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Folium Biosciences |
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February 5, 2018 Issue |
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CEOCFO MAGAZINE |
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Q&A with Kashif Shan, CEO of Folium Biosciences the Largest Vertically Integrated Supplier of Non-Psychoactive Cannabinoids |
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Chief Executive Officer
Folium Biosciences https://foliumbiosciences.com/
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – February 5, 2018
CEOCFO: Mr. Shan, what is the focus at Folium Biosciences today? Mr. Shan: Folium Biosciences is the largest vertically integrated supplier of non-psychoactive cannabinoids. There are 113 cannabinoids found in cannabis, hemp or marijuana. Only one is psychoactive and that is THC, so we are in the business of supplying the other 112 cannabinoids.
Mr. Shan: This is a pre-revolutionary molecule, and we are still in the early days of education, so there is a great deal to be done in that regard. However, we are seeing more and more every day huge adoption, not only in human consumption, but also in the animal health arena as well.
Mr. Shan: We essentially have three parts to our business. The first part is what we label as our grow operation, and that is the infrastructure that we have in place to support our farming efforts. We farm hundreds of acres in Colorado and we have a 70,000 square foot facility in La Junta, Colorado that supports our grow operation. The second part of what we do is what we call our technical operation, which is responsible for everything from the time the material is batched and ready for extraction, all the way to fulfillment. We have the largest extraction facility in North America. The last part of what we do is that we have worldwide sales and distribution. We currently ship to 22 countries around the world. Our products meet the highest level of compliance standards that exist in the market today.
Mr. Shan: There are always challenges. Part of it is that there is always an issue with the perception of us being a marijuana business and having to educate people about the difference between hemp and marijuana. It is a very basic misconception and something that we need to address. Beyond that some of the other challenges have to do with scaling the business when there is so much demand. Every time we scale the business, demand continues to exceed our ability to supply into it. Therefore, it is more of a challenge to juggle expansion with maintaining production and those demands, while at the same time putting in place GMP practices and SOPs to ensure we are maintaining consistency and quality in our products.
Mr. Shan:
The key differentiator between us and hemp producers out there is that our
core product is a “zero” THC oil, which means that although there are small
levels of THC is hemp, essentially 0.3 is what qualifies industrial hemp,
through our extraction and purification process we remove all of the THC
found in our full spectrum hemp oil. CEOCFO: Do people really care that there is zero THC or is that more from a PR perspective when trying to sell products? Mr. Shan: When we are talking about 0.3% dry mass in the plant material, it is important to understand that when you extract the cannabinoids from the plant material, that concentrates the somewhere between 1.5% to 2%. Therefore, we are now talking about levels that are significantly higher. In addition, people make a distinction between something that is beneficial to them from a health perspective, to manage their pain and inflammation, or whatever ailments they have, and their desire to be exposed to something that has psychoactive properties. There are people in jobs who are being tested for drugs in their system on a regular basis for substance abuse, so it is important to provide a product that they can feel comfortable with and will not result in them losing their jobs. Another example that is even more relevant is that to ship to the EU, the standard for CBD products is “zero” THC, so to sell into the European Union, you have to have a zero THC product. Those are parameters that are being laid out through regulatory oversight that you have to conform to if you want to sell into those markets.
Mr. Shan: Our products come from to categories. There are bulk products that people buy from us when they want to make their own products, and those would be our bulk oils, and our water soluble liquids and powders. We make finished goods because certain of our customers are just marketing and sale companies. If you look at the breadth of what we offer, from gel caps, tinctures to gummies, to topical, I can confidently say that there really is not any product that is not being taken advantage of. The demand is so great for every application, because every application has its own strengths and weaknesses.
CEOCFO: Would you tell us about the products you make for animals and that market opportunity? Mr. Shan: We have one of the leading veterinarians in the knowledge of cannabis in the world, Robert Silver. We currently have three products that are formulated for animals. They are dog chews, cat pills and horse pellets. These are all veterinarian formulated and they are manufactured at the highest standard of manufacturing available in the pet industry. For example, we just launched our dog chews in a soft launch last month and we sold out within 6 hours. That tells you what the demand is. The interesting thing about pets, for example dogs, is that there is not placebo effect in animals. Either something is helping them or not. They cannot lie about it. Many of us are pet owners and are very passionate about our pets, so when you have a dog that you love and it is in distress from arthritis or inflammation because it is ageing, and you give it at hemp based CBD dog chew, then see the relief, as an owner you would be very pleased, as you would not want to this is pet that you love suffer.
Mr. Shan: The key to that is simple. It is finding the right people that can run each of those facets of the business. I have been very fortunate with the quality of the team that we have assembled. We have our Chief Scientific Officer, Dr. Raj Gupta has an incredible pedigree, as does our VP of Sales, head of marketing, head of operations, and head of grow operations. They all come with a great deal of experience and expertise, and that translates into our success across the business and our ability to execute.
Mr. Shan: Today, the way the market is, people who come to us really understand what the difference is between a full spectrum oil vs. an isolate, as well as what the pros and cons are. Therefore, when we are talking to our customers today, the conversation revolves around quantity and delivery schedules, because there is a much higher level of awareness about even a domestic sourced product vs. an import product.
Mr. Shan:
They do not call them weeds for nothing. They are very hardy and they are
quite robust, so there is not much difficulty in growing them. CEOCFO: What is next for Folium?
Mr. Shan:
The core focus is to continue to be what we are currently doing. We are
building out Egypt to Greece, so our international focus is key for the next
year. We also have a product development calendar that very full for the
next year. We plan to launch at least one or two products per month.
Therefore, the focus will be on continuing to scale infrastructure
internally to meet demand. It will be expanding our international business
and it will be to continue to develop products skews that our customers can
take advantage of and to help develop new delivery methods to our customers. Mr. Shan: We moved into our new 70,000 square foot facility, which is now fully operational and allows us to exponentially increase our production capacity, and is helping us to address demand. There are very few people in the market right now that can meet demands of one customer that is looking for 200 or 300 kilos at one time. Therefore, you need someone that can fulfill that kind of demand, and our new facility allows us to do that. As we move forward and continue to scale, we hope to drive cost down and make the product more affordable.
CEOCFO: When did you know you were on the right track? Mr. Shan: In life it is very rare when you are presented with an opportunity, where you can build a successful business, while at the same time be helping people. For us, it was a very simple measurement. When people came to us and told us that they had taken our product and it had helped them in some way shape or form, whether they were dealing with brain tumors or lupus, or whatever the chronic ailments were, they were getting relief because of products we have manufactured and produced. That is an incredible rewarding feeling. It is very uncommon that you would find the opportunity to start or join a business where there is a great opportunity for growth, but also it is rewarding from the standpoint of what you are delivering for your customers.
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“We essentially have three parts to our business. The first part is what we label as our grow operation, and that is the infrastructure that we have in place to support our farming efforts… We have the largest extraction facility in North America. The last part of what we do is that we have worldwide sales and distribution. We currently ship to 22 countries around the world. Our products meet the highest level of compliance standards that exist in the market today.”- Kashif Shan
Folium Biosciences https://foliumbiosciences.com/
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Kashif
Shan