While hemp-derived products are already big business, they’re set to skyrocket as hemp begins to take market share from traditional wellness and household brands.
Here to tell us about it is Michael Cammarata of Neptune Wellness Solutions, one of Canada’s leading cannabinoid extraction companies.
Learn more at https://neptunecorp.com
- Michael’s background in hemp and how he came to be the CEO of Neptune Wellness
- An inside look at Neptune and how it’s evolved from biotech to health and wellness since founded in 1998
- Why hemp is becoming so popular as an ingredient in consumer packaged goods
- The most popular hemp-derived products in the wellness industry right now
- Neptune’s partnership with Jane Goodall and their upcoming line of hemp-derived hand sanitizers and essential oils
- How Neptune is innovating new technology that will make hemp goods more cost-effective for customers
- How COVID-19 is affecting the hemp wellness and household industries
- Where Michael sees the hemp industry heading over the next few years as it continues to make its way into the wellness arena
Matthew Kind: Hi, I'm Matthew Kind. Every Monday, I look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com. That's C-A-N-N-A insider dot com. Now, here's your program.
Hemp derived products are already big business, but they're set to become even bigger as hemp will start to take market share from traditional wellness and household brands. Here to tell us more about it is Michael Cammarata CEO of Neptune wellness. Michael, welcome to CannaInsider.
Michael Cammarata: Thank you for having me.
Matthew: Give us a sense of geography where are you in the world today.
Michael: I'm in southern Florida.
Matthew: Great. What is Neptune Wellness at a high level?
Michael: It's a health and wellness company that originated almost two decades ago as biotech company and now what we focus on is we have, in Canada, we do legal cannabis, in the states we do hemp. We also have a business unit called Biodroga which is a turnkey solutions for a lot of brands. Hundreds of brands come to us, they want to develop products to help with sleep or they want to develop products that help with stress or digestive and then we formulate with our scientists and our teams the products and we manage the supply chain for them.
Biodroga is a turnkey solution for a lot of big brands. Then we also have our portfolio of our own brands then could force remedies and ocean remedies that are really led with purpose. Like forest remedies is about planting trees with every purchase and ocean remedies is about cleaning up the ocean and giving nutrition to people in need. Every purchase in omega-3 product in an ocean remedies will give nutrition for a year to somebody in need.
We've had great partners like Dr. Jane Goodall Institute, One Tree Planted, and Vitamin Angels and others that have joined us on these journeys to really turn around consumption to a force of good. I think if consumers can go to a store, and they have an option of picking a brand that may be designed very well, and have all the right ingredients, that they can actually pick a brand and it not only has all the key, the transparency and all these things but actually can make a difference in somebody's life on this planet or on this earth, they're going to go with that.
I think that as natural products and health and wellness products and hemp become more readily available, it's going to allow us to really create that plant-based revolution that's happening inside the household.
Matthew: Okay. Michael, can you share a bit about your background and journey and how you got into the cannabis and hemp space and became CEO of Neptune?
Michael: Yes. I was dyslexic as a kid and and, honestly, I started looking for a solution to survive. I played a computer game called StarCraft when I was 11 years old, got really good at it and put my passion into it and ended up joining a gaming clan and that's back before you were again paid millions of dollars to be a top player. Now, people get paid that. What it did teach me is really community online.
I started my first web hosting company when I was 12 years old and sold that for into the millions and was really very successful part. Then I went to online advertising at 17. I was one of the largest providers of inventory to a company called advertising.com, which then sold very well for 498 million. At 17, is when I started investing in companies. Keep in mind my motive as a kid was really to try and make it, try to show self like be able to prove to teachers that said I wasn't going to amount to anything or knowing that I wasn't the best academic. I was really trying to prove my self worth. Then I started investing in companies.
There's a turning point in my life probably when I was about 24. I went from web hosting to advertising, then I started investing in companies, and then with my family office random occurrence. Then 24 was when I started -- I always wanted to manage rock band. I ended up with a pop band, Big Time Rush. I was working with Sony and Viacom and learned very quickly about brands, and that the consumers' really looking for alternatives and plant-based solutions.
I thought like, what am I really doing on this planet? How am I contributing? I've obviously been very gifted and had that work penny by penny, dollar by dollar and build success. I wanted to make sure that from that point on, I was in this meeting with some big executives and talent and, basically, my dad was in like the hospital and they were like, "If you leave to go see your dad and you lose this negotiation, then you'd be fired."
I really had that turning point where I was like, okay, I need to start making products that change the world and have a positive impact on this planet, and working with people to really make a difference. That's when I decided to get in and research different options. I wanted to start with deodorant because I think the simple things in life make the biggest difference. There was no plant-based deodorants that were working. I tried a lot of different ones.
I look at armpits is like the exhaust for your body. For so long, people just didn't. They were putting aluminum and all these things on it and keeping all the toxins inside. I figured like that's going to be the first trial point. In 2015, teamed up with some people, we started a company called Schmidt's Naturals. Then we were pretty fast, from four people, 1200 square feet to over 180 people and we're on our way to an IPO and ended up selling to Unilever.
Unilever is like, come work for us. At that time I was like, I don't know about that. I'm the kid who never went to college. I think completely outside the box. I know that because my father ran some of the biggest companies in the world and worked his way up from starting a company all the way to be president level and then basically running the companies. I saw how long it took him and I was like, you have 160,000 employees, I don't even know what the word bit meant before that and that means like a percentage. It's not a full percentage, it's like the bits everyone by bits and I like to grow by triple digit growth.
I ended up -- ironically, a family friend of mine, Dr. Jane Goodall knew Paul Polman, he was global CEO at Unilever at the time. I was like, "You know what? I'm going to take this opportunity to really get my PhD in business." I ended up joining Unilever as one of the CEOs and focusing on my division. At Unilever, we took Schmidt's from being a deodorant brand to a personal care brand, to a homecare brand and then launched it in over 100 countries.
At the same time, I also developed out new ways to market, like using artificial intelligence and develop Alexander, which is Unilever's North American AI that uses communication to market and bypasses the traditional marketing mechanisms. Then what really led me into the hemp space was working on the hemp and CBD strategy because Unilever has like over 700 brands. What I started finding out is that with each product, there's like an ingredient story. There's a trend then there's the the substantiation, the purpose, the what it does, and all this.
This plant-based revolution that's happening and started with a meat burger, right? It's also happening inside the whole household. These categories haven't been innovated in so long, and there's some very toxic chemicals in terms of the house cleaning products, and some of that -- Even shampoo, if you use synthetic fragrance in a product, it gets paralyzed when you're in the shower because of the steam, and it can cause hair loss or potentially neurological issues if you use for long periods of time.
Getting rid of synthetics from fragrance, that is a huge thing. Then, when I found hemp, hemp was really interesting because in a plant-based deodorant, which Schmidt's was really good. Before Schmidt's, most of the deodorants were liquid-based like Tom's of Maine, et cetera. With Schmidt's, we really cracked that -- We didn't even know we did this at the time, but we made a plant-based deodorant with using different air powder and stuff that helped absorb wetness. It was actually the very strong ingredients that made the performance better.
What we're looking at is, in hemp deodorant, you can add moisturizing effect which is really good for the skin, especially in your sensitive areas. When you go in to CBD, CBG and a whole bunch of different cannabinoids and when I started learning about was there antifungal and antibacterial properties, those antifungal and antibacterial properties can make a natural deodorant last for 48 hours. That's like unheard of moreover, like the secrets in and the clinical strength type products, those are the ones that have this 48-hour claims and longer claims.
In a natural plant-based deodorant, you can only get up to like a 24-hour claim without using different cannabinoids. The reason why deodorant is so important is consumed daily with a consumer, but it's such a huge category. When I started looking like, oh my God, that hemp and CBD and CBG and all these different cannabinoids are good and they're going to allow the CPG world to start having organic growth again, like on a much larger scale.
It's going to help allegedly these master brands at the they can innovate by just adding the CBD and CBG product. Everybody in the cannabis industry has been focusing on consumption, consumption, consumption, consumption. They missed the picture at that point on the household product that move hundreds of millions and billions of dollars of revenue each year that are going to benefit from the super ingredient. When I was at Unilever, we started looking at the different companies in the space. We've looked to see which one's a GMP, truly GMP, and I saw an opportunity where there isn't many people in this place that truly have GMP.
There's a company that was in extraction in the States that had an outdoor extractor. That's no way that that could be GMP right next to Some people in Canada, they were saying that GMP processes but they're having people lug product up and downstairs. The true GMP, not just the finished process, but all the way to where it starts at the seat.
With Neptune, when I found Neptune, it was an interesting spot because it had a pharmaceutical creating facility and they've spent over $50 million developing and it was doing curl oil. It had the bye-drugging business unit. It had a whole regulatory team. It was doing international and domestic shipments for varied products. It had a royalty business. It had a stable business. I looked at Neptune as an opportunity to have the lowest cost of infrastructure in the cannabis business.
Meaning, we start addressing the needs of the CPG companies, the traditional consumer packaged goods companies, to be able to develop products for them because there's going to be a day where all other seven hundred brands at Unilever and all those P&G in nationally, they added one other skill, add a CBD ice cream which they've talked about publicly when it's allowed. Or, Schmidt's added a hemp-based deodorant, which is the first hemp product in Unilever North America.
There's so much value in this ingredient, and people were focusing on a consumption attribute. I use the capsules from Forest Remedies. My brain goes 1,000 miles an hour and I always have to slow myself down, but I use those capsules to help me when I had panic attacks and stuff along those lines. That's how I initially got used to CBD, and it's really full-spectrum and broad-spectrum that worked for me.
Then being at Unilever, seeing the market, and seeing that there's a gap and then finding Neptune, and through all this thing, I was like, "This is an opportunity of a lifetime." This is like going into the .com bust but having an infrastructure that no one else has to be able to be a leader and coming out of it.
I knew I was going into a crazy sector and a lot of people were like, "Why in the world would you want to be a public CEO when you're walking into a sector that's depressed, you're walking into people that are spending way too much money in all these different areas, the market's unproven and all these different things, and then you get a global pandemic." That one, I didn't count on, but I saw those are all the opportunities. If I can make Neptune have the meanest, meanest, fastest infrastructure, and be agile because our burn rate's very low.
Canada, we expedited our sales license to deal sub-directly with the consumer. We launched two brands in two months. I brought IFF, which is in my mind the leader in extraction for decades. Extraction is not new to them and essential oils and cannabis and hemp extracted pretty similarly, you can use the equipment for both. Bringing IFF as a strategic partner in the Neptune was a really important moment because they came with me on this journey to go into Neptune.
Then I looked at like, "How are you going to market the brand? How are we going to make that mega-brand in hemp and cannabis?" We needed an immediate partner. That's when we brought in American Media, which owns Us Weekly, In Touch Magazine because it allowed us to really start on getting to be able to start marketing our brand.
Then, I'm like, "What was the biggest success when we came to retail?" Is being able to merchandise and get your product on the shelves and have unique things. Like in Costco, you want to have a fence in there when you walk into the store, that's a high volume seller. When you look at the grocery chains, you want to be on the checkout, you want to be next to the magazines. We sat down and I'm like," Okay, we got American Media as a partner, they have this distribution company. Everywhere there's Us Weekly, In Touch Magazine, OK! Magazine, and all the properties they have, they merchandise that store twice a week.
No one's going to have the ability to touch that, even the strategics don't merchandise that many locations. There's 22.9 million places of this appointed distribution that we can get access to through our partnership with American Media. The story kept coming together and the partners were joining me on this. I spent like nine months going back and forth at looking, making sure I was picking the right partner. Obviously, everything that I do, I invest my own money into.
When I joined Neptune, the next week we raised $41 million. The unique thing about Neptune is we managed to keep our capital structure very simple because not only am I CEO and I built brands from scratch and had to always innovate and problem-solving in real-time and guess the odds on a daily basis, the thing that I always look for is I'm also an investor. I want to see how am I going to get my return, who has the right to win, and who we can pivot into the different opportunities.
Neptune had the ability to go into personal care, home care, beauty, and playing the non-vices category, which allowed us to have much bigger upside potential. It also has truly some of the largest extraction capacity in North America. We can wrap up doing 3 million kilos of extraction. We are at 200,000 kilos of extraction in Canada alone. We have 1.5 million in North Carolina. We have IFF, which has really been doing extraction for a decade, helping us, support our teams, sharing knowledge, sharing IP, helping us develop app, getting us access to their 35,000 customers around the world.
Coming into it, it was exciting. Definitely, I always knew I was walking into an interesting sector, but that was the opportunity for me. I think that when people look at Neptune, they got to understand is like my goal of building the company is to be the safest brand in cannabis. We have a CPG. We have nutraceutical business. We have this, plus the upside of cannabis. The ingredients that you can get from that cannabis plant apply to all of these things.
From the investor side of myself, I want to make sure that I had a diverse foundation that I can make stronger and that's what I was able to do it, Neptune and continue doing. We've accomplished a lot, a lot of these things were in the first six months at my tenure because I was thinking about this for a while beforehand.
Matthew: Which products are selling the best right now?
Michael: In Neptune, for us, we have nutraceutical business, like Biodroga, as I explain. Obviously, vitamins are very valuable, omega-3s are very valuable, formulations happening on a level that's really good. Biodroga is doing very well. In the cannabis Canada, I would say that with cannabis 2.0 coming on this January, we're starting to see a lot of our innovations really apply to our customers like whether it be infused tea or 3D disposable products where you can actually make a tea look like a personalized tag or a Christmas tree or any object and then we can infuse it with vitamins or we can infuse it with cannabis or we can infuse it with hemp or combination,
Those things are starting to be -- the cannabis 2.0 products are really key for the cannabis market, because I think the issue when they were developing out the programs in Canada is that they were looking at people that are just going to buy it legally who are buying it illegally, but they weren't thinking about the innovations that are required and the price points.
Initially, people were charged, in Canada, you'd have to wait now in line and pay 57% more than you were getting it from the black market. That's not a sustainable business model. The industry had to self-correct to really focus in on saying, "How can we bring our cost down? How can we show innovation?" With cannabis 2.0, you can now show innovation and give consumers something that they can't get anywhere else.
Also, with the Canadian government opening up additional distribution points, it allowed the market to grow. I think that's something that, when you're in an evolving -- whether it be with .com technology, and the .com era, all those different segments at a time when you develop an app. I remember when I had to use a 56k modem, now I have a gigabit connection at my house. This has happened pretty quickly between -- I'm 34 now and I was 11 back then.
The innovation's happening on the technology world, but when everybody thought, "Oh, let's just make a web hosting company," that doesn't just work. Then it's like, "Let's just make an advertising company online." It was people that innovated and stayed ahead of the curve and made it more efficient. I think that's happening right now in real-time in a cannabis market in Canada.
I think that if Health Canada and the government legalized hemp to be put in personal care, home care, and beauty products, they're going to be able to compete and pull ahead of even the United States because I think that that is an area that people weren't even focusing on revenue opportunities, tax revenue opportunities, but that ingredient applies to almost every product a person touches from when they wake up to when they go to bed.
It actually improves the experience and the claims you can make as well as the effectiveness of these products and safer for the skin. There's a lot of great things that the hemp can do and cannabis can do in personal care, home care and beauty products, and it can also remove a lot of toxicity. I think there's an opportunity that Canada has that they can pull ahead and continue to innovate, be ahead of the market.
The US though in recent months have gotten themselves in expanding the debt. They even went to need a revenue tax revenue driver because you can't be spending trillions of dollars and not creating new revenue streams. I think more than ever, the government has to -- and it's Democrats and Republicans that support the legalization of cannabis and they're doing it on a lot on the state level. I think now that the federal government is tensely going up to 10 billion, a trillion dollars, they're going to have to add additional revenue streams.
Like a state like New York, it generate a billion dollars just on taxing marijuana. I think that it's something that the US has to look at and I think that we're well-positioned with our footprint in the US as we currently do hemp in that facility. We have 1.5 million capacity should ramp up if there was and really quickly if that was legally federalized.
I think that that's something that has real potential now to be much a quicker solution. I think there's a lot of opportunity in the cannabis industry and it's definitely something that's like a once-in-a-lifetime era where you can be at the beginning of something. Maybe you've got every company, whether it be like, we're focused on how we can make sure that we have a low-cost infrastructure, how do we invest in the innovation, a partner on innovation, so we don't spend a lot of CapEx but at the same time how do we create IP.
We have a royalty business that just on the IP that we generated and Omega-3s with maximum and we get royalty payments of customers just by licensing out our IP. How do we make sure that we grow our IP business or grow our nutriceutical and vitamin? At the same time, if Canada makes sure that we're the leading with innovation and cannabis and then in the States, make sure that we're leading with personal care, home care, and beauty product innovation to be able to service the CPG customer. Having the true GMP, having it run more like a pharmaceutical-grade facility, our very key is our business plan.
Matthew: One thing I've been thinking about with the consumer packaged goods is, hemp, is that considered a luxury ingredient still on your mind in terms of having to charge a higher price to an end-user? Is that only for upmarket still or do you feel like the price is stable enough for trending down that it can be cost-competitive with some brands that people find to be more affordable?
Michael: Well, it's like look at the beginning of the natural space right there with the sprouts. New sees it, Mother's Market, all these retailers opening a natural product for a premium product. Why my last company was so successful was because I don't believe we should gouge customers for premium ingredients. Every person should have the right to use natural products and be able to buy products that are made with natural ingredients.
I think that the people that are doing the luxury ones, there may be a unique innovation that comes out that it was a huge amount of money for the company to invest into and they need to charge a premium for it, but it should still be reasonable. Eventually, as the volume picks up for that product, it should go down to be something in the standard skew. It's like the focus that the brand should have and what we have is like you have your premium products and we spent a lot of money innovating and we need to bring the costs down and then you have your mainstream products.
I think hemp is like a super ingredient. Charcoal was a super ingredient for beauty and other categories in 2016 but hemp is something which is like the caffeine to the soda industry. This is like the caffeine to the whole personal care, the home care, the beauty. It touches so many different categories. There's never been an ingredient that actually can prove the efficacy and the performance of so many different products.
I think it is a premium ingredient that it's really a super ingredient, but it shouldn't always come with a premium price. That's the thing that we're going to be showing in Canada and in the US is that our lowest cost of infrastructure, we are going to be able to do extraction which can save customers off the 30% from what they're currently paying and have a better quality product. We invested our phase two in Canada, which is no one else had, is custom made. It's like a Ferrari of extraction.
What it really allows us to do is to be ready for that mass consumption of hemp or cannabis. It does multiple steps in one thing. A lot of the issues that we saw with farmers when we were listening to the farmers and we were listening to the different retailers and were building on models, we heard that they had a lot of problems where they would have to pay people to sit there and trim the product before they can send it to an extractor.
We wanted to develop an extractor that reduce that labor cost to that farmer, or to that LP so we can actually do it efficiently. Give us your trim, we'll do it. Phase two allows us to take multiple types of biomass and grades of biomass. It also does winterization and other proprietary things within one-step process and be energy-efficient, because one of the things that we wanted to look at is our ESG policies, and we'll be talking more about that this year.
We want it to be energy efficient. We want to be carbon neutral. We want to be gender diverse in management. We wanted to make sure that we live and breathe the missions that our brains and the products that we're developing are putting out there. It starts with the corporate structure all the way down to the brain structure and our customers.
We want to make sure that we can make efficiencies for our customers because we saw the need that Canada cannabis needs to be more efficient in pricing. Taking multiple variants could save a farmer 50 cents to a dollar a unit. In doing winterization, we can do a whole process in less than an hour, maybe two hours, depending on the specifications where competitors were taking 24 hours to turn a batch.
Phase two was really like a crucial moment. We're just starting to run the product, then we turned it on like a month ago and started at room temperature now, going with a new cooling agent to be able to freeze it now. We've also really looked at how we have -- We have a building that's amazing. If you're in Canada, you should definitely make sure you go and reach out and, obviously, there's that -- once the Coronavirus passes, but that facility is a pharmaceutical facility. No one has anything like it.
Phase two is just to start at the things that we can show that we've been developing and listening to and watching. There's a lot of people that are rushing to extract too in the very beginning, we were being, our knowledge and our lessons that we've learned was really to watch and see what the issues were. We listened to the farmers, we listened to the LPs, we listened to the retailers and the government.
We want to make sure that with phase two and onward we started addressing these unique things that can help lower the cost structure to our customers can improve so we can do higher volumes quicker and do more processes in one process so people touch the product less because we have a facility where we can pipe product. We have this four-level freezing room where we can store biomass and below certain temperatures and then we can wipe that product into the phase to extract it without people touching it. Those are the type of things that are like state-of-art.
Well, we're building for this industry to get ahead and to be able to service the big Unilevers, the CPGs, and PNGs, and L'Oreals, and whatever beauty products. We want to make sure that we can build that cost structure because I know that in personal care, every premium ingredient with a high cost ingredient limits the amount of distribution for a product. You don't want our brands that we service, our LPs, or our partners to be limited to play in only certain retailers. We know that for cannabis to work, we have to play in all of the different place for us.
It's got to be affordable and that people can pay for innovations and we have to build that industry out. It starts with extraction and it was a real big key. That's why we took a very unique approach and even some sizable investment to develop out these technologies.
Matthew: A lot of people have heard of Unilever and they know the brands that Unilever owns, but they don't think about Unilever owning them necessarily. I think of Dove soap and Ben and Jerry's and there's just tons of others everybody has heard of. Could you rattle off a few more just so we can remember?
Michael: Well, Ben and Jerry's, seventh-generation, Ali, Axe, and they even also have multiple -- they have brands that are limited to certain countries. They have so many, and honestly, to be quite honest, when I first heard of Unilever, my goal was to take my last company public and be that brand, and pick a brand that's -- Really, we were successful because we listened to the consumer. That is what made us successful.
We listened to what their issues were and we problem solved. I want to take that company public and we got offers from many different strategics. When I heard of Unilever first, I had to look into this because I didn't -- and honestly, my focus wasn't at all selling at that point, I didn't even watch it and it was a last-minute deal that ended up when I got to meet the global CEO and, the president of North America and truly see that they were going to enable me to do my ideas, and to get the products and be really supportive of them, and to build out the AIs and all the things that we're developing internally.
When I started, I realized, wow, these are brands. Don't forget they also have teas, like Tesco tea and all Lipton. There's so many.
Matthew: Tons of names will recognize.
Michael: If they're in food, they're in teas. They're in personal care, and home care products. I think that and I was cool -- happy that I was able to bring toothpaste back to the North American territory. Schmidt's launched its toothpaste and that's the first toothpaste that Unilever brought back into North American territory and we're doing really good with it.
That's a company at hundreds of years of history. The first thing that I went as a geek, is I went to the legal room and I wanted to learn everything about how the corporate structure was because everything starts with the structure. Their chief counsel was really nice to me. I was very fortunate to have all the C levels and even the company supportive of everything and my learning experiences and letting me push and rock both. I learned, during World War II, because that Andes, they actually split up and then went back together.
They had Unilever one side and other one, Unilever, the other side, they actually split up each company, down to the territory to the country. They have more like country clusters. It's a very complicated structure, but it allows them to be able to play in all different political environments. I learned so much from that experience. It was my PhD, that if I was going to go college, I don't think I would have gotten that same experience that I got at Unilever. Because they have so much history and they've been through so many things.
That's also why I like Neptune, because Neptune has had its spirit challenges, and it's been in different areas. It has a team that's very strong. When people look at -- when I invest in a company, I want to make sure that the people I invested to have been not just winning every time. I want to know that they've won when they've had challenges, because those are the people that continue to problem solve and then the companies that survive is not when everything is great.
It's got to be when everything is wrong, how do they prevail. Seeing that Neptune has that history of being able to fight struggles and build, it remind me a lot of Unilever, when it went from a soap company to one of the biggest companies in the world, and then how they built the structures over time. That's something that's really that we need to really take value on because not every company has. Those companies that do and the management's never been through turmoil, and they don't know and they're not as agile and they don't have multiple business units that can scale up and down with the ban.
I think that that's something that we have a lot of flexibility. I think even with our hand sanitizers that we were developing for next year, plant-based hand sanitizers, we're able to fast track that and bring it to market in a big way pretty quickly. I think that a lot of people are like wow, like a million-plus units and ramping up. I think that that's something that shows the capabilities of Neptune to be able to scale up with a ban and scale down with the ban and diversify and also innovate in categories that need innovation.
Matthew: You've launched a plant-based hand sanitizer. Is it just for COVID-19, or prior to that?
Michael: While we were developing it prior to COVID-19, we were working actually is that one of the products that we're doing with Dr. Jane Goodall, we were doing essential oils and we were doing hand sanitizers and we were also going to be doing her hemp line. We were investigating categories, when I went to deodorant, it was a category that didn't have any innovation. These same brands were there for decades and people have switched brands and naturally, we work.
When it comes to hand sanitizers, we were looking, okay. People want it, they're using hand sanitizers, but how do we make them so it's better for the skin. How do we make them so it's point efficient? That's where the antifungal and antibacterial properties cannabis come into play. We were already developing it. We did fast track but we have three versions that are hitting the market. We have our standard gel formulas and start thinking about essential oils.
Then we're going to be debuting shortly the cannabis hemp versions and CBD versions that we've developed. Obviously, there's a little bit more restrictions based on states and stuff along those lines. These are things that we're innovating. It wasn't something that we just wanted to do overnight for the purpose of COVID. It was something that we were developing this but it could help this time period right now.
Because one of the biggest things that consumers are saying, they can't go to the store and buy sanitizers. Everybody's been rushing for the government side and they've been checking up and as people have been hoarding products. We want to make sure that we build the capacity up and be able to service both the government and the first responders, but that's little, get product back into retail channel for consumers at affordable pricing.
Matthew: Okay. Now, what do you think the hemp industry will look in the next three to five years for household goods? How will that change and morph, and specifically do you think it'll be more direct to consumer post-COVID-19? Or will it be a hybrid model where retail still, retail environment targets, and Walmart are still strong? Will that breakdown by age of customer? What are your thoughts there?
Michael: That's a couple of question. I'll say that in Target, Walmart, I think that they are going to be -- I think it's really important that they develop their version of prime. They now have seen, okay, Amazon, be very successful with a two-day deliveries and that's so. I expect that some of those companies will develop their own same-day, delivery services more efficiently.
I think that consumers will still buy online, I think if they can get a product, within two days and eventually, within the same day. Those are the expectations that the consumers are having with online deliveries. It's almost a carrier service. I think that the retailers are going to adapt to be able to have the retail presence to be more of a point of distribution, but they need to be able to get products to the consumers faster.
I think that when it comes to the hemp brand, I think consumption will be probably 20% to 30% of the cannabis brand revenues potentially. I think that the majority of our income from personal current healthcare and beauty products, when they're allowed to put in, because those are the units that people consume multiple times a day as far as uses. There's only so much you can smoke in a day. There's only so much you can drink in a day but you're going to be washing your hands, you're going to be using your deodorant.
You're going to be using your toothpaste at least once a day. You're going to be using your vitamins. I think that the consumer is going to wake up to a new, we need to make sure we're healthier. Just like I did in my life. I want to make sure I was eating healthier. I was building products that made a difference for society. I think now more than ever is when you look at a company, you're going to want to know how ready are they for a bio pandemic.
Because this time, it could have been a bio pandemic but next time it could have been biowarfare. You need to make sure the retail, it just when the airlines happened in 911. They had to show security and they had to restore the confidence with consumers before they start flying again. You have that same thing unraveling right now, but they're going to have to show it in a restaurant. I want to know that the temperatures are being checked of employees and I guess, before I sit down in the restaurant.
I want to make sure if I'm getting on the plane that day and also look at biosecurity, not just security for people that could be on harm on a plane, I think you have to look at from a bio readiness. We shouldn't be allowing people to fly sick. If you're sick, stay home. Employees shouldn't be forced to go to work if they're sick. Those are the things that are going to change in the post-COVID society. Because think about it, how many more lives can we save, if every international flight there was a quick bio check just like they do for nuclear and a lot of other things, why wouldn't they check to make sure if somebody doesn't have a fever if it gets on a plane, or that is a rapid check for the known pathogen, just things that can potentially cause issues.
They need to do some type of health screening on international flights at the very least. Then domestically test to make our travel system much safer just like they did back when it came to 911 for security. Now, they need to do biosecurity. Every restaurant needs to do the same thing. Uber needs to do the same thing. All these trend, it has to be part of your business plan, just like we check temperatures before people even come into the --before they leave to go to the office, when they go into -- before they enter the office and when they leave.
If people have a temperature, they are not allowed on the facilities. Then we go back and make sure it's cleaned everywhere they were. You have to put these systems in place. Then now I'm working on getting more and more testing because we'll probably be testing employees more frequently and quicker. I think that eventually, you'll start seeing the Walmarts of the world, you'll see when you go to Costco or you go to Sam's Club, you check your ID, they make sure you're a member and somebody holds that. I think that they're going to have to switch to AI to allow them to have facial recognition, temperature check, check the person in, check the person out.
Those are the type of things that are going to start popping up in retail because right now is one part of the problem is getting us back to work. The other part of the problem is building the confidence with the consumer again, that is safe.
Matthew: Yes. Some of those technologies are already there. I went to an international flight tonight to stand in this clear gate area that just for one person, and it did look at my face and just let me in without a boarding pass and it did that for everybody on the flight. I thought wow, this is great, but also a little bit creepy. Because even if you trust the company that does it, they have your face in a database somewhere and that database can be hacked.
What assurances are there that that doesn't get out there is used for a deep fake or something like that. I guess a blockchain solution might help with that in some regard so that there's not a way that it would be forged. A confluence of a bunch of technologies coming together to solve these problems. I know in China, they have drones that can check your temperature, small drones that hover and they check your forehead temperature from a distance.
Michael: Well, I think that, if anything, what I'm more worried about now is that every country and every bad actor now knows how simple if they can hijack your bio pathogen, that they can create a pandemic. We have to put in these procedures now and then we have to make it safe and we have to protect privacy. At the same time, we have a bigger obligation, we have to protect humanity.
This was just as dangerous as a nuclear weapon if not more dangerous. We don't spend enough money on bio readiness. Because could you imagine if the intention for this virus and that a country sat there and had a vaccine that they worked on for 12 months, and then they released it, and then the only ones were the vaccine, these are things that have to be thought out now.
Because imagine if the tensions were back, or imagine if a terrorist group had a bad intention. They now know that they can do more harm with a pathogen than anything else, than a nuclear bomb, than a dirty bomb or any of those things. The governments around the world and the businesses around the world and the people that are responsible for travel have to add this into the safety. Imagine if this had a 10% kill rate, that would be horrible.
Matthew: Yes, like the Spanish flu or something, or the bubonic plague, I think was 30. That was in the 14th century that was like 30%. Michael, I want to switch to some personal development questions here. Is there a book that's had a big impact on your life or your way of thinking that you'd like to share?
Matthew: Yes. Being highly dyslexic, and not the best academic, books were never my favorite things in the world. I started on a journey of trying to find business books when I was younger that could show me how people actually became successful, but I like to find was business books that would tell me advice. I looked at like, even I looked at Warren Buffett's books and stuff that he's talked about, were influential in his life, and different entrepreneurs or innovators.
What I really couldn't find out was how people became successful, what is the story and how they got there, and then let me listen to their advice. It's actually been the book thing is something that's been an ongoing project that got to the point where it's like, people started asking me how did I become successful? That's when I was like, okay, I want to work with -- I actually started writing a book a couple of years ago.
Basically, working with a team of writers because I wanted people to see this is how I would -- if I could go write myself a book of how to -- If I could write a book to myself when I was 11 years old, how would I show them the path? For me, I learned by watching people, I learned by trial and error, I learned by being agile, I learned by researching and listening to consumers but real data coming in real-time.
How can I inspire myself going back all those years to be even more efficient, even faster to being successful and making a difference? I actually started on and really, that's what started me to do my own book. I had basically over 100 people in my life interviewed about me and the different stories and what they learned from me, and a great team of writers that work with me on this and a great publisher actually, I'm going to be releasing a book for the first time in this year or early next year.
The real inspiration that I get before is focusing on who changed. One of the best things was, they had to -- like the man who made America on the History Channel, watching, the different innovators of the time, whether it be Standard Oil and all these things, how they went through issues, how they adapted, how they took on competition, how the counter attacks and all these different things.
That was the things that I learned the most from is watching people that forges history, because it's very nice when you -- there's a lot of people that can become successful, but there's very few people that can maintain success and continue being successful multiple time. Very few are serial entrepreneurs. Back in early days in America, you could be a serial entrepreneur in one company because you didn't have all the technology you have today where it speeds up the process.
It also speeds up competition. I think that it wasn't one book, I think it was focusing on really listening to a lot of and learning about and researching about all these different innovators of the people who built America started with a series on the History Channel, but also digging in and actually talking to people.
Believe me, I tried off so many different books. I bought, how to look in and get advice, but these always people tell me advice, but I need to learn from how their actions were, I want to know what did they face as an issue? How did they overcome it? How did they structure things? Those are the things that you don't really get in a lot of books. That's my focus is if I can give that back so I can basically have made a book for myself. If I came back, look at this knowledge that I've learned, here's the structure, and now my brain is dyslexic to be able to magnify that.
Matthew: Well, that's really interesting. Do you have a name for the book yet?
Michael: It's not been released yet the name but it will be shortly.
Matthew: Okay. Here's a Peter Thiel question for you. What is one thought you have that most people would disagree with you on? It can be about anything.
Michael: I'm actually worried when people agree with me because then I'm like, I'm thinking I'm missing something. When everybody agrees with me, those are the things that scare me. I love that in our culture at my company and all the companies that I associate with, is that the ability to challenge ideas and to challenge thoughts. When everybody agrees, that's a problem, because we missed something.
I think that the biggest challenge that I had in the cannabis industry was really talking about personal care and home care and beauty products. They all thought I was crazy. They're like, how does cannabis play in a beauty product? How does cannabis play in a hair care product and how is like --They don't get the size or the scope.
Their focus right now is, putting in a product and devices, making a soda healthier, turning it to a cigarette, getting somebody for a calm and experiences. Then there's some great medical ones that cost a lot of money. No one was focusing and no one really believed in how cannabis can play a role in the plant-based revolution, just like beyond meat has changed in a way. It's like meat is going to be consumed as we advance and look that you can actually have a plant-based burger that tastes like a burger, which is scary.
When you look at the household, this same thing is happening inside every product in the household. Their big strategics know that they need to advance their formulas to be safer and plant-based and have a positive impact on humanity. The only way to get there, to get organic growth back in the consumer packaged industry is to use hemp CBD and different cannabinoids from cannabis to be able to enhance all these formulas to get rid of these highly toxic issues that are in every day.
The hidden pillars that are people using every day. There is a crisis in the household and these are plant-based solution and it needs to happen sooner than later because history will look back at these companies and say why the hell did he put this product in these products? This is a truly a solution that need to be happening. Even when you look at even the paper industry, there were people back in the earlier on, in trying to make hemp paper and hemp toilet paper and hemp, all these things but it got shut down.
Some of these rules that we have to fight today were barely so that the paper companies could process paper. They didn't want hemp because it can be cheaper. They didn't want these products in the market. We have to go back and unwind a lot of these pointless rules that are in the system now based on a time where they're trying to protect an industry. We need to bring innovation into this industry. Whether it be the industrial side of hemp and then the uses there, the personal care, home care, beauty products that can make products safer for consumers are making the vices safer, the drinks, the sodas, the calorie-free beers.
We need to get these innovations out there. We need to do it sooner than later. The government need to generate more tax revenue more than ever. We are going to have to pay for a pandemic that is going to set back generations and could potentially cost stagnation and inflation to hit the markets and future generations.
Matthew: Yes, it's going to be interesting how they undo that knot that was created here. It looks like perhaps going with negative interest rates and printing money and going with negative interest rates might be the direction taken, because we're pretty far down this path of going off the gold standard of the '70s. Now, having this money creation in debt. It's going to be interesting to see how this gets resolved. Do you have any thoughts on how our government figures this out, and it's really not just a US phenomenon, but also worldwide?
Michael: Well, they're going to have -- We're taking out a lot of debt right now that could affect many generations. There's a couple of problems too and how that we're starting to see is that people are finding out that them being furloughed and unemployed can actually make them more money than them working. That is a very big problem. Because it's going to setback industries from coming back online a lot longer as long as the employees incentivize more to not be an employee then and get paid more than actually working.
Along with that goes on, the less likely they're going to want to go back to work. The debt obviously has a lot of consequences and it ultimately is going to lead to the dollar weakness. The dollar weakness is going to turn into higher costs. Now, when the 50% of Americans only have 800 bucks in their bank account, and now they're going to have to pay more money for the products that they buy on a daily basis, and because of inflation is going to be a huge issue.
Not to mention, the yield are so low right now and the Fed is pumping so much money that needs to go to someplace in which is factually making the treasury yield zero. Eventually, it means that that's flowing in equities. There's a lot of problems that are started by some of the solutions that we're doing that need to be addressed with new income streams, new revenue streams, because you do not want to have a weaker dollar with stagflation and that combination is not good for any society, or any people or any government.
It is really important that we take this opportunity to look at how states can generate additional revenue and federal government can generate additional revenue. That is fundamentally why I believe cannabis is a very unique situation that the government could generate billions upon billions upon billions of dollars in revenues at a time where it needs revenue more than ever, so that way we can keep that dollar strong and push away stagflation.
Matthew: Great points, great points. Even just making I think the whole government structure paperless would help a lot where you're managing things on apps instead of faxing. There's still a lot of government entities that require you to fax and paperwork and all these archaic business processes could really be made more efficient. But I don't know if we're going to solve these problems here today, Michael, but you definitely have some interesting ideas about it. For listeners that want to learn more about Neptune Wellness and also check out your stock ticker, how can they do that?
Michael: Well, they can go to neptunecorp.com or they can check out our stock ticker on NASDAQ at NEPT or on the TSX. If they want to follow us on Twitter, Neptune Corp or my Twitter and Mike Cammarata. Believe me, I have problems spelling my last name when I was a kid, I don't expect most people to do it. If you go into the website, you can find my last name, you can find me on Twitter, and Instagram. But I think that we're doing our best to have a positive impact on the planet and people and look for ways to encourage growth in multiple countries in Canada, and the US.
Matthew: Well, great. Well, thanks so much for coming on the show and educating us, Michael. We really appreciate it. Thanks so much for talking about your experience with dyslexia. I think there's a lot of people out there that are saying, well, I know a little bit more about it now and what it means. I want to hear more about your book when that comes out. Keep us posted.
Michael: Definitely. Thank you for having me.
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