VIDEO: GreenSpace Brands Inc (CVE:JTR) on Emblem Partnership

GreenSpace Brands Inc (CVE:JTR) (FRA:4G7) CEO Matt von Teichman discusses the company’s recent deal with Emblem (CVE:EMC) (OTCMKTS:EMMBF) (FRA:E0M) to partner on branded CBD products. The partnership gives GreenSpace a US platform to complement its existing relationships with every major grocery store, pharmacy, and natural health food store in Canada.  The pair discuss CBD’s legalization on October 17 and advances in CBD research. As research continues to highlight the benefits of CBD, Teichman predicts production of CBD products to be extensive.

Transcript:

James West:   Hey, welcome back to Midas Letter Live. My guest in this segment is Matt Von Teichman; he’s the CEO of GreenSpace Brands Inc., trading on the TSX Venture under the symbol JTR. Matt, welcome to our little show.

Matt von Teichman: Thank you, James.

James West:   Matt, let’s start: what does GreenSpace Brands do?

Matt von Teichman: So prior to a few weeks ago, we were really just in the natural foods space. So we have a whole bunch, we have nine different brands in the organic natural foods space that we sell through every major retailer in Canada, and then we have one brand in the US that we bought just in January that is a plant-based dairy business that also sells pretty much through the whole country.

James West:   Wow, cool. So it’s obviously going to be focused on CBD-infused products?

Matt von Teichman: It is CBD, yeah. So a few weeks ago we announced a partnership with Emblem, and it’s a partnership focused on branding CBD products. Starts off as oils and then lotions, and eventually gets into edibles and gets into some of the brands that we own, where we’ll put CBDs into those brands.

James West:   I was having a déjà vu moment there, because I’m thinking, I think we must have just interviewed these guys, because this seems very fresh to me! And then we just had Nick Dean here from Emblem last week, and he was talking about this, and I’m like, oh, the penny drops! Anyways, perfect. Slowly but surely, but eventually. Cool! So yeah, so we were talking about GreenSpace Brands during the Emblem interview, and so I kind of feel like I really kind of know the company now. So how do you grow this business into an international enterprise?

Matt von Teichman: Well, I think it starts that we have a US entity now, a US platform. So we’ve got salespeople and merchandisers and everything we need in the US to kind of grow it. But I think we’ll wait on clarity a little bit on rules as they relate to CBD before we launch these brands in the US.

So right now, it starts as Canada, and we have relationships with every major grocery store and pharmacy and natural health food store in Canada, and we have all the feet on the street as well as the key account managers. So we’re well positioned to take a brand that we create with Emblem and put it through that channel once the regulations are kind of allow it. And before that, we’ll probably start on non-CBD, hemp-based products with that same brand to start establishing the brand in market.

James West:   Okay. So I have shelled organic hemp seeds on my porridge in the winter time…

Matt von Teichman: Only in the wintertime?

James West:   For some reason, porridge doesn’t appeal to me in summer? I don’t know, I like white wine during the day, too – it’s like, very odd. I’m just a herd animal. So then the CBD, how do you manage the inconsistency of CBD regulations from state to state and federally, in the United States? I’m just curious about that because our last guest was also CBD-focused, and mentioned, you know, that it was inconsistent, and I didn’t really dive in on it with him but I wish I had, so I’m going to do it.

Matt von Teichman: Good. The tough questions. Well, I think for us, we have some time to figure that out, because we’re not going to launch in the US right away. So right now it’s a bit of a slippery slope; it’s very much a black hole, so we’re kind of avoiding the US entirely until the regulations become clearer. I think today there’s some information around the World Health Organization indicating today that CBDs should be something that are deregulated, and hopefully that permeates kind of the worldwide community, and certainly I would imagine Canada would be one of the first to pick up on that concept. But I imagine the US would be one of the last. So we’re going to wait until the regulations become clearer around CBDs before we enter that market at all.

James West:   Okay. So just for my own sake, is it legal for a non-patient to buy CBD in Canada?

Matt von Teichman: Yes, it’s still not legal. It’s still considered a banned substance, effectively; it’s kind of tied together with THC. But as of October 17^th, it’ll be legal, obviously, to the online channel and wherever else it’s allowed to be sold.

James West:   So CBD will be allowed under the recreational regime?

Matt von Teichman: That’s right.

James West:   Even though there are no recreational attributes to CBD except for the fact, if you do a ton of it, you start to sparkle?

Matt von Teichman: Yeah, I’m not sure about that piece, but yeah, exactly. It will be, that’s what happens.

James West:   I’m telling you.

Matt von Teichman: It will be, that’s exactly right, is CBDs are going to be legal under the recreational kind of rules, and we anticipate – a lot of people anticipate – that eventually the Canadian government will deregulate CBDs and allow it to be sold as a natural health product and through pharmacies. But for now, that’s not the case.

James West:   So, can I ask you – my organic shelled hemp seeds, they probably contain some CBD, I would think?

Matt von Teichman: Small amounts, yeah.

James West:   Small amounts.

Matt von Teichman: If it’s coming from industrial hemp, it’ll contain small amounts of CBD.

James West:   Okay. In California, I happen to know that there’s a measure that either passed recently or is soon to pass, where they are going to ban the use of industrial hemp as a source of medical CBD.

Matt von Teichman: Right.

James West:   Is that something that you’re familiar with?

Matt von Teichman: Yeah. I’m vaguely familiar with it, I’ve been reading about it a bit.

James West:   Does that complicate your universe in any way, shape or form in terms of the input costs?

Matt von Teichman: It doesn’t currently, mainly because again, we’re not going to be in the US. But a lot of the industrial hemp is grown in kind of the Midwest and grown in China, interestingly enough, so I don’t think the purchasing of CBDs from industrial hemp is going to affect that very much; but you never know. If that becomes something that catches on, and other states decide that’s the route they want to take, that would have an impact potentially. But again, because we’re not really US-based, I don’t think it’ll affect us, certainly not in the short term.

James West:   Hmm, interesting. So CBD, to produce CBD relative to THC – you know, THC has such a wider range of effect and sort of characteristic as to how it interacts with, particularly, the human mind, that, you know, there’s a lot more that goes into acquiring a high quality THC, high potency THC premium dried flower, than there is required to obtain CBD from hemp. Is that correct?

Matt von Teichman: I believe so. There are many different types of CBDs in hemp and in cannabis; there’s more in cannabis than there are in hemp, but yeah, I think you’re right, it’s certainly – the interaction of whatever strain of CBD with the human body is still relatively unclear. There’s some research now going on, but because it’s been effectively illegal in North America, at least, for a long time, there’s not a lot of research. So like the THC side, the CBD world is now undergoing a lot of research to see what are the true effects. And again, this WHO study came out today indicating that it has some effect with stress and anxiety relief, and pain relief, and different things like that, is a help. But there are –

James West:   The World Health Organization just came out with that today?

Matt von Teichman: Yeah.

James West:   Boy, are they ever a leading-edge thinking agency!

Matt von Teichman: Isn’t that something?

James West:   That’s funny. Well, you know, it’s interesting: you see all this, you know, evolving research and clinical data coming out now, whereas before, you couldn’t even study the plant without finding yourself –

Matt von Teichman: In jail.

James West:   Or your subjects, exactly, incarcerated. So I suppose it’s a good thing that now the clinical and the official medical side is going to come out and officially tell us what we’ve already known for decades.

Matt von Teichman: Yeah, I think it is! I mean, you’re right: patients, or people who have been using CBDs, will swear by it, and they’re in the hundreds of thousands if not millions. So there’s a lot of people who will talk about it, but in the absence of true clinical research, it can be considered snake oil or something like that. And you know, that’s what we want to avoid. I mean, we believe, as does Nick from Emblem and pretty much everyone on our teams, that CBDs have a truly therapeutic and medicinal effect; but having more research to kind of study it and verify it, is not a bad thing.

James West:   That would help.

Matt von Teichman: That would help, yeah.

James West:   Fantastic. Okay, so then, do you envision this product ultimately – or CBD, rather – being in everything from, say, like energy bars, to energy drinks, to, you know, weight training protein replacement substances? Like, where’s the limit as to where CBD will not end up?

Matt von Teichman: Yeah, I mean, I think it really depends on what the effect of the CBDs are, because different CBDs do different things, but I envision it to be pervasive. So I think there will be sleep shots that have CBD, and there will be morning energy shots that have CBD, but different types of CBD, because they produce a different effect. But yeah, long term I think we’ll see CBD in a ton of different products, in a lot of drinks, in a lot of edibles, and in a lot of sort of more medical forms like tinctures and those sorts of things, gel caps.

James West:   Is there any body of work available at this point where somebody who’s very curious about it can go and find out, oh, okay, this CBD is good for these things, and this is the strain that has had CBV or CBG-A? Is there any work like that?

Matt von Teichman: I mean, there is a lot of work like that. Pointing to one particular resource might be challenging, but I know Stanford, for instance, has done a lot of work. They’ve been doing a lot of work on kind of –

James West:   Stanford University?

Matt von Teichman: Stanford University, yeah, interestingly enough, on kind of the effect of these different CBDs. I think that’s probably a place you could look. But there’s tons to look at online, the question is, how valid is it? There’s so much kind of loose research online that probably is grounded in a good story, and certainly in patient response, but true clinical research, I think there’s very little of it just because it’s so new.

James West:   Right. So from an investment point, now, GreenSpace Brands has started trading when?

Matt von Teichman: Three years ago.

James West:   Three years ago?

Matt von Teichman: Yeah, we’ve been since May 2015.

James West:   Oh, okay, that’s interesting. And now Emblem Corp. has put in a $2 million investment; is this a precursor to a more intimate tie-up down the road, potentially?

Matt von Teichman: You never know; I never say never. I certainly, I think it depends on how our teams work together. But right now it’s an investment to get these new brands started, and then, you know, it carries a royalty with it, so that’s how Emblem is going to be compensated, largely, plus it’s a supply agreement. So it’s a multifaceted agreement, but really what it is is two very good branding businesses getting together and sharing resources to try to get the first CBD brands on the shelves.

James West:   Wow, sounds exciting. Matt, we’re going to leave it there, and I’m going to look forward to talking to you again in three, four, five months and see where you’re at. Thanks so much for joining me today.

Matt von Teichman: Great, thanks, James.

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Original article: VIDEO: GreenSpace Brands Inc (CVE:JTR) on Emblem Partnership

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