markets over the next six months. During this period the business strategy will focus primarily on generating revenue growth through our existing relationships with Sciensus Rare in the UK and Europe, and AMC in the USA.
“In addition to its sales growth strategy, MGC is very excited about the potential value that the recent 40 per cent acquisition of the ZAM medical data collection App and its associated machine learning algorithm bring to the company.
“This investment is not only aimed at reducing R&D costs and providing the company with critical proprietary clinical data in the future but also provides the MGC with the potential for a future additional revenue stream and a value-creating asset on the back of the software’s successful implementation and rollout.”
The new US$10m financing facility fully funds MGC Pharma’s current business plan, the company said, and replaces the unused A$9.25 million of the previous funding facility established in September 2021.
Love Hemp sees sales drop by 16%, expects revenues of £3.6m
Love Hemp Group has stated it is expecting to report total revenues of £3.6m for the financial year ending 30 June 2022, which it says represents revenues slightly ahead of management expectations.
The lower than expected financing earlier this year has resulted in significant reductions in marketing programmes, says Love Hemp. However, the company still experienced sales growth during the second half of the year.
The company’s revenue continues to be UK-centric with year-on-year growth delivered in major retail stores, showing revenue of £2.15m in FY22 up 19 per cent, compared to £1.78m in FY21.
Direct to Consumer (DTC) sales continue to be slow via the company’s own online channels, lovehemp.com and cbdoilsuk.com but have generated 7437 new customers. The company has stated that these sales represent 26 per cent of total revenue, down from a 59 per cent share of total revenue compared in FY21, with a new head of digital commerce having been appointed to help grow DTC sales.
However, it has also highlighted that it has sold 233,987 units, up 19 per cent from last year.
This year, Love Hemp had all 34 products added to the Novel Foods Register. As a result, it has agreed new major retail listings and anticipates launching a range of its products in these new stores and respective online platforms in Q4 of 2022.
Additionally, the company has advanced discussions with a number of other major retailers interested in stocking Love Hemp products.
Tony Calamita, CEO commented; “I am delighted that we have continued to expand our footprint with greater distribution into major retail stores and delivered record sales of product units so more consumers than ever are benefiting from our products.
“This has been achieved whilst undertaking a significant operational review and I am confident this growth will continue.
“The company plans to make Love Hemp more visible internationally and sales overseas provides a significant opportunity in the future. We are a dynamic and passionate brand that after some challenges is once again on a growth curve with the most powerful and influential brand partnerships in the sector. Now it is our time to really capitalise on the opportunity.”
In December 2021 Love Hemp was also awarded ‘Leading CBD brand 2021’ in the Commercial Cannabis awards organised by Global Health and Pharma. Love Hemp is also a nominated finalist for ‘Most Loved CBD brand’ in the World CBD awards due to take place in October 2022.
Over the next year, Love Hemp plans to invest further in product development and release numerous new products in both ingestible and topical formats.
- Curaleaf partnership to build platform for German recreational market
- Tenacious Labs acquires CBD pet company Rover’s Wellness
- Khiron announces opening of first Zerenia medical cannabis clinic in Brazil
- MGC Pharma receives first tranche of funding under new $10m financing facility
- Akanda and Cansativa to supply German patients with cannabis flower