Wellness & CPG: The Cannabis Connection - Branding Bud Live Episode 21
THE SUMMARY
Research on the role of cannabinoids in treating chronic pain is ongoing. Initial studies with live human tissue suggest that a CBD-Aloe Vera formulation may decrease the activity of pain receptors—which could lead to new approaches to treating chronic pain, including IC/BPS.
THE CO-HOSTS
David Paleschuck, Adriana Hemans
THE SPECIAL GUEST
Heather Florio, CEO, Desert Harvest
THE TRANSCRIPT
David Paleschuck
Welcome to Branding Bud Live, the live stream that’s 100% THC and 0% WTF. Every week we speak with business people about the business of cannabis. I’m David Paleschuck, founder of Branding Bud Consulting Group and author of the first book on cannabis branding. I’m joined by my co-host Adriana Hemans, a Marketing executive with over 8 years in the cannabis space. Hi Adriana!
Adriana Hemans
Hi David. Thank you for that intro. I’m so excited to co-host the show with you. We’re bringing amazing guests from across the cannabis ecosystem to share their perspectives. My favorite thing about Branding Bud Live is that we focus on building community - and we encourage audience participation. It’s not just about us talking, it’s about all of us building something together. So feel free to drop your questions and/or opinions in the chat, and we’ll share them too.
David Paleschuck
Thank you, Adriana. And thank you, everyone, for joining us today. We have a lot of hot topics to get into today. Today, we’ll be talking about “Wellness & CPG: The Cannabis Connection”. Initial studies with live human tissue suggest that a CBD-Aloe Vera formulation may decrease the activity of pain receptors—which could lead to new approaches to treating chronic pain, including IC/BPS. Some of the topics we address are:
Plant wellness, and the ability to deliver quality products, consistently.
The CBD + Aloe Vera formulation, and how it may dampen pain response.
The opportunities for plant medicine and cannabis in the future.
Our guest today is Heather Florio, CEO of Desert Harvest, I’m excited to have her on the show today.
Adriana Hemans
Me too! Let’s welcome her onto the show. Hi, Heather!
Heather Florio
Oh, hi. Thank you for having me.
Adriana Hemans
Tell us a little bit about yourself and what you're passionate about.
Heather Florio
Desert Harvest started and was born out of a need for a bladder disorder called interstitial cystitis. And over the years, over the past 30 years, we have been developing products specifically for pelvic health, sexual health, women's health, neurologic health, and for radiation oncology, and specifically, as well as pain responses. We work with the International Association for the Study of Pain and a variety of other organizations. We've been doing that now for 30 years kind of evolving. And I have to say, I don't know if I could pick just one that's my passion, but I love what I do. The people we get to help and the lives that we get to change.
David Paleschuck
You've been in really the wellness industry for years for decades, and that's really changed over time. And there's blurred lines between wellness and beauty. And now we have cannabinoids and other components coming into that space. Can you tell us a little bit how that has evolved over time?
Heather Florio
I really think wellness and beauty is always an evolutionary thing, we talk about our skin, we talk about how to take care of it, how to take care of the outside of our bodies, but a Desert Harvest, you know, we focus a little bit about that, but more in the sense of the overall wellness of the people, the customers that come to us specifically with different conditions, different issues, we're looking to meet the needs of the underserved. And I think that that has kind of evolved over the years in watching, you know, when we started out in 1993, it was very much you know, women's health wasn't very much researched. Cannabis was very underground still. And although I'm a 90’s child, so you know, it's all over the place. So I don't know if it was underground, and my world in Colorado growing up, but because there and so, we've really kind of watched this kind of evolve. And, and we've seen, you know, many things become more mainstream, you know, women's health, sexual health, you know, in in cannabis, we're able to have more authentic conversations about it. And I think that's what Desert Harvest has; we've never shied from having a conversation about something that someone else might consider taboo. But if we see that it meets a potential need, the research is there, the science is there, the benefit is there. We're going to figure out how to research and how to make it the best, and bring out the best product possible. So we've really watched, definitely the cannabis industry, the medical industry, and the beauty industry kind of evolved over the years, to be an industry that's really about transparency, we really have to be I mean, you always have your bad actors. You know, the for the supplement industry, it's not a regulated industry. It's regulated in a sense, but it's not like it underwent a drug approval process. So there's a very shady component that we really have to watch out for, in our industry and consumers really have to be aware of and you know, the same thing goes for every industry as far as what we need to see. But safety data being the best product possible is what is critical to us.
Adriana Hemans
And wellness industry is such an interesting one to watch, because you see things seemingly come out of nowhere and become these huge trends. CBD not so much because that seems like it has a lot of longevity, we see that people who start trying it, it becomes part of their daily routine. But then you see other trends come up something like so I'm thinking about something from the beauty space, which is that charcoal phase that came in and sort of like was here and gone overnight. So I'm curious to hear from you whether like what are some trends that you think are here to stay or maybe some that are flash in the pan in the wellness space.
Heather Florio
You mentioned charcoal, I think the greatest thing that you have to realize about that is and that's a really good example, that was really good marketing. There's a really good thing between really good marketing with some pseudoscience and real science and real research and products that are authentic, and I think that that's kind of the busy biggest thing, you know, with CBD, it's really created kind of a skewed environment for CBD. That's a really good example because we have this industry where we're, you know, nearing 8000 brands of CBD in the United States alone. You know, it's the wild west and you can get it gas stations, you can get it at you know, pharmacies, you can get it just about anywhere. And we have no idea because it's not being regulated at the moment by the FDA in any way shape or form. It is all over the place. And so you've got it in foods, you've got it and in tampons, you've got it and lubricants you've got it. I mean, we've just put it in everything without even knowing what benefitted and has but hey, if we slapped some CBD on it, we could charge three times the amount because CBD is expensive. And for attic that might not necessarily benefit it. So I've seen, you know, very much like the charcoal there. I think what's going to happen, for instance in the CBD is you know, you the science never supported the charcoal, I think that's the difference between charcoal and CBD. The science supports CBD. The science is there, we have the research, you know, we even have CBG, we have, you know, other components, we have this research, we just have too many actors, and a lot of them bad. And a lot of them diluted not having what they say in them authenticity and ingredients. We don't even know if it benefits. So I think what you're going to see as regulatory evolves, may be kind of a paring down of these almost 8000 brands in the United States.
Adriana Hemans
Tennessee is close to passing a bill which adds a layer of regs to Hamp. Up to this point, Tennessee has done a fairly good job at allowing the market to self-regulate itself. Regulation is very important to give this industry the proper credibility. What are your thoughts on that, Heather?
Heather Florio
I agree 100%, I think that's the one thing we're lacking, when we chose to go into the cannabis space and bring out our CBD product. We did five years of research, you know, looking at the Edie, you know, full spectrum, broad spectrum, isolated all different variations of this, how we were going to utilize this as far as CBD as well, you know, we were looking at everything. And then, and we were planning for the regulatory because, you know, my lawyers are on these councils. You know, I have some of the best lawyers in the country in this industry. And, and they sit there and tell me, Hey, so it looks like the legislation is going to be here. And we should have something by what was it November 2019. So sometime in 2020, you should be good to go ahead and release your candidate, your CBD product. So I'm like, okay, so I started getting in, I've got the formula, I have all the research done, I'm going to go into production, and I'm going to release this product in June 2020. And then the pandemic hit. And, and that just like threw a complete wrench in it. And, and then by September 2020, we're putting it in the hands of Congress instead. And we know how well that works with actually getting things, you know, accomplished and done. And so I hope that, you know, so now we're sitting here three years later. And, you know, we watched this evolve, we watched this come to the forefront, but you are now we've got the FDA and Congress saying no, they need to do this, no, they need to do that. So it's like a he said she said kind of situation. And we're in a situation now in which we are kind of sit in a gray area, I don't like to be in a gray area, we have been on the forefront of, of many different types of medical research for almost 30 years, we you know, we are transparent about all of our ingredients, the regulatory everything. And, and this is something that needs to be dealt with. So that was for many, many reasons, one, regulatory so that we're having oversight of all these products coming out. We you know, know the authenticity, research. We just passed the bill last year to finally do more, allow more medical research to happen. We had very few studies going on in the United States, we had to take our research to Canada because Health Canada is on the forefront of cannabis-related research. They are flourishing up there and they astound me with the stuff that they're doing in Canada. And then you've got the us sitting here going, you know, I don't know, I don't know when and so I'm really, really hoping that that gets shored up because I think that will give it the legitimacy that it needs to kind of, you know, it's already out of the shadows, but you know, take it completely out, take away that stigma and look at it from a true medical perspective. We need to understand why drug interactions we need to understand, you know, safe dosing fully, you know, we know to kind of stay under a certain level but where do we go from there? There is a lot of things that Need to happen for not only the safety of Americans but for the understanding of the product its benefit, how can we sit there and, and watch all of these industries where we know it has benefits related to stress and anxiety and P and their studies going on with PTSD, but yet we can't give veterans can't touch it. They can't they we can't even give them CBD because we can't guarantee that the product is not convert in their body, even though because it can still show conversions of THC even though there's no THC whatsoever in our product at the, you know, lab level when it's at its raw state. But we have found in our research and what we've done that the body still can convert into THC. So even though a product says it has no THC, there's no guarantee for the safety of a job. And so you know, wouldn't if your job is, you know, even athletes, for instance, they can utilize CBD products, which they know, are having a benefit for them. Yeah, I mean, you know, we've got the whole big NFL research program going on everything else like that. But during the season, they're not allowed to touch it. They can't even touch CBD; they can't touch anything. And then, but yet, they'll utilize it during the offseason. And they know it benefits them. And they're advocates and they want it, but they can't get access to it. So you definitely sports athletes veteran, you know, military, we need to change the stigma. So that it's not like, Hey, you're going to lose your job. If you know you utilize cannabis.
David Paleschuck
Heather with over 1000 brands and with you know, the FDA saying one thing and or Congress saying one thing, and then all of the regulatory associations saying other things and nobody really nobody being able to fully connect? How do we as consumers make sense out of all of this?
Heather Florio
This is another reason why the regulatory needs to kind of change we know that it the almost 1000 brands makes it really hard as a consumer to be able to trust know, what you're getting, where it comes from, where it's sourced, how it's extracted, you know, there's so many questions that happen as a consumer, that unfortunately, the only thing that you can really say is trust your brand. Like if you have a recognized brand that you know and trust and has, has done some research because there are the companies that have done the research and a research study is you know, it has to be more quantitative in the you know, even our study our research we have we have done our models, we've done human tissue studies, and now we're crossing over and have permission to actually do human studies in live humans and so we are very excited about this. But this is the limits of every company that has a cannabis product and the ability to do research on life humans we can do research on mice we can do research you know our research was a little bit different than what we were able to do but we kind of found our way around it but it is it's really hard to be able to navigate there isn't a website that you can go to look at brands you trust a lot of the times what you're seeing in magazines and other things like that are best of sometimes they can be paid to play sometimes they can beat the you know they've been given free product you know influencers so you know same kind of thing they could have just been given the product to review it and they've gotten free product or gotten paid and so how do you know it's not like we have a Consumer Reports for cannabis.
Adriana Hemans
Because we were talking about the regulation, so it's like what percentage of people really are would be impacted? And it really sort of shows like how, how we're missed our FDA is being by not actually stepping in and putting some definitions around this.
David Paleschuck
Our audience participation question is just to level the playing field. Last year 2022, what percentage of Americans actually consumed CBD? So is it A 9%, B 18%, C 26%, or D 32%? Audience, this is your opportunity to shine.
Adriana Hemans
So put your answers in. And I want to say to Megan Palomino, good luck with your move to New York and congrats. I hope you have much success in the Big Apple. Well, I'm just assuming you're moving to the city. Maybe you're not moving to the city. But good luck with your move in either case.
Heather Florio
I would have guessed higher. I don't know.
David Paleschuck
It's interesting because I think there was the CBD craze and CBD fell from grace and all the other cannabinoids sort of picked up and, and CBD was sort of even, dare I say, overshadowed by delta eight and some of the other things that that have been happening. So. So it's interesting. Well, we've got mostly A's couple of B's. What's your thought?
Heather Florio
Can I choose to know either C or D? I think it's one of the higher ones. I'll go with C.
David Paleschuck
C. 26%. All right, Heather’s answer is C.
Adriana Hemans
The answer is C 26%. Don t you got it. Right. Nice work.
David Paleschuck
And the statistics and data, came from Cross River Therapy. When we pull out a stat, we like to back it up.
Adriana Hemans
That's a really significant percentage.
David Paleschuck
It is! Which reiterates Heather’s point made earlier - if 26% of Americans consumed CBD in 2022, the FDA and Congress need to be paying attention.
Heather Florio
I agree. 100% You've got me like googling the US population. I'm like, 26%. How much is that?
Adriana Hemans
Yeah, so that math for us is a huge number. And with that, with everyone sort of, you know, I think consumers in general and Americans in particular are taking wellness in their own hands and they're not necessarily waiting for their doctors or Big Pharma to tell them what they need to take to make themselves feel their best. Hi there. Do you think that Big Pharma is threatened by this this wellness movement that we're seeing?
Heather Florio
Yes, and no. I think that on one sense, you move in, I think that they are poising themselves in some way to be involved in specifically this space and as you know, in the cannabis space in the wellness space. I think that, for instance epidemics. the only FDA approved cannabis based drug on the market for seizures is pure CBD isolate. And it's FDA approved drug I am currently undergoing FDA approval for one of my one of my supplements, which is our aloe vera capsules which are used for a bladder disorder called interstitial cystitis. Imagine a constant UTI that goes, never goes away and is debilitatingly painful about 75% women about 25% men have it here in the US, they estimate about eight to 12 million men and women have this condition and we have an 87.5% response rate of some are complete relief of all symptoms, and double blind placebo controlled studies. The one FDA approved drug on the market that is currently undergoing class action litigation for making people go blind causing retinal myopathy and causes side effects of hair loss, liver damage, kidney damage, our aloe vera has no side effects, and it has a lower efficacy rate of about 36% on average. And so this is this is where we are really trying to the FDA, you know, the rigorous process needs to happen, what happens to undergo drug approval really does need to happen. The problem in the unaffordability that keeps so many in the wellness space, that that might, you know, become a drug and be in the pharma space. It's the costs, I mean, the costs are astronomical millions and millions of dollars just to get started and just to get through the first round of testing. And that's what makes it an impossible option. So I really think that the people would deep, deeper pockets as we as we go along this this might evolve and change. It might not. It'll obviously you know, when we talk about Big Pharma it's can they the investment that they have to make to turn it into a drug? Can they get a return on investment? They did on Epidiolex? Major, big time. And so I think that will ultimately be the question. But I think that it's companies like mine, like Desert Harvest, I would say that are you know, small to medium that are really on the foreground of going, I want to innovate, I want to create, you know, we're, we're the ones at Desert Harvest, we're at the medical conferences where our customer service is, you know, we're interacting with the patients on one side, we're interacting with the doctors on the other side, and we're bridging that gap because there really can be a gap between that doctor and patient. We're trying to bridge that educational gap, that research gap. And, and bring them together and so maybe I feel like that companies like ours though, are like the building blocks of that of what you know then Big Pharma goes and creates and goes and does because they see a lucrative opportunity, we are a capitalistic society. It's you know, but it's companies like ours that are doing the groundwork listening to the patients listening to the patient's needs listening to the what the doctors are hearing on a day to day basis and their patients’ needs you know, we were we're really trying to bridge the gap. And there are a lot of amazing companies out there doing the same thing.
Adriana Hemans
Is that frustrating for you Heather to see Big Pharma sort of capitalize on your product development.
Heather Florio
It is it is it's definitely you know, it's one of those really hard things where you watch you put in all of this effort and you know, this is where IP again, super expensive your patents, your trademarks, your everything super expensive to get done. And when you're a small company, it can be difficult and challenging to get those pieces but those are the only things that are going to protect you from big pharma companies and make it possible and then those big pharma companies which has happened to us many of times come knocking on your door and want to get involved or want to you know, partner want to buy you or want to, and you have to do what makes sense for you. And in our case, we have had the same mission for 30 years. I am second generation my son works here third generation in his 20s he wants to someday take over him and his wife you know they're this partnership duo that are killing it. And I think that that that this evolutionary process of small to medium businesses, it just depends why you're there. Our mission is really to change we wanted change things. While I'm in the healthcare industry. In this space we want, we want to disrupt we want. And I'm not looking for some big pharma company to come in and change that change how we interact with our customers that connection that, that creating products specific for those consumers.
David Paleschuck
How do small businesses stay afloat? If all the innovation is taking place at the small to mid-sized companies, but the cost to really manage the IP, to really take it through all of the other levels of regulation and certification, and to open up the markets really, which is finally when the when Big Pharma comes in right after, after the trailblazers have, you know, ripped a trail and after it becomes easier after there's more market share, there's more people aware of, in this case, CBD, right. How, how do you stay afloat, then, how do you manage to do what you do over the course of 30 years?
Heather Florio
Patience, you know, we could have taken on investors, we could have taken on large amounts of cash, it's thrown at us every day, on a daily basis, it almost seems like, but for us, it was critical to maintain our anonymity, to be able to our independence to be able to take this and be able to own our brands and, and our mission or goals, you know, I don't think and this is what makes Desert Harvest very unique and very different, I could throw take all the money we're making and throw it back into marketing and grow bigger and bigger and bigger. And obviously, we have a whole marketing budget and a portion of that, but we are committed to the authenticity of what we're doing the authenticity of our products. And so we take a lot of that money and throw it back into research and education. And, and, and, you know, we could have done things faster, we could have gotten more patents, we could have, you know, done all of this stuff. But for us, it was better to have slow, moderate controllable growth over these 30 years that has really allowed us you know, there's tons of ideas of things I'd love to do. And, and I have technology, we have created things that we've done, and I'm just holding off because I'm, you know, managing my budget. And, and, and because some of my ideas are grandiose, but definitely trying to do you know, manage what I've got work with what I have. That way I don't have to take on investors, I don't have to be beholden to investors, I don't need to be on every store shelf in the United States, where I just lost 75% of my, you know, margin to, to, you know, big box stores, I don't need to do that. For instance, there's one company that's one of our competitors. And I have learned that our net in although our gross income was different, because they're there on every dollar in every store shelf in America, our net profit was exactly the same. And that is because of those margins and, and what's going into to making that happen. So I guess it's for us, it was very important for us to stay authentic and to maintain our independence. And so we didn't do anything fast. We didn't do IP fast; we did the basics of what we could do what we you know, moderate everything, moderately a little bit at a time. And here we are 30 years later, line training our third generation.
Adriana Hemans
So one of the whole line like this, so we don't use it in the traditional sense. So there's so much to like, look at there and review and to understand all the nuances of different products, which sort of leads into this question about like, we were talking about consumer education, we were talking about how people learn about the products that they can trust, because obviously there's a lot going on behind the scenes that consumers wouldn't normally be privy to. And one trend that I think is really interesting as we were, we're prepping to have this conversation is the question of consumers are learning about products from other consumers right see to see or social commerce, you're you know, we've seen it 100 times like scrolling through Instagram or looking at Tik Tok and people are selling products to you. And sometimes it's very subtle. Sometimes it's not so subtle. But I think this is an interesting stat. And I'd love to hear our audience take a stab at what you think this is. So social commerce, defined as the selling of consumer to consumer on social media platforms. Typically, social commerce is expected to expand at a compound annual growth rate of X percent from 2023 to 2030. Is it a 16%, B 24%, C 32% or D 43%?
David Paleschuck
And once again, audience this is your chance to shine. I just love saying that. So joining, let us know what you think A. 16 B. 24%, C. 32% or D. 43%. And I think in the realm of what we were talking about earlier of 8000 plus brands with a very muddy market, you know, not necessarily knowing what works and what doesn't work, not necessarily knowing what the concentrates are, or where the levels are of both good and bad components in the product. It's hard to tell. So I see we've got a couple of A’s and a couple of C's.
Adriana Hemans
That would be great news for tick tock or that were true. I see. Let's see six guesses for D 43%. And two guesses for C. 32% Should we reveal the answer?
David Paleschuck
Let’s ask Heather what her thoughts are!
Adriana Hemans
Heather, what are your thoughts?
Heather Florio
I'd go high to I'd say D. 43%.
David Paleschuck
so everybody thinks social influencing and social commerce is really just going to absolutely skyrocket and I agree with that. Let's see what the answer is.
David Paleschuck
Yeah. Yeah, it's, it makes sense. And I think I think we're all looking to people we trust. And you know, an influencer goes a long way over a long time, if they're leading you in the right direction, and you can trust them. And that's, that really comes back to what a brand is, right? You know, a brand is the ability to consistently deliver a promise, whether it's real or perceived. But over time, just consistently delivering something that people are looking for, and managing their expectations along the way.
Heather Florio
Definitely, definitely, I mean, that's the that's at the heart of a brand. Definitely. It consumer trust.
David Paleschuck
I just want to touch upon the CBD and aloe vera testing that you've been doing seems initially to show dampening of pain. Could you touch upon that - the science of it and how that might be used by patients or athletes?
Heather Florio
Yes, definitely. So we started initially, first, we knew that combining our aloe vera that aloe vera could act as a carrier. Cannabis is a NERT it needs a carrier to make it systemic, hence the sublingual with the oils, and other pharmaceutical or enteric coatings that are used in edibles, things like that, and other essential oils. So for us, we want to use the aloe vera as a carrier. So we went to the University of Colorado because we knew it was going to make it more bioavailable or systemic in the body. And we were able to show that our aloe vera combined with the CBD isolate is 25% more bioavailable or systemic in the body than any other CBD product out on the market. And, and we were able to confirm that because the lab at the University of Colorado maintains a database of all cannabis products and their bioavailability. And so we were able to do that first. And then we wanted to understand which you know, because right now everybody's saying it works for everything. And so we wanted to know what it actually worked for. So we went up to McGill University in Canada in Montreal, because we knew we could, they have one of the foremost pain research centers in the entire world. And they have an income a tire cannabis Division at the Alan Edwards Pain Research Center. And so we went in and develop pain models with them. Looking at for instance, bladder pain, we had an 83% reduction after 24 hours, chronic nerve injury pain, we had a 56% reduction after 24 hours. And we've had similar response rates with chemotherapy, pain, surgical pain, MS pain. And so we then we wanted to understand we're and we're actually developing more pain models, we want to go further because we want to you know, we work a lot in women's health. So we want to understand like endometriosis, uterine fibroids, heavy menstrual bleeding, polycystic ovary syndrome, like we wanted to see what other conditions so we're doing more models. But we also wanted to understand the mechanism of function in the human body. So McGill was actually able to harvest neural pathways from donors that had donated their bodies to science. So they keep their once all the organs are harvested, they harvest the neural pathways, they can keep them alive for up to a month. And so we can induce you know, these different types of pain and the nerves and we can induce pain and see how it's impacting the nerves in live time. And then we can actually understand the mechanisms. So we determined that it was blocking the chemical release from ever making it to the central nervous system. And there's more to that, but we're getting ready to publish this year. So we're really excited about that. And this is leading us into getting permission from Health Canada to be able to expand our research into human trials, which is kind of going to be our next step as well. And I do see migraines over here. And it is one of the models that we're actually looking at because there's a large, it was interesting, we went to FENZ, which is the largest neuroscience conference in the world to release this research last year in Paris and The migraine sufferers and the heavy menstrual bleeding. We were inundated with people asking us about that.
David Paleschuck
Heather, thank you so much for joining us today your you know, what you do and what your family has done for 30 years is just really amazing. And we just appreciate everything that you do because you explained it so wonderfully before it's hard for the small and midsize companies to keep innovating and to keep looking after patients and, and folks that are underserved, like you said, and that really need to help. So if you're doing what you're doing, thank you for joining us today. We really appreciate it.
Heather Florio
Thank you for having me. This was wonderful.
Adriana Hemans
Well, I could have gone on all day talking about that.
David Paleschuck
Yeah, especially the neural nerve research! Thank you, everybody. And we'll be back next week, March 30. I can't believe it's the end of March, but we'll be back next week. April 6th 11am PST / 2pm ESP, and we'll be with Michael Zaytsev, Cannabis Program Director at LIM College, and Professor/Cultivator Marianne Cursetjee, MBA, CEO of Alibi Cannabis. chatting about “Cannabis EDU: Higher Education”. Thank you so much for joining us. Don't forget to check out www.brandingbud.com. Cannabis’s best kept secret. Have a great week. We'll see you next week. Thank you so much. Bye.
Adriana Hemans
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