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When the dot bong boom was in full swing, profit-hungry investors scampered between investments like toddlers on Red Bull, creating a revolving door of millionaires and paupers nearly every week. Much of that insanity was based on promises, promises that in some cases were not unlike the ones tossed about by Bre-X before the proverbial poop hit the fan. By the time the dust settled and the wheat was separated from the chafe, the myriad of false promises had cast a pall not only over the MMJ sector but neighbouring spaces like hemp, leaving the remaining true players to toil away under jaded eyes or in relative obscurity. As a result, despite the magnitude of the milestones they announced, the sound of their accomplishments seemed to echo in a relatively empty room. image: http://www.stockhouse.com/media/news-images/...TGRFC_CraigGoodwin.jpg
Click to enlargeA prime example of this is Naturally Splendid Enterprises (TSX: V.NSP, Forum), a noted purveyor of hemp and plant-based ingredients with popular natural products such as PawsitiveFX? and NATERA® already flying off the shelves and on-line hemp sales of Chii increasing over past years. In the last three months, the company has managed to secure million-dollar contracts, smash revenue records and exponentially grow its global market footprint. This coming year is slated to be more of the same and many in the investment community still may never have heard of them. It for this reason that Stockhouse writers sat down with J. Craig Goodwin, CEO, Director and Founder of Naturally Splendid, to get the full picture of the company and its blue sky potential. So Craig, for those still in the dark, would you briefly describe Naturally Splendid Enterprises and the services / products it provides?
Naturally Splendid has a solid business strategy. We strive to be cash flow positive with our conventional line of natural products through exporting and our retail lines. We plan on building these revenue streams while we pursue the ?blue sky? opportunities associated with our omega extraction and formulation technologies and products. We are also well positioned to capitalize on the evolving cannabinoid markets in North America in particular, but also globally as the regulations become more ?cannabinoid friendly?. We also have majority ownership of a 12,000 square foot processing facility in Saskatoon, Saskatchewan that we can utilize for our own extraction and formulation of plant based ingredients and products such as HempOmega?. This facility can potentially be converted to perform cannabinoid extraction and formulation as the regulatory landscape evolves to allow for such procedures in Canada. Let?s start ringing the bell, Q1 2016 was a transformative quarter in terms of revenues and really set the company up for hockey stick growth. Would you give us a breakdown of the numbers and their significance?
We have made significant progress exporting to South Korea. We initially anticipated exporting 100 tons of shelled hemp seed hearts to South Korea for all of 2016. Since initiating this exporting business in February 2016, we have shipped almost 400 tons of shelled hemp seed hearts for a value approaching $4M CDN. We are now estimating that we may export upwards of 1,000 tons of shelled hemp seed hearts to South Korea in 2016. Additionally, we will begin to introduce additional products to the South Korean market including HempOmega?. Our three retail lines are also gaining traction in Canada and we are investigating exporting opportunities for the NATERA? brand in both Asia and Europe. Our majority owned, 12,000 square foot processing facility in Saskatoon, Saskatchewan has been operational since late March 2016. We are currently toll processing for several clients at this facility which will add to our overall revenue. In short, Naturally Splendid is closing in on being cash flow positive through our more ?traditional product lines? for export and retail. This allows the Company to pursue the ?blue sky? opportunities available for our omega extraction and formulation technologies and products such as HempOmega?. It also allows the company to pursue the ?even bluer sky opportunity, surrounding the evolving cannabinoid markets in the United States and Canada. We can pursue both blue sky opportunities without having to go back to the market for capital raises for general operation, thus preserving shareholder value. A major component helping drive this growth was a recent landmark deal which put Naturally Splendid smack in the middle of the Korean market. Would you give us details of that deal and the potential it holds for Naturally Splendid?
Our master distributor in South Korea is Korea Beauty & Healthcare (KBH). They have done a tremendous job promoting our shelled hemp seed hearts in their region. In fact, are exceeding expectations. We in discussion with KBH in regards to introducing a number of proprietary products we have developed, through their distribution network in South Korea. The same distribution network that has exceeded our projected 2016 exports to them in just the first four months of this agreement. Other than the major win in Korea, what milestones has Naturally Splendid reached in the last 12 months? Completed acquisition of POS BPC and completed $500,000 in upgrades and made fully operational late March. Currently servicing a number of clients. HempOmega? a finalist for new ingredient of the year. Purchased Chii ? on line hemp company We launched Pawsitive FX?, our pet care line (just over a year ago). Upgraded all our websites Ranked #4 on TSXV Top 50 ? Diversified industries Moving to new facilities with double the square footage to accommodate the additional product flow Several successful studies and projects advancing HempOmega technologies and product. Continue to strengthen advisory board You recently travelled to Singapore as a member of the Canadian Trade Delegation, could you explain the significance and potential of this designation?
We have travelled to Singapore and Seoul as official Members of the Canadian Trade Delegation. We recently returned from participating in the Premier?s Trade Mission with Premier Christy Clark. The Premier?s Trade Mission had stops in Seoul, Manila and Tokyo.Being a member of the Canadian Trade Delegation and Premier?s Trade Mission has created tremendous international exposure for the Company. The government contacts made at the federal and provincial levels are invaluable. Both levels of government have been very supportive of Naturally Splendid. You are constantly expanding your product pipeline, can you give us an update on your latest effort with the Cocos Pure project?
We are very excited with the Cocos Pure opportunity. We are in development of a number of HempOmega? infused coconut products. This product development was conducted at POS BioSciences. We will begin introducing these products to multiple distribution chains, including our distributors in South Korea. Companies may have a great business plan and great products, but they?re only as good as the people running the show. How is Naturally Splendid set up in terms of leadership to handle its potential explosive growth?
We have an experienced Management and Board of Directors who bring a wide range of proficiencies into play. Additionally, our Advisory Board is exceptional in my opinion, they?ve all had major business success in a variety of areas including Technology, Food Science, Marketing, Finance, Business Development, International Branding, Mergers & Acquisitions, R&D, sales, and the list goes on. The management of Naturally Splendid begins with the founders of the company, myself and VP Bryan Carson. Our goal to make a positive impact on the planets population through health and nutrition began almost 8 years ago. We needed a strong team to make this dream become reality. Chuck Jenkins was appointed as CFO, to make sure we were following regulatory protocol operating a public company. He has provided irreplaceable guidance during our transition from a start-up, to a company that is now being recognized on an international scale. We also added a former Pfizer and GlaxoSmithlkine executive, in David Racz, who has been working with Cannabis Sativa for over 10 years and was a major factor of the success of MonaVie Inc. Naturally Splendid also needed an industry and agriculture specialist, that?s where the President of the CHTA (Canadian Hemp Trade Alliance) Russ Crawford was elected to the board, and his extensive knowledge of the hemp industry has been a key factor in our success to date. Peter Hughes has been involved at the top level of many successful public companies and his experience with managing these companies has proved to be invaluable in assisting Naturally Splendid through its initial growth period. Our advisory team includes both current and former CEO?s of established and recognized associations and companies, with this expertise and proven track record of success we have an ever-growing foundation of industry knowledge and growth potential. Don Wood, Former CEO of Arrowhead water, Dave Eto, current president of the BC Dairy association, Doug Mason, founder of Cleary Canadian Beverages, Charlie Brink, Founder of MonaVie and Full Spectrum Laboratories Ltd., Rick Green, PHD and research partner at POS-Biosciences, 2009 Super Bowl Champion and B.C. born Mitch Berger, Peter Howes, a former Jim Pattison VP, and the recently added UK sales expert, Richard McGawley, who is currently introducing HempOmega? to the European and Asian market space . Naturally Splendid feels it has assembled a high caliber team to execute its business plan and build shareholder value. What can investors expect in 2016?
Significant top line sales and we are striving to be cash flow positive in the near future. The company intends to expand its exporting reach by region and the product offerings within that model.
Now that there we are nearing a cash flow positive position, we can begin to focus more efforts to securing clients and purchase orders for our HempOmega?. With a cash flow positive company, we can also begin to revisit the cannabinoid opportunities evolving in the United States. It seems Naturally Splendid is firing on all cylinders, let?s put this in perspective and talk comparables within your sector.
There are several comparable; In the area of protein extraction, Burcon can be considered a comparable. They have a market cap of $92,000,000 with a share price of $2.54. Neptune technologies provides omega nutrition. They have a market cap of $109 Million with a share price of $1.36. Recently a Canadian hemp company was purchased for $132M USD on $6M in profits. Vega, a private Vancouver based company specializing in plant based ingredient formulated products, recently sold for $550M USD. Annie?s Organics, a natural / organic food company was purchased by General Mills for $850M USD.
In the end, what would you say to investors who might be considering Naturally Splendid Enterprises as an addition to their portfolio?
I believe that most of the ?heavy lifting? is done. We have assembled a strong professional team, launched 3 retail brands, secured advanced technologies in the areas on plant based bio-ingredients including omega extraction and formulation, as well as secured significant cannabinoid technologies. We have also bought a majority interest in a processing facility with a replacement cost of $30M Canadian. We have launched an export division and our top line sales have already surpassed all of 2015?and it looks like quarters 2, 3 and 4 will be stronger than Q1. In short, the Company is much further developed than last year when we traded as high as $1.04 per share. I do believe the future is very bright for Naturally Splendid and its shareholders
Read more at http://www.stockhouse.com/opinion/interviews/2016/...OZUveJmuIAKvq.99
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