In this edition of "Rising High," The Fly conducted an exclusive interview with Dave Briskie, president and chief financial officer of Youngevity (YGYI), about the company’s HempFX brand which offers a hemp-derived CBD product line. Here are some of the highlights:
HEALTHY HEMP-BASED CBD: Youngevity, an omni-direct lifestyle company, introduced its HempFX product line in 2018 combining organically grown, hemp-derived cannabinoids with the company’s signature nutrients. Briskie describes the brand as “as a really nice mixture of healthy hemp-based CBD products and compatible products that help leverage the efficacy of hemp-based CBD.” The president and CFO said the move into the hemp industry was natural for the company as it was founded on principles around plant-derived nutrition. He added the brand looks to targets areas of overuse or over prescription in drugs. “We’re not an anti-drug company,” Briskie said. “We think drugs have their place but our opinion is if you can do something naturally or with a plant-derived ingredient, that that’s probably a good first stop before you go and take chances on drug interactions.” He noted the brand’s muscle restoration and relief Soothe cream offers a safer alternative to opioids, its sleep aid Relax oil targets overprescribed sleep medications and its mood-elevating Uplift softgels looks to address anxiety in the youth. “To have a product that helps people level out, we feel like it is really what HempFx is about,” he said.
DIFFERENTIATION: Briskie said HempFX differentiates itself through its employment of a comprehensive strategy. “On the back-end, we feel the advantage is going to be the controls that we are going to put in place, the ability to be field-to-finish on hemp-derived CBD and the ability to now have our own FDA-level lab to test our products,” he said, citing the company’s recent acquisition of Khrysos Global, which gave Youngevity ownership of INX Laboratories and its testing facilities. The president and CFO said, “HempFX is out in front of the consumer, but it’s the responsible activity that is taking place behind the scenes through our commitment to science, to the ability to extract to produce proper isolates and distillates and to deliver products that are accurate to the label.”
EXPANSION: As interest in the space grows, Briskie said HempFX will absolutely look to expand both the product line and the brand’s footprint. “We certainly see it being a full suite of products and we have our teams in various countries at various levels of the registration process,” he said. The company is looking at Japan, where it already has an office, as well as Canada and Mexico as potential areas of opportunity.
CHALLENGES: Briskie said he sees a “big bottleneck” in the industry surrounding extraction and also sees challenges around science in the space. “It seems like the industry is focusing very much on grow, biomass production,” he said. “At the end of the day if that grow and that biomass is not turned into either oil, isolate or distillate then it’s not actually an ingredient that can be put into any hemp-derived CBD product.” The president and CFO said he believes the challenge will “plague” this industry for a while, adding, “I believe the cost of those ingredients are going to be very high just with simple economics and supply vs. demand until extraction catches up with grow.” However, Briskie said he views the challenge as an opportunity following the company’s recent acquisition enabling the ability to process its own isolate and distillate and extract oil. The second issue Briskie sees in the industry is around the science. “It seems like everyone is kind of just jumping in and hanging their CBD sign on the door,” he said. “They’re not really understanding the product and how to get the right amount of ingredients into the product.” The president and CFO said he also believes there is a lack of testing in the industry and noted how the company’s acquisition of a full-blown laboratory like INX Labs can help address that challenge. The acquisition “gives us the ability to not only make sure that our products do what they say they’re going to do and the labels are accurate, but also to be able to provide a level of policing for the industry as well.”
OPPORTUNITIES: When looking at opportunities in the space, Briskie said he believes there is going to be a “very, very big’ investment in science in the future. “Everyone likes to throw out the CBD word and I hear people talk about cannabinoids, but I think you’re going to see a real development of CBN and CBG, which are showing incredible promise in the science community,” he said. “The ability to have a hemp plant produce higher quantities of CBG and CBN, I think is going to be a big play.” The president and CFO said he expects to see efforts in genetics in the near future to clone out plants to start to isolate ingredients. Briskie also said he sees a big opportunity in efficient extraction capability. “It’s an area that we are very focused on,” he said. “We can have a place for a farmer to bring their biomass and have the ability to turn their biomass into oil, isolate or distillate and be able to provide those services.”
INVESTOR INTEREST: Briskie said as investor interest rises in the industry, investors should understand that the current space appears to be similar to the dotcom bubble. “Investors should be looking at companies that are really serious and really committed to the space and not necessarily making moves or veiled moves to just create a piece of news to make their stock move,” he said. “At the end when the dust settled in the dotcom era, there were amazing companies and when the dust settles in this era, there are going to be amazing companies. I believe if the investors are smart and do their due diligence they can find some of those companies and be richly rewarded.”
MISCONCEPTIONS: When asked about misconceptions around the industry, Briskie said one of the biggest he faces is around the word cannabis. “The word cannabis is thrown around,” he said. “Cannabis is the plant…there’s a hemp plant and there’s a marijuana side to it, but in the industry cannabis is marijuana and hemp is hemp” The president and CFO said a “huge percentage of people’ equate hemp with marijuana, drugs with THC or a psychotropic effect. He said he believes the confusion around the products will clear up over time, but “unfortunately, it’s probably preventing people from actually taking the product.” He noted that HempFX’s site was designed as an education resources and features a chart explaining the differences between marijuana and hemp.
OTHER CANNABIS STOCKS: Publicly-traded companies in the space include Aurora Cannabis (ACB), Aphria (APHA), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Cronos Group (CRON), General Cannabis (CANN), Canopy Growth (CGC), Tilray (TLRY), Innovative Industrial Properties (IIPR), India Globalization Capital (IGC), ICC International Cannabis (KNHBF), Biome Grow (ORTFD), MediPharm Labs (MLCPF), Indiva (NDVAF), OrganiGram (OGRMF), KushCo (KSHB), MedMen Enterprises (MMNFF), Elixinol Global (ELLXF), Planet 13 Holdings (PLNHF), Wayland Group (MRRCF), Khiron Life Sciences (KHRNF) and Liberty Health Sciences (LHSIF).
“Rising High" is The Fly's recurring series focused on cannabis stock news.