Martin Sumichrast, CEO of Level Brands, which Plans to Acquire cbdMD
With the passing of the Farm Bill Thursday, major U.S. retailers are likely to pounce on the opportunity to stock their shelves with CBD products after waiting years for such legal clarity. That’s according Level Brands CEO Martin Sumichrast, whose company recently announced it would acquire Cure Based Development LLC, owner of consumer cannabidiol (CBD) brand cbdMD. The target company manufactures products such as gummies, oils and “bath bombs” containing CBD, a hemp derivative that has health benefits but doesn’t have psychotropic effects like the “high” caused by THC in marijuana. As CorpGov explained in an analysis of the deal, the Farm Bill is so important to Level Brands that its passage was a requirement for the cbdMD transaction to close.
In an interview with CorpGov, Mr. Sumichrast also said that cbdMD stands apart from others in the industry because it started earlier than most, helping establish a consumer brand. It is entirely focused on CBD while other companies may attempt to add similar products as part of a wider mix. In addition to brick-and-mortar stores, cbdMD plans to expand its existing online presence and enter international markets over time, beginning with Canada.
CorpGov: How do you expect the market for CBD to change once the Farm Bill becomes law?
Mr. Sumichrast: Removing industrial hemp and its derivatives from the federal Control Substance Act as a Schedule 1 drug will completely change the market. This has been the single biggest hurdle to get into big-box stores. This change will open up CBD to be sold both online and in major-market retailers. The passing of this bill also lets consumers know that CBD is a viably safe alternative to traditional pharmaceuticals. We now also have greater access to athletes and the sporting world in general. It’s an exciting time to be a part of the rapidly expanding CBD industry.
CorpGov: What advantages does cbdMD have over other manufacturers that may vie for market share once hemp is no longer a controlled substance?
Mr. Sumichrast: We have been manufacturing all our premium CBD products for over a year. We have also built a reputation for manufacturing high-quality products at an affordable cost, giving the consumer the greatest value. cbdMD solely produces CBD products – we are not a big chain company looking to make a quick buck by adding a line of CBD products to a line of existing products. Finally, cbdMD is creating a brand in the marketplace. By creating a recognizable and trusted name, we’re able to better guarantee product peace of mind when customers purchase our products in stores.
CorpGov: Do you expect major retailers that have so far avoided CBD sales to begin selling it right away or are there further hurdles?
Mr. Sumichrast: Almost all big box chains would not even consider stocking their shelves with CBD when it was listed as a schedule 1 drug. The acceptance of the major chains will also encourage a larger customer base to try the product who may not have been willing to try it before. It will add credibility to CBD as an all-natural alternative health and wellness option.
CorpGov: How big of an opportunity is e-commerce versus brick-and-mortar sales for cbdMD?
Mr. Sumichast: We believe in, and excel at, marketing in the e-commerce marketplace. Brick-and-mortar sales will prove a bigger market for CBD products, and most of our competitors are targeting that market. The brick-and-mortar market offers opportunities to allow the CBD market to grow exponentially. Where cbdMD will separate itself from our competitors is through our marketing campaigns for the e-commerce market. CBD is an effective product, but it’s recommended to take it every day – the more you take it, the better it builds up in your system. And the easiest way to get your monthly supply is to order online or even setup an auto-ship program so you get the product sent to your house on a regular basis.
CorpGov: Do you envisage expanding internationally over time?
Mr. Sumichrast: International expansion is definitely in our plans for continued growth. We are currently working on processing shipments to Canada. The passing of this Farm Bill will open up countless new opportunities in the CBD industry.
John Jannarone, Editor-in-Chief