PP 40 | White Label CBD

 

The production of white label CBD is changing the cannabis industry as we know and understand it. The boom in white label CBD has created a renaissance of sorts for the industry, encouraging more variety in the products being put out there. Tony Frischknecht chats with Axie Blundon, the CEO and Co-Founder of Brandstracts, and the Co-Founder of Straight Hemp. With the growing number of redundant CBD products saturating the market, Axie believes that white label CBD can promote the production of more kinds of cannabis, to cater to more people with differing concerns. Cannabis is truly a wonder plant, and Tony and Axie’s discussion only serves to highlight the many different things cannabis can do when given the opportunity.

Listen to the podcast here:

Opportunity Knocks For The CBD Industry With Axie Blundon

CBD: A White Label World

I’ve got an amazing guest. I’ve known this gentleman for quite some time. He is a mover and shaker in the industry. I have Axie Blundon here with me. He has been a leader in the regulated cannabis space for years from the frontlines of legislative change to the private sector of corporate cannabis. He is an entrepreneur and marketer who loves building and launching brands of businesses. Axie, thanks so much for joining us. I’m glad you had a little extra time for us. I know you’re busy moving and shaking. How are you doing?

I’m doing great, Tony. Thank you so much for having me. It’s a pleasure to connect with you as a friend and colleague now in this new way here. Congratulations on the show and thanks for having me.

Thanks, Axie. There is always something new and interesting happening. We’ve got the highs of COVID-19 happening and people are figuring their ways around that. Businesses are changing daily right now as it is but for us that have been in cannabis for quite some time, it’s always changing quickly. It seems to be fluid. Wouldn’t you agree?

Absolutely. It’s a moment where I feel well-prepared and this industry is with all the ebbs and flows.

The reason why I brought you on is, I wanted to talk a little bit about white labeling and what it has to do with producing different products because there are so many hemp CBD products that are coming out. I’ve talked to people and they think that it’s saturated right now or it’s not saturated. The markets here, we’re not sure if the markets are built. There are so many different things being said. I know with Brandstracts, your extraction producing company, you’re doing white labeling for people. I know you’ve created some other products in the past. What has opened your eyes to saying white labeling is something that we’re doing as a company and what we enjoy doing?

I would say, it was backing into the processing and manufacturing side of things that got me personally into it. I come from the front lines as far as retail marketing, experiential marketing, sponsorship events, and those sort of things. With my first product company, we were a white label brand. We filled bottles and we put our label on it but everything that was coming in was a pre-formulated blend. That showed me the power of the brand. Coming from a brand perspective is something that you create a project and you are a part of that product.

The essential part is the brand itself. From there, I got on the processing side and started to look more at what’s inside the product and not the brand. He was able to combine those things, make a product and also develop the labels, brand and messaging that goes on that product. In the cannabis world, it’s very fragmented so there are many brands and people trying to create brands that everybody wants one. To be able to have a great formulation, you suddenly open yourself up to having multiple brands you can service.

I want to go back for a minute because you brought up something where you said you want to know what’s inside the product. Can you expand on that a little bit more and fill people in? What do you mean by what’s inside of it? We know it’s CBD in there, but what does that mean to you as a good product?

That makes me think of my experience in cooking, blending and being able to work on different formulations. In the CBD world, it’s somewhat wide open and you’re able to experiment with different formulations, try different blends and carrier oils. On the processing side, try different solvents and processes to get different cannabinoid profiles and be able to hone in on the full entourage effect.

For the readers out there, when he’s talking about all these different processes, when he’s talking about a carrier, these are delivery systems for the CBD itself, right, Axie?

That’s correct.

Also, different processes of extraction. When he goes into that, he’s more so discussing what it takes to create a better product because different extraction processes produce different products.

Absolutely and that’s evolved over time and continues to.

I don’t think that’s talked about much because people are like, “You just extract it.” It’s the simple word of, “Let’s go and extract that.” It comes down to so many things like efficiency and cost. What people see is safe. What people consider is, “I don’t want to intake that because they extracted it with this product.” As a white label company, how do you come to the fact where you’re going to decide on this is the process we want to use because we think it’s best for our product and our customers?

We’ve come to that through a lot of research and experimenting. We’re always up for evolving. It has changed a lot. I remember coming from the CO2 extraction world where that was the end-all-be-all, supercritical or subcritical CO2 was the only way and looked at other forms as inferior. You can look at each one and give you any set of data and a lot of different pros and cons. Through it evolving, we use an ethanol system and it produces a beautiful full-spectrum profile of cannabinoids and terpenes. We’re able to work with our systems and our IP to manipulate that in different ways. Whereas previously, the ethanol was thought as a bulk and cheap way of doing it.

PP 40 | White Label CBD

White Label CBD: White label products are made to be sold in more locations through different brands as opposed to private label products.

 

I was even in a school of thought that that wasn’t a high-quality process and now that’s completely changed, but I still wouldn’t look at CO2 and say, “We shouldn’t use that or look at that as an option,” because it does do things we need. It can separate the terpenes and you can use those for other uses. It’s like cooking in a way where you can experiment and that can lead to a beautiful result. Even making a mistake or something that turns out not the way you wanted it to be can lead to something incredible. Discovering, isolating a new cannabinoid and getting an incredible flavor. We have strict SOPs for what goes out the door, but we remain open as a test kitchen to come up with new formulations.

You’ve got to always be R&D-ing. It’s research and development to figure out if there is something we’re missing. Is there any way to make this better? Can we have our product here but make a better extraction that does something better for the formulation for the consumer, right?

That’s right. We’ve got to stay open to that and that’s why we don’t offer white label. We delineate between white label which is a product made to be a brand to be sold in many locations. As opposed to a private label product, which is an in-house brand that’s sold in one retail location with one or multiple stores. You think about the generic pasta or generic canned food you see at a Kroger or a grocery store sitting next to the name brand. That’s a private label because that’s only available there. As opposed to white label, which is somebody manning on your walls or a sports star saying, “I want to make a CBD product. I’m going to get somebody to white label that where they pick out a formulation, put their brand on it and distribute it everywhere.” That’s white label versus the private label. A lot of people get those confused. They think that they’re the same thing. From there, another tier would be a custom formulation where they say, “We want to have your private label product, but we want to tweak this ingredient.” They come to the test kitchen, so to speak, with their recipe modifications and work with you in the kitchen or lab to make that for them.

I want to let everybody know that the reason why I have Axie on is he’s got some pretty fun stuff that he’s in the middle of. What are the advantages of somebody coming to you and saying, “Will you make this product for me?” As the business owner on the other end, coming to find a company like you that does white labeling, what are the advantages that are available in that capacity?

As a processor, we’re sitting in the middle of it all with the biomass coming in and products going out. Our job is to make the best product for other companies and help them succeed. We’re a trusted partner and for many of our trusted partners, we’re a competitor. This is the CBD market. I like to call it coopetition, where we’re helping a lot of different people launch something. There are a lot of small farms that got to the end of their year and didn’t know what to do with their product. Maybe they wanted to do a little bit of everything or they wanted to create a brand no matter how small it is. It allows us to get a lot of people off the ground. It allows us to get a lot of products to market. In fact, that’s our real goal with Brandstracts, the processing company is to help farmers get their products to market by manufacturing and distributing unique health products.

I believe we talked before. AQB, LLC is also helping create those products for the farmer or the small business owner, right?

That’s right. AQB, LLC is a business I started in 2016 when I left the corporate cannabis world and that was to focus on CBD supply chain management and distribution. I had a couple of positions. I started a private label brand during that time and started this processing company. I brought those relationships and several farms and brands on board. I have since expanded that. That essentially manages what comes into the factory and also what is made and not sold to another business to sell but is made and sold to the market. It comes in there as well on the distribution side. It isolates the two in a strategic way and also brings them together in a mutually beneficial way.

I’ve talked out of several interviews where you’re right there. You’re watching the growth happen because you have multiple touching businesses that you’re working with. You’re seeing what is going on constantly, right?

That’s right, from a bird’s eye, at the table and an observer perspective.

Why can’t more small businesses process their stuff?

It’s challenging. It’s a lot of startups. It’s a fair amount of risk. The farmers took the ultimate risk by planting this stuff and betting the farm on it.

People don’t understand that though.

I know and next in line is us getting hundreds of thousands of dollars of equipment installed and put up. We’re waiting for the relationships and hoping that the farmers’ crops do well and all these different things. We trusted the farmers that set up in the Southeast in a new market. We set up our processing unit there and we’re able to bring in a lot of biomass in and sent a lot of products out.

Have you built some strategic partnerships along the way as you’re building these white labels with other businesses?

Brandstracts aims to help farmers get their products to market by manufacturing and distributing unique hemp products. Click To Tweet

Yes. That’s where the management and distribution company comes into play. Once there’s something that’s factory-made and we’re sending it out the door, then we engage with them on the sales and distribution side. Many times, it will be a farm that gets to the end of their season, the market crashes on the flower side, they want to turn it into crude. Then they have crude on their hands and they have to sell crude. It’s this whole other thing that they didn’t sign up for and they want to make a product. We can make them the product and they’re like, “How do we sell the product?” It’s not because they’re idiots, it’s because it’s a new market and people are coming at it from all angles. I’ve been in this world for a long time and I have a lot of established strategic partnerships and relationships where we can know how to get things done.

Getting to that point of success takes more than where your plan is going and it doesn’t always end up where you think it’s going to end up. To see those successes, you have to be able to shake, move and pivot quickly. How many people do that have failed to do an extraction at this point?

Most.

When you say most, are we talking 75%?

Yes, and it depends on how you break it down. If you broke it down by who signed up for a processing list and processed anything, it’s probably less than 5%. It depends on how you measure it. To some people, the processing is trimming, bagging or different things. It’s hard to quantify that. It’s hard to get established.

It’s not like 9 out of 10 people are successful at this.

It’s not like opening a dispensary in Colorado in the early days where if you’ve got the license, you were pretty much good or it’s not like buying a dispensary in Colorado these days. It’s back on the front lines. The risk is high and so is the opportunity that it presents.

What type of markets do you guys sell in right now? Are you guys in multiple states? Are you in only one state? I know you’re back in North Carolina, correct?

That’s correct, in Nashville. We are absolutely in multiple states and at this point establishing in multiple countries. We serve the local market here, which is a hyper-local regional market and demographic which is great. There are a lot of small farms. We may manage and work with farms throughout the Carolinas, West Virginia, and New Jersey. There’s a lab in Maine that we work closely with. We sell throughout Florida to Maine. We were also shipping cannabis to Colorado. I thought that was awesome.

Are you not doing that anymore?

Sure, we are. We just sent a large shipment of a trimmed smokable flower to Colorado. It’s the opposite of coals to Newcastle. I thought that was funny.

It’s strange how a 180 happens quickly. You’ve got some massive producers down south that, at least I’ve been hearing, have changed gears quickly into hemp. Your production rate has to be pretty massive at this point already.

Our farm group in 2019 did 100,000 pounds, in the north of that and we’re not processing all that because that’s above our needed capacity. We’ve been finding other labs to work with that have giant facilities that have been converted over for this purpose. We’re not a bulk mass processor. We’re more focused on crafts and going end to end and creating finished products.

Are you familiar with the FDA report that came out regarding that report to Congress on what they came back with CBD and the harmful effects? Have you heard anything?

PP 40 | White Label CBD

White Label CBD: CBD should not be a controlled substance. It should be something that you can put in anything.

 

I did. That was pretty upsetting.

It’s interesting in a way that it’s a little different than what most people thought. What are your thoughts on that? I talked about this in the two episodes before this one. They said that there’s potential for liver damage from using CBD. Whether or not that information is all accurate is one thing to go off of but I’ve got to ask you as a CBD manufacturer and all the products you make, what are you guys doing to either help understand this with the FDA or working with it to stay ahead of it? How are you working on that or how have you thought about it?

First, I’d like to respond to the FDA report itself because while I’m not saying any of that was invalid, I would be interested to see if there was that scrutiny put on the potential cons of anything that are unregulated and readily available as far as alcohol, tobacco, and sugar. I know we’re doing the research, but it seems a little unbiased scrutiny and I can’t get over the alcohol, tobacco, and pharmaceuticals that are under-the-counter and over-the-counter or any types that are readily distributed happily by the pharmacopeia world.

Do all those products damage your liver?

Yeah and the fact is, sure you can find and dig up some kind of dirt or damage a good thing could have to some person, but that doesn’t mean that people shouldn’t have the freedom to do what they want with the things that grow on this planet. More concisely to the FDA, all I can say is we operate and are above and beyond compliant in every area possible, while still being activists towards the best outcome for people, economy, industry and for everything which is undoubtedly to have it be considered a grass substance. It’s generally regarded as safe which means that it can be readily added to any type of product whether it be for consumption, topical application, vaping or smoking and things like that without any major regulatory hurdles. That’s the best outcome possible.

The worst outcome possible without going back to the era of prohibition would be CBD, cannabidiol, or other cannabinoids aside from super high levels of THC considered to be a controlled substance. CBD should not be a controlled substance, it should be something that you can put in anything. I agree that super high THC should be regulated like alcohol like it is in Colorado. If you’re of age, you can get it at a place with your ID that’s regulated, taxed, legal and above board. If you need a super high dose, you get a prescription like an over-the-counter or under-the-counter medicine. The general CBD and cannabinoid market remains aware and regulated at the lowest level by the powers that be such generally regarded as a safe substance or a grass substance.

One thing that I did find interesting and I’d like to get your take on this as well, repeatedly in that report, they talked about basically leaving the window open for people to give them their R&D or their research or feedback on whether this is the case or not. Do you feel that it was honest and open or do you think that’s a ploy to placate the masses that are working on CBD and feel that it is safe for us? What do you think is going on there?

I think it’s honest and that there are good people at the FDA that are in a government agency that’s in an outdated system. We’re seeing that repeat itself day every day in and out. It’s not the government. We need to embrace the government as an institution in a way because it’s there. We can’t get rid of it and it does a lot of good and the FDA needs to be a sovereign place of thoughtful people making good decisions and in the interest of all of us not in the interest of the lobbyists, politicians or corporations. The same goes for the USDA.

I believe that there are good people and we’re going to have a favorable outcome because in my experience and how long I’ve been in this industry, I’ve seen it bring together people from across all aisles, make friends of enemies in society, level the playing field and bring people together because it does so much good. It turns out you can create abundance and have a conscious form of capitalism that doesn’t destroy our lives and destroy the planet. The people that want to go out there, do things and build something and are going to do it and they can still do that without it damaging others.

I talk about this so much and the opportunities that are available, especially right now, with the way things are changing, are immense. One of the things that you’ve come up with and expand your horizon on how to see an opportunity and seize it. I’d like to have you share what you’re working on and what you put together and in a short amount of time.

You must be talking about the sanitizer tsunami.

That’s it.

When Coronavirus started taking off and hitting close to home, my friends and family couldn’t get sanitizer products that the CDC was recommending we all have with us. We realize that we had a large amount of ethanol at the lab and an ability to put it together. We started giving it away to friends and family and providing it to frontline healthcare workers, at-risk workers, and other essential businesses. Some of our regular business accounts caught wind of that and started placing orders. I had this brand that I’ve had sitting on the shelf, Helios, the god of the sun.

I dusted that off the shelf and it was the perfect fit. The sun is the original and best disinfectant. I put this brand that was born for this new product on the label and white labeling my product. We’ve made over 10,000 units. We have over 20,000 in orders and it’s in 40 stores. We were published multiple times. We’ve sold to hundreds of consumers online. We are still giving it away and we’re starting a program that will continue to provide sanitizer products to those in need like frontline workers and healthcare workers at no cost. They will be supported by the purchase of Helios Hand Sanitizer.

The best outcome for people and for the industry is to have cannabis be considered a grass substance so it can be regarded as safe. Click To Tweet

Is it something where somebody buys one and you give one?

That’s essentially the model like the old TOMS shoes model. We’re working out the mechanics on that. It’s a great product. It’s a plant-based, all-natural sanitizer product. It’s ethanol with vegetable glycerin and deionized water right from here at the Blue Ridge Mountains. There’s a spring nearby that has a water facility, and naturally occurring hemp terpenes that give it a wonderful aroma. It’s a nice product and we’re providing it to those that need it and who are willing to buy it on the website or at the store where it’s available. We’re going to continue to give it away.

As a white-label product, from the moment you thought about it until you got some in the bottle and put it together, you own the extraction side of it but for those out there looking to make a product, how fast did that happen for you from day-to-day? How long do you think it took you to put this together?

It was for 24 hours. We had all the ingredients and it was part of building this laboratory. I’ve got these things and you wonder like, “Maybe I’ll never use it.” Frankly, people will leave their stuff and suddenly we’ll have all these containers so it’s like, “I’ll use this.” It was a great environment to launch a product.

For anybody that came in to talk to a white label company, this is an anomaly. You generally can’t turn it around that fast but it does show you the ability of what somebody can do quickly with somebody that has the right materials. Somebody could come into you and say, “I want to make a lotion.” How long would it take me to make a lotion with Brandstracts?

That’s something that we could do in-house but once you get to bulk, that’s why we went back to coopetition work with other ones because I’m not going to say you could come to us and make some Nano tropic face serum that goes in your ears. We do have limits, but we have people. If we can’t do it, we work with people that do, bring in-house and things like that to be realistic and also be optimistic about it. That ability to think that way and to ask others and seek help when you don’t know or can’t do it, that’s also a big part of being able to do it. That’s a big tool to have in your toolbox to be able to say, “I don’t know. Let me ask somebody that might know.”

Back to being realistic about it, do you think it takes a week to put it together or two weeks?

For this product, yeah. In 24 hours, it was in a bottle. I printed the label, designed, thought of the brand and put on the brand. Luckily, we have a printer right down the road that’s amazing, high-quality and can turn things around quickly. All the stars aligned. We were giving it away and then large accounts wanted more of it. We were able to secure our bottles coming from our manufacturer in China and secure plenty more ethanol and all the other ingredients. I’m looking at the compliance side and how to build and scale a sanitizer company because there are no cannabinoids in it, it’s suddenly not even in the cannabis world.

That’s the one thing I was going to touch on and I’m glad you did. For the readers out there that are wondering about what he’s done is unique in the fact that he was in cannabis and now he’s got a product. What are the regulations on hand sanitizer? It’s like soap, right?

I’m pretty well-versed on this now. There are FDA regulations on making sanitizers. We’re not the only ones doing this. We’re one of the first but there are a lot of breweries and distilleries, basically, anybody that has isopropyl or ethanol sitting around and want to help people that are doing this. There are temporary guidelines around it right now that allows us to do this. We’re going to be pivoting the manufacturing and essentially starting a whole new company here for sanitizers to separate it for legal and regulatory purposes. Also, move it into a compounding pharmacy that we already have arranged. That’s in progress now so that it will be in a fully-compliant zone and it can continue to grow.

That’s incredible. I love this story of, “We thought about it, we had it and processed it.” These are things that are, “Time is of the essence,” when you’re in that mode. If you sit and think too long, you tend to think about a lot of reasons why you shouldn’t do it. There are so many why you should, especially when we’re in this funky little market right now. You’ve got to survive as a company so you can be successful because these other goals that you have, they’re still going to include that but now they’ve given you a lifeboat as you’re going through this process.

That persistence and telling that voice in your head that says, “Don’t do it. You can’t do that. You’re not supposed to do that.” The voice that overrode that was like, “No. People need this. This is what we can do to help.” Luckily, CBD is somewhat recession-proof, like THC, but we were able to put people to work. We’ve tripled our workforce. We placed out of work musicians and hospitality individuals to work in a sanitary social distance way and now we have this little bubble of people. We’re running the lab 12 to 18 hours a day to fulfill these orders. We’re still doing a lot of it by hand and it’s all been driven by a real want to help, get in there and do what we can for humanity as we’re at fighting this virus which is more of an existential threat.

I would love to see a world where we would mobilize around everyday threats. There are so many broken systems in our world like the war on drugs, the military-industrial complex, and what we’re doing to the planet, our only home. If we could rally behind that for one second, like our whole planet has rallied behind this virus, then we could make a real permanent change. I see that being what is on the other side of this is going to be some real permanent change for a lot of people, a lot of businesses and society as a whole. I believe that the FDA and USDA are going to get their stuff together and not do the wrong thing. I feel that we’re going to get our stuff together and do the right thing on the other end of this. Where we’re coming from is trying to do the right thing and help. Helios is here to help.

Axie, do you have a website where people can reach out to you or some contact info where they can find you?

PP 40 | White Label CBD

White Label CBD: If the whole planet rallied against coronavirus, we could make real permanent change.

 

For Helios Hand Sanitizer, you can go to HeliosSanitizer.com and for business inquiries around processing and white label, you can go to Brandstracts.com. Feel free to reach out personally my email is Axie@HeliosSanitizer.com and Axie@Brandstracts.com.

I hope all the readers enjoyed this episode as much as I did. One of the things that drive me is seeing people like yourself that find that little fire and basically throw gasoline on it. If you’re a struggling entrepreneur out there like we’ve all been, we’ll continue it as we open new businesses. These are the things that changed the way you look at how the struggle happens because the struggle is going to always happen and you’re going to be in the trenches and digging your way through that, but finding those little pick-me-ups can change your whole life and business life. Those are what fire me up. I know most other entrepreneurs on why they love business because they get to find and solve those problems and come up with solutions.

For you that’s struggling out there, I do feel for you. The next thing I want to say to you is, you have to push on because pushing on to the next step until you see some of that success, that’s what it takes. Axie has been through years in the cannabis industry. He’s worked for some big companies. He’s also started some companies. He’s had a hemp company with CBD hemp, extraction processing, as well as producing products for the end-user right now. This is a lot of stuff that he’s had to go through to where he finally has sparked something that is like, “I’ve got this going and I’ve got this going.”

Please push forward and know that this is normal. This is how it works and this is how you get to success. I want to thank everybody for reading out there. I look forward to sharing more with you. Please reach out to Axie or me. You can always reach out to PlantProblem.com. Leave questions or comments there. Also, I am active on social media so you can find me everywhere there. Thank you so much for reading. I hope I was able to bring something that you guys were able to learn and can take to your own business. I appreciate you guys for reading. See you next time.

Important Links:

Axie Blundon

PP 40 | White Label CBDAxie has been a leader in the regulated cannabis space for a decade, from the front lines of legislative change to the private sector of corporate cannabis. He is an entrepreneur and marketer who loves building and launching brands and businesses. With a passion for progressive and disruptive business strategy, he is at the front lines of new industries spanning cannabis ventures from recreational marijuana markets and cannabis tourism to new uses of hemp.

As CEO & Co-Founder of Brandstracts (Brandstracts, LLC & AQB, LLC dba ‘Brandstracts’), Axie is leading the premiere vertically integrated hemp supply chain and management firm in the Southeastern United States which is quickly growing with a national and global presence.
As Co-Founder & CMO of Straight Hemp, Axie activated and achieved his mission as a young entrepreneur to build a company in an emerging industry on a mission to heal through the power of nature. Straight Hemp is currently at $5MM in annual revenue.

Previously, Axie was the Director Of Sponsorship for My 420 Tours, the first cannabis tourism agency in North America, where he connected brands with cannabis consumers and built bold new experiences in modern cannabis.

Prior to My 420 Tours, Axie Blundon was Director of Events and Sponsorship for Organa Brands, one of the largest cannabis firms in the world, which houses iconic brands such as O.penVAPE.

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