Welcome to the Fear and Greed Daily Interview. I'm Adam Lang. We've covered plenty of sectors and plenty of industries on Fear and Greed. In our time so far, we've done hundreds of interviews, but I can say with absolute certainty that we've never taken a close look at the subject of today's interview. Elixinol Wellness is an ASX listed company that makes and sells products from hemp. The Australian company has been operating for almost 30 years and has since gone global. Oliver Horn is the CEO of Elixinol Wellness, having worked previously at international brands including L'Oreal, Swisse Wellness and Treasury Wine Estates. Oliver, welcome to Fear and Greed.

Welcome to the Fear and Greed Daily Interview. I'm Adam Lang. We've covered plenty of sectors and plenty of industries on Fear and Greed. In our time so far, we've done hundreds of interviews, but I can say with absolute certainty that we've never taken a close look at the subject of today's interview. Elixinol Wellness is an ASX listed company that makes and sells products from hemp. The Australian company has been operating for almost 30 years and has since gone global. Oliver Horn is the CEO of Elixinol Wellness, having worked previously at international brands including L'Oreal, Swisse Wellness and Treasury Wine Estates. Oliver, welcome to Fear and Greed.

Thank you, Adam. It's good to be here.

Thank you, Adam. It's good to be here.

Let's make it clear from the outset, Oliver, this isn't about cannabis. How do the hemp products that you make differ from the illegal drug?

Let's make it clear from the outset, Oliver, this isn't about cannabis. How do the hemp products that you make differ from the illegal drug?

That's absolutely right. We are not in the business of illegal drugs at all. We are a publicly listed company and we produce really two kinds of products and they are all derived from the hemp plant. So the one part of our portfolio is CBD or this is an acronym for cannabidiol. And that is really a compound found in the hemp plant, which is highly medicinal in its nature and has very many medicinal applications. And it's low in THC, which is stands for Tetrahydrocannabinol, and that is a compound that usually gets you high and that's what you find a lot of times in illegal drugs. So our products are hemp based low in THC, so it doesn't get you high but high in CBD and those are the compounds that really have huge medicinal positive impacts. The second part of our business is really our hemp foods business. Again, from the hemp plant and hemp plant in itself is a highly sustainable product in itself. It's a great carbon trap. It's very sustainable in terms of how you grow it throughout various seasons throughout the year, it's low in use of water, doesn't need any pesticides or herbicides. So it's very easy to grow crops very quickly and is a superfood in itself. And so we are harnessing that hemp plant to produce foods and those medicinal cannabis products.

That's absolutely right. We are not in the business of illegal drugs at all. We are a publicly listed company and we produce really two kinds of products and they are all derived from the hemp plant. So the one part of our portfolio is CBD or this is an acronym for cannabidiol. And that is really a compound found in the hemp plant, which is highly medicinal in its nature and has very many medicinal applications. And it's low in THC, which is stands for Tetrahydrocannabinol, and that is a compound that usually gets you high and that's what you find a lot of times in illegal drugs. So our products are hemp based low in THC, so it doesn't get you high but high in CBD and those are the compounds that really have huge medicinal positive impacts. The second part of our business is really our hemp foods business. Again, from the hemp plant and hemp plant in itself is a highly sustainable product in itself. It's a great carbon trap. It's very sustainable in terms of how you grow it throughout various seasons throughout the year, it's low in use of water, doesn't need any pesticides or herbicides. So it's very easy to grow crops very quickly and is a superfood in itself. And so we are harnessing that hemp plant to produce foods and those medicinal cannabis products.

So it really is an incredible plant in many ways. And bar the sort of illegal aspects of it, there's so much good that can come from it. When you're marketing your products and even dealing with investors, how hard is it to distance yourself from the stigma and any misconceptions?

So it really is an incredible plant in many ways. And bar the sort of illegal aspects of it, there's so much good that can come from it. When you're marketing your products and even dealing with investors, how hard is it to distance yourself from the stigma and any misconceptions?

It's taken a number of years to shed the stigma that still exists around cannabis because people do it associated with illegal activities by and large. But I must say, over the last couple of years, with regulation changes and investors becoming increasingly sophisticated and more and more public listed companies operating in that space, this is really not an issue anymore at this stage. However, what is an issue a lot of times is the regulatory environment that companies like ours operate in because it's still a very new industry, a new market with regulations changing all the time and being very complex and varied across the globe. And that's where we spend the most time on with our investors to talk about how those regulation changes because that has really set the scene for us on how we can operate in various jurisdictions. And that's probably now currently the major topic that we are addressing.

It's taken a number of years to shed the stigma that still exists around cannabis because people do it associated with illegal activities by and large. But I must say, over the last couple of years, with regulation changes and investors becoming increasingly sophisticated and more and more public listed companies operating in that space, this is really not an issue anymore at this stage. However, what is an issue a lot of times is the regulatory environment that companies like ours operate in because it's still a very new industry, a new market with regulations changing all the time and being very complex and varied across the globe. And that's where we spend the most time on with our investors to talk about how those regulation changes because that has really set the scene for us on how we can operate in various jurisdictions. And that's probably now currently the major topic that we are addressing.

Okay. It's great that we've made progress. It's also interesting that sometimes the heritage and the law around our different products, such as alcohol, possibly easier to start up a gin distillery than it is to start a legitimate hemp plantation and produce it for commercial use. How big is the hemp industry in Australia and globally?

Okay. It's great that we've made progress. It's also interesting that sometimes the heritage and the law around our different products, such as alcohol, possibly easier to start up a gin distillery than it is to start a legitimate hemp plantation and produce it for commercial use. How big is the hemp industry in Australia and globally?

Look, there's various sources and it's incredibly fast growing and it's getting very, very big. Global CBD, I call it medicinal cannabis for lack of a better word, here is estimated to be around six billion US dollars and growing at around 16 per cent year on year. So very significant growth that we're seeing. Here in Australia, at home, the legal cannabis market is estimated to be around 240 million US dollars and growing at a whopping sort of forty six per cent. So it's a high growth market as well. But really, what brings it to the fore? How high growth and how in demand those medicinal cannabis products are is the number of prescriptions that are approved by the TGA (Therapeutic Goods Administration) here in Australia. And currently there are around ten thousand prescriptions every month that are being approved by the TGA for patients in need. And this is just the legal market, those 240 million US dollars. We believe that there's probably an illegal market from individuals and patients buying online from overseas websites that are shipping directly to Australia and that market is probably five times bigger than we're seeing here in legal markets. So a huge consumer demand, really, high growth and already very, very sizeable.

Look, there's various sources and it's incredibly fast growing and it's getting very, very big. Global CBD, I call it medicinal cannabis for lack of a better word, here is estimated to be around six billion US dollars and growing at around 16 per cent year on year. So very significant growth that we're seeing. Here in Australia, at home, the legal cannabis market is estimated to be around 240 million US dollars and growing at a whopping sort of forty six per cent. So it's a high growth market as well. But really, what brings it to the fore? How high growth and how in demand those medicinal cannabis products are is the number of prescriptions that are approved by the TGA (Therapeutic Goods Administration) here in Australia. And currently there are around ten thousand prescriptions every month that are being approved by the TGA for patients in need. And this is just the legal market, those 240 million US dollars. We believe that there's probably an illegal market from individuals and patients buying online from overseas websites that are shipping directly to Australia and that market is probably five times bigger than we're seeing here in legal markets. So a huge consumer demand, really, high growth and already very, very sizeable.

So I guess let's look at those two different categories. You've got the medicinal side and the food based side and Elixinol Wellness is part in that growing industry. What is your company's disposition in terms of your balance of medicinal and food products?

So I guess let's look at those two different categories. You've got the medicinal side and the food based side and Elixinol Wellness is part in that growing industry. What is your company's disposition in terms of your balance of medicinal and food products?

We have a pretty balanced portfolio. For us, Hemp Foods Australia is really our base in Australia, which is currently contributing to around 40 per cent of our revenues at a break even level. So it's a profitable business, very well established and with a strong growth trajectory. And the other 60 per cent for us are really in the medicinal cannabis space but with revenues really generated outside of Australia at this stage, still, with a majority of those revenues coming from the US market, really, where we have an operation for the last six, seven years and we've been one of the pioneers there, one of the most established brands, we're having a really good footprint and consumer recognition. And so think about us as 60 per cent, medicinal cannabis, 40 per cent hemp foods based here out of Australia.

We have a pretty balanced portfolio. For us, Hemp Foods Australia is really our base in Australia, which is currently contributing to around 40 per cent of our revenues at a break even level. So it's a profitable business, very well established and with a strong growth trajectory. And the other 60 per cent for us are really in the medicinal cannabis space but with revenues really generated outside of Australia at this stage, still, with a majority of those revenues coming from the US market, really, where we have an operation for the last six, seven years and we've been one of the pioneers there, one of the most established brands, we're having a really good footprint and consumer recognition. And so think about us as 60 per cent, medicinal cannabis, 40 per cent hemp foods based here out of Australia.

Great. Okay, so this month you've started importing CBD oil products under the Therapeutic Goods Administration Special Access Scheme. Who benefits from that in terms of the consumers?

Great. Okay, so this month you've started importing CBD oil products under the Therapeutic Goods Administration Special Access Scheme. Who benefits from that in terms of the consumers?

Yes, we've struck a distribution agreement with Health House International, also a publicly listed company in Australia, and we're just in the process of actually importing our products. We expect them to be in market within the next eight weeks really. And who really benefits from that is consumers or patients really who are suffering mostly from chronic pain, stress, anxiety or sleep issues. And that's really the typical patient that goes to a specialist prescriber. And that specialist prescriber can then prescribe products that are currently not registered with the TGA. That's why it's called a special access scheme. And that prescriber would identify what the right product is for the patient and prescribe a medicinal cannabis product if he or she thinks that's the right way to go. So that's currently a very limited pathway here in Australia for those patients. And it's still very hard for patients to actually find a prescriber. It's getting more prevalent, but it's still a very nascent sort of industry. But more and more prescribers are coming online now and prescribing CBD products

Yes, we've struck a distribution agreement with Health House International, also a publicly listed company in Australia, and we're just in the process of actually importing our products. We expect them to be in market within the next eight weeks really. And who really benefits from that is consumers or patients really who are suffering mostly from chronic pain, stress, anxiety or sleep issues. And that's really the typical patient that goes to a specialist prescriber. And that specialist prescriber can then prescribe products that are currently not registered with the TGA. That's why it's called a special access scheme. And that prescriber would identify what the right product is for the patient and prescribe a medicinal cannabis product if he or she thinks that's the right way to go. So that's currently a very limited pathway here in Australia for those patients. And it's still very hard for patients to actually find a prescriber. It's getting more prevalent, but it's still a very nascent sort of industry. But more and more prescribers are coming online now and prescribing CBD products

And hopefully it makes a very meaningful difference for those people that can receive it. What does a change like this, what does it mean for the company?

And hopefully it makes a very meaningful difference for those people that can receive it. What does a change like this, what does it mean for the company?

Look, we've been in the CBD space for a number of years now. And for us to be coming here to Australia into our home market, really with CBD products is just a natural evolution of our company. We have a really good footprint with Hemp Foods Australia. We have a good team. We have our corporate offices here, and so we can leverage all those resources to bring our products to market. And what that means for us now is that we are developing a route to market through medical and medicinal prescribers and with Health House to then really access and provide patients with safe and effective product solutions. And given our history and our credentials here, I think we have a really good opportunity to play. But I think we're also very realistic that the Australian market is still a very small market in terms of its consumer base, and our key priorities are really still in the US market. And just purely because of the size of the consumer demographics there and our Hemp Foods Australia business. Our Hemp Foods Australia business is generating over four million dollars of revenues, profitable as I said and is positioned in the food space which is much more accessible, higher growth, is bang on consumer trend in terms of sustainable plant based super nutrition, and that's really our priority. So the CBD medicinal cannabis space here in Australia for us is definitely not a big priority for us. We're taking an opportunistic approach to this at this stage.

Look, we've been in the CBD space for a number of years now. And for us to be coming here to Australia into our home market, really with CBD products is just a natural evolution of our company. We have a really good footprint with Hemp Foods Australia. We have a good team. We have our corporate offices here, and so we can leverage all those resources to bring our products to market. And what that means for us now is that we are developing a route to market through medical and medicinal prescribers and with Health House to then really access and provide patients with safe and effective product solutions. And given our history and our credentials here, I think we have a really good opportunity to play. But I think we're also very realistic that the Australian market is still a very small market in terms of its consumer base, and our key priorities are really still in the US market. And just purely because of the size of the consumer demographics there and our Hemp Foods Australia business. Our Hemp Foods Australia business is generating over four million dollars of revenues, profitable as I said and is positioned in the food space which is much more accessible, higher growth, is bang on consumer trend in terms of sustainable plant based super nutrition, and that's really our priority. So the CBD medicinal cannabis space here in Australia for us is definitely not a big priority for us. We're taking an opportunistic approach to this at this stage.

Great. Stay with me, Oliver. We'll be back in a minute.

Great. Stay with me, Oliver. We'll be back in a minute.

My guest this morning is Oliver Horn, CEO of Elixinol Wellness. So let's talk about the food aspect of what you're doing with hemp at the moment. If I was looking to consume your products, where would I find it? What am I looking for?

My guest this morning is Oliver Horn, CEO of Elixinol Wellness. So let's talk about the food aspect of what you're doing with hemp at the moment. If I was looking to consume your products, where would I find it? What am I looking for?

You can go pretty much in every whole food store around the country. You can find it in IGAs, in delis, and Woolworth's as well, and Costco. So we're really well distributed nationally. And that's really exciting because we've been a leader in the industry for a long time. By far the biggest player when it comes to branded goods sales and having our products in full distribution, readily accessible, given the consumer dynamics and the trends that we're seeing is a very rewarding position to be in.

You can go pretty much in every whole food store around the country. You can find it in IGAs, in delis, and Woolworth's as well, and Costco. So we're really well distributed nationally. And that's really exciting because we've been a leader in the industry for a long time. By far the biggest player when it comes to branded goods sales and having our products in full distribution, readily accessible, given the consumer dynamics and the trends that we're seeing is a very rewarding position to be in.

So for the uninitiated, what am I looking for? If I go into one of those stores, how would I be buying one of your products?

So for the uninitiated, what am I looking for? If I go into one of those stores, how would I be buying one of your products?

Of course, you look really for Hemp Foods Australia products or brands Essential Hemp.

Of course, you look really for Hemp Foods Australia products or brands Essential Hemp.

Yep.

Yep.

Sativa (Skincare) which is our skincare brand based on hemp. And then we have Grounded which are bread spreads based in hemp. And you really look for Hemp Seeds, which is probably our best seller. We have organic hemp seeds, an Australian grown hemp seed, but then also hemp oils. And they're very versatile oils for cooking purposes, for salads and so forth. Highly nutritious, very delicious. And those are probably our key products.

Sativa (Skincare) which is our skincare brand based on hemp. And then we have Grounded which are bread spreads based in hemp. And you really look for Hemp Seeds, which is probably our best seller. We have organic hemp seeds, an Australian grown hemp seed, but then also hemp oils. And they're very versatile oils for cooking purposes, for salads and so forth. Highly nutritious, very delicious. And those are probably our key products.

So in your case, this is actually product that you can afford to be eating for yourself, right?

So in your case, this is actually product that you can afford to be eating for yourself, right?

Absolutely. Absolutely. Look at me, out here at home. But consumers use them mostly on salads in Bircher muesli, on porridge, as toppings. I mean, it's incredibly versatile. It's a bit of a nutty flavour and it's so it's delicious by itself. But as an ingredient, as a food ingredient, it's actually fantastic. And we use them in bread spreads a lot similar to Nutella's bread spread, for example, and those products are growing in popularity very, very quickly.

Absolutely. Absolutely. Look at me, out here at home. But consumers use them mostly on salads in Bircher muesli, on porridge, as toppings. I mean, it's incredibly versatile. It's a bit of a nutty flavour and it's so it's delicious by itself. But as an ingredient, as a food ingredient, it's actually fantastic. And we use them in bread spreads a lot similar to Nutella's bread spread, for example, and those products are growing in popularity very, very quickly.

Terrific. Now, just going back to the medicinal products, the CBD oil products. Am I correct in saying that Australia's regulations mean you can't actually produce certain products here?

Terrific. Now, just going back to the medicinal products, the CBD oil products. Am I correct in saying that Australia's regulations mean you can't actually produce certain products here?

Not quite. The regulation has really come a long way. So you can grow, extract, produce medicinal cannabis products here within limits. And there are certain exceptions. But by and large, you know, we're seeing a supply chain and value chain emerging in Australia. Previously, a lot of products were produced overseas and imported, but that is changing very rapidly. However, it is a very highly regulated pathway and it's still subject to drug regulations to a large extent. So it's very much regulated. But what we do see, we see the market opening up the World Health Organisation, the United Nations has declared CBD as safe, and that has really given the impetus for a lot of markets like Australia to open up access to these wonderful products that are made from hemp. And one of the most recent announcements was from the TGA to down schedule CBD from schedule four to schedule three, which means that you can actually, in the future get CBD products over the counter in any pharmacy. And no products at the moment are available. They're still being developed, but as of 2022, consumers can simply go into a pharmacy and grab them off the shelf and get them from the pharmacies.

Not quite. The regulation has really come a long way. So you can grow, extract, produce medicinal cannabis products here within limits. And there are certain exceptions. But by and large, you know, we're seeing a supply chain and value chain emerging in Australia. Previously, a lot of products were produced overseas and imported, but that is changing very rapidly. However, it is a very highly regulated pathway and it's still subject to drug regulations to a large extent. So it's very much regulated. But what we do see, we see the market opening up the World Health Organisation, the United Nations has declared CBD as safe, and that has really given the impetus for a lot of markets like Australia to open up access to these wonderful products that are made from hemp. And one of the most recent announcements was from the TGA to down schedule CBD from schedule four to schedule three, which means that you can actually, in the future get CBD products over the counter in any pharmacy. And no products at the moment are available. They're still being developed, but as of 2022, consumers can simply go into a pharmacy and grab them off the shelf and get them from the pharmacies.

Great. So you, Oliver, you were brought on at Elixinol Wellness last year to reset the company's strategy. Unfortunately, like many businesses in 2020 and this year, that has also meant a significant reduction in costs. How challenging was it to walk into a business that's been operating since the early 90s, 1993, and implement major change?

Great. So you, Oliver, you were brought on at Elixinol Wellness last year to reset the company's strategy. Unfortunately, like many businesses in 2020 and this year, that has also meant a significant reduction in costs. How challenging was it to walk into a business that's been operating since the early 90s, 1993, and implement major change?

It's been extremely challenging, but it's been also extremely rewarding. I mean, just to recap what we have done. We really simplified our business strategy to the market areas that are for us, high margin, high growth, and at the same time, we've taken significant cost out to reduce our cost base by almost 50 per cent. So half the size we used to be while at the same time relaunching our global product portfolio. Only last year in April, we relaunched our entire new consumer brand, Elixinol, brought on new talent, driven our digital eCommerce capability because that's how the consumers are shopping and really resetting and rejuvenating our entire business on half of the cost than we used to be with great new products that we've been bringing out. And it's sort of I see it now that towards the end of the year, this turnaround phase and rejuvenation phase is really completed. We have a great team. Our balance sheet is extremely strong. We have a lower cost base and great new products. And that's really for us when we're looking at phase two of our journey where we're harnessing all that to bring off new products and deepening our distribution across international markets. So it's been hard and it's more so you don't even talk about it anymore because of COVID. Because certainly when I started in April last year, I was still expecting to travel the world and visit our offices in Europe, in the US. And I've been confined to the bedroom like so many of us here in Australia. And that's been another complexity. It's just been hard to build culture and drive the right behaviours through the organisation. But I'm pleased to say that we've gotten there despite all the challenges.

It's been extremely challenging, but it's been also extremely rewarding. I mean, just to recap what we have done. We really simplified our business strategy to the market areas that are for us, high margin, high growth, and at the same time, we've taken significant cost out to reduce our cost base by almost 50 per cent. So half the size we used to be while at the same time relaunching our global product portfolio. Only last year in April, we relaunched our entire new consumer brand, Elixinol, brought on new talent, driven our digital eCommerce capability because that's how the consumers are shopping and really resetting and rejuvenating our entire business on half of the cost than we used to be with great new products that we've been bringing out. And it's sort of I see it now that towards the end of the year, this turnaround phase and rejuvenation phase is really completed. We have a great team. Our balance sheet is extremely strong. We have a lower cost base and great new products. And that's really for us when we're looking at phase two of our journey where we're harnessing all that to bring off new products and deepening our distribution across international markets. So it's been hard and it's more so you don't even talk about it anymore because of COVID. Because certainly when I started in April last year, I was still expecting to travel the world and visit our offices in Europe, in the US. And I've been confined to the bedroom like so many of us here in Australia. And that's been another complexity. It's just been hard to build culture and drive the right behaviours through the organisation. But I'm pleased to say that we've gotten there despite all the challenges.

It sounds like, Oliver, that you've taken one of the oldest plants known and turned it into a very modern business at Elixinol Wellness. Well done to you.

It sounds like, Oliver, that you've taken one of the oldest plants known and turned it into a very modern business at Elixinol Wellness. Well done to you.

Yeah, thank you very much. And it's just the beginning. Look, we're at a very early inception point of a huge consumer trend for sustainable nutrition and being established in that category for so long, as you said, and having so much credibility and kudos and expertise and IP is just an incredibly fortunate position that I'm finding myself and the business find itself in. And we're just excited about the next 10 years because consumers will see the benefit of the hemp plant and regulations will change and with that markets will open.

Yeah, thank you very much. And it's just the beginning. Look, we're at a very early inception point of a huge consumer trend for sustainable nutrition and being established in that category for so long, as you said, and having so much credibility and kudos and expertise and IP is just an incredibly fortunate position that I'm finding myself and the business find itself in. And we're just excited about the next 10 years because consumers will see the benefit of the hemp plant and regulations will change and with that markets will open.

Oliver, I've learned a lot. I've really enjoyed talking to you. So thank you for talking to Fear and Greed.

Oliver, I've learned a lot. I've really enjoyed talking to you. So thank you for talking to Fear and Greed.

Fantastic, Adam. Thanks for having me. It's been a pleasure. And all the best.

Fantastic, Adam. Thanks for having me. It's been a pleasure. And all the best.

That was Oliver Horn, global CEO of Elixinol Wellness.

That was Oliver Horn, global CEO of Elixinol Wellness.

This is the Fear and Greed Daily Interview. Join Sean Aylmer every weekday morning for the full Fear and Greed podcast with all the business news you need to know. I'm Adam Lang. Enjoy your day.

This is the Fear and Greed Daily Interview. Join Sean Aylmer every weekday morning for the full Fear and Greed podcast with all the business news you need to know. I'm Adam Lang. Enjoy your day.