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Interview, Part 1: Smoke Wallin On Building A CBD Brand Portfolio

June 29, 2021

This morning, Vertical Wellness, known for its range of CBD offerings, announced a merger with CanaFarma Hemp Products Corp, which is listed on the Canadian Securities Exchange.The deal will create a combined public company worth over $50 million, which will be led by Vertical Wellness CEO Smoke Wallin. SNDC executive editor Daniel Marsteller caught up with Wallin to discuss the merger and the outlook for Vertical, whose brands include Kathy Ireland Health & Wellness, Taos, Hemp-Moji, Lap Dog, and Organic Candy Factory, among others.

SNDC: How does this deal further your vision for the future of Vertical Wellness?

Wallin: We set out to build the best brand portfolio in the health and wellness space with a focus on using natural solutions, starting with cannabinoids. We have largely done this, but now it’s time to scale up and get our brands in widespread distribution and on shelves at retail. Doing this at the scale we intend to and with the amount of brands that we’ve created or acquired requires very substantial amounts of capital. Merging with CanaFarma gives us a platform to access public markets and investors, as well as opportunities to further add to our portfolio.

SNDC: How is the overall climate for CBD products developing in the US in your view? What are the main challenges and opportunities currently?

Wallin: We know that the consumer is interested in alternative health and wellness solutions, as opposed to their traditional pharma-based products. Whether for pain relief, sleep medicines, or anxiety relief, a huge portion of the population is very interested in natural remedies. Cannabinoids, led by CBD, but also a whole host of other minor cannabinoids, are showing great promise in helping solve these ailments. There’s a massive demand out there, but there’s also a massive amount of confusion, and because of the FDA stance prohibiting ingestibles up to now and the highly fragmented nature of the industry with so many little brands, but no real leaders, it’s made it difficult for those consumers to find good answers. What works? Who’s reliable? A great brand gives consumers confidence that what they say is what will be delivered, gives them an expectation to fulfill that brand promise. What we see today is an industry that needs real brands to help educate the consumer and give confidence in the market.

SNDC: How are retailers responding to the emergence of CBD products?

Wallin: In spite of the craziness of Covid and the retail shutdown, which set back the physical brick-and-mortar distribution of CBD brands by more than a year, the online business has been steady and growing for the industry. Now that retail is opening up again, their reluctance to carry new products is rapidly dissipating. We see it as a tremendous opportunity to help retailers gain share, accelerate growth, and help educate consumers with our portfolio brands.

SNDC: What are you seeing in the CBD beverage space in particular? Is that an area of focus for Vertical?

Wallin: Everyone knows my background in the beverage industry, and that’s one of the first things that I wanted to bring out. We developed several beverage brands and formulations that we think are terrifically effective and taste great, but we waited to launch those brands, given the environment we’ve seen since the FDA made their ruling on ingestibles in early 2019. We’re now moving forward on all fronts to get these beverages out in the marketplace. We know that there’s a huge demand among consumers for beverages. It’s a great format, and we think it could eventually be the biggest. It’s a huge focus and we certainly understand the distribution and how to get products on shelves.

We’ll have more on the brands to watch in the Vertical portfolio in an upcoming SND Cannabis Edition.

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