In this episode of Cannabis Insider, host Pat Alittle interviews Brett Worley, the CEO of MC Nutraceuticals, a leading supplier of hemp-derived cannabinoids. The conversation covers various topics, including recent news in the cannabis industry, MC Nutraceuticals' journey and vision, the significance of minor cannabinoids, safety and quality assurance in cannabinoid products, white labeling and custom product development, regulatory challenges and changes, planning and forecasting, and innovative cannabinoid products. Worley emphasizes the importance of education, science, and regulation in the evolving cannabis market.
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00:00 Hello, Brett. Welcome to Cannabis Insiders. Thank you. Thank you so much for joining us
00:10 today. How are you?
00:11 I'm good, Pato. Thanks for having me.
00:14 All right. Again, very happy to have you on this episode. I'm very excited about the answers
00:20 to the questions I'm going to make you because the cannabinoids market is something that
00:25 actually I've been following for quite some time at Benzinga. So let's jump right into
00:31 the first question. MCN Nutraceuticals is known as the largest global supplier of cannabinoids.
00:38 Could you tell us about the journey of MCN Nutraceuticals and the mission and its vision
00:45 in the cannabis industry?
00:46 Sure. I've been in this space for four years. MCN is a little over three and a half years
00:51 old. I built the company with a couple of key things in mind. One was innovation science
00:58 behind the cannabis plant in the hemp market specifically due to the farm bills, guidance
01:04 on regulations. It leaves us a lot more room for flexibility. And the second thing was
01:11 distribution and sales. So we're the leader in the hemp-derived cannabinoid market in
01:17 the cannabis industry at whole. We actually have about 750 clients now in 29 countries.
01:23 So we're also worldwide. We have a company based out of the Czech Republic where we do
01:27 a lot of distribution for the rest of Europe. And then we also service as the Southeast
01:33 Asia countries come online, such as Japan and Thailand, we service those markets too.
01:38 So we're an early adopter to new markets, early adopter to the science and the new cannabinoids.
01:43 We sell 46 cannabinoids currently and those people are hemp clients, cannabis clients
01:49 or somewhere in between.
01:50 Yeah, I actually got that outdated number of brands. So yeah, so it's over 650 now.
01:58 That's a lot. And in that regard, I mean, those brands from my understanding are across
02:05 US, Europe and Asia. So what are the key factors that have contributed to the company's success
02:11 on a global scale?
02:12 A lot of our, I mean, it's simple. One, obviously pure cannabinoids. So we have a full in-house
02:18 testing facility. Obviously we do third-party testing too, but the speed of having a full
02:23 testing facility in-house allows us to run R&D quicker and also make sure that our batches
02:29 are up to spec for our clients. And then the second thing again is sales. A lot of our
02:33 competitors don't have a sales team. I have 22 sales people in-house in my building and
02:41 that's really kind of what separates us from everybody else is we really invested in the
02:45 sales channel, in the distribution, all of our orders that get placed before 2 PM Mountain
02:51 Time ship same day overnight.
02:52 So what I call us is we're the Amazon of cannabinoids and that level of service and that level of
02:58 sophistication if you will, far exceeds our competition. Our closest competitor probably
03:04 has 50 clients and we have over 700. So it's a large difference. And then in the international
03:09 channels having that ability to distribute directly from Europe, take Euros or Czech
03:14 crowns or whatever it is, has also been a game changer for our European presence.
03:21 And I'm going to ask you about the third-party testing, but before we jump into that, can
03:27 you provide insights into the significance of the minor cannabinoids in the cannabis
03:31 industry and their potential impact on the market?
03:36 Sure. Yeah, the minor cannabinoids go back into my history a little bit. When I first
03:42 tried CBN and we didn't make it, I tried CBN and it worked. It put me to sleep. I probably
03:47 took about 50 milligrams of CBN and it knocked me out. So that was when I started to understand
03:51 the beneficial therapeutic benefits potentially of these cannabinoids, CBC, CBN, CBGA, CBDA,
04:00 etc. And that really showed me what happens when you start to mix and blend these things.
04:06 Another thing that we have really pride ourselves on being one of the best formulators in this
04:11 space. So whether it's Delta 8 plus CBN or HHC plus CBN, or if a company like Juana wants
04:17 to put CBN in their gummies, these things really tailor to the effects of the consumer
04:21 and it gives the consumer higher quality products.
04:24 In the cannabis industry or the legacy cannabis marijuana market, it was always Delta 9 distillate
04:30 in a gummy and that's it. When the hemp industry came along, we were allowed to provide these
04:34 other complimentary cannabinoids in order to bolster the product offering, which has
04:40 done quite well. I think the Delta 9 plus CBN gummy in California is the top selling
04:45 gummy in the market. So these blends are just going to become more and more relevant in
04:51 the hemp market and in the legacy marijuana market. And we'll continue to see them as
04:56 companies like us continue to develop them.
05:01 Now going back to the question I wanted to make you, how do you ensure in your company
05:07 the safety and quality of its cannabinoid products and what role does the third party
05:12 testing play in this process?
05:15 For us, we've invested a lot in the chemistry. I have two PhDs on staff, three chemists,
05:20 masters and bachelors on staff. So you start there obviously. These products aren't necessarily
05:25 very hard to make. They're very common in normal food and nutraceutical development
05:30 and even in pharmaceutical development. So the processes to make a Delta 8 or a CBN are
05:34 fairly well known. And then thirdly to your third party answer is because they're so easy
05:41 to make as long as you know what you're doing and you're a PhD chemist in most cases, it's
05:46 really easy to make sure that everything's third party testing.
05:48 So the third party part is the easy part, making sure that your pesticides, microbials,
05:54 mycotoxins, et cetera are done properly. We never see those types of products in our cannabinoids,
06:01 for example. It's very easy to remove those things. So the basis is what really matters,
06:07 making sure you have the proper equipment, C1, D1s, the right distillation technologies,
06:13 et cetera, make the third party analysis very easy.
06:17 And then the second part is the compliance, making sure that the Delta 9 THC is less than
06:21 2.3%, which is we do a lot of that just in-house because we have to. So we have three HPLCs
06:26 and a GCMS. We're probably adding another one of each very soon just due to our growth.
06:32 And again, my team makes it all happen for me so I can have these interviews.
06:39 And with such a great offering of different cannabinoids for the bulk wholesale, how do
06:45 you see the market evolving in terms of consumer preference elements?
06:50 I think we have a long way to go on the education side. Obviously, CVN took some time, two or
06:56 three years to catch on. We have a product that's 50 milligrams of CVC and everyone that
07:01 has some sort of ailment, if you will, pain, loves it. And that's without THC. So there's
07:07 so much education to be done. That's partially why I like doing these type of interviews
07:11 is because I get to educate and show you my point from my point of view.
07:16 And to be fair, a lot of hemp companies are doing this, but it's still slower than I would
07:21 like. The tetracannabavarian, the THCV is my favorite molecule and we don't sell enough
07:28 of it. Let me tell you that. So there's still some time and people need to understand the
07:34 chemistry and the cannabinoids and then the effects of them, which will just come with
07:39 time, especially if everything's rescheduled or descheduled, you'll start to see some more
07:43 science funding. And we plan on funding a lot more science this year also, just given
07:48 that we have the ability to. So we plan on starting quite a few studies with the University
07:52 of Mississippi and Dr. El-Sully, who runs the marijuana program down there.
07:57 Okay. Yeah. I'm going to, yes, we're going to dive into these regulatory frameworks now
08:05 just in a bit. But before that, I have a question about white labeling and in custom product
08:10 development, because from my understanding, those are services offered by MC NutraCytical.
08:16 So how do these services benefit your clients and partners in the industry?
08:21 Yeah. So we can handle everything from the raw material all the way down to a vape cartridge
08:26 or a gummy or a tincture, whatever it is. So again, at the beginning of the company
08:32 really was supposed to be a one-stop shop that you could trust, a brand that you can
08:37 trust with your products essentially. So we decided to continue down the value chain and
08:42 we continue to invest more money into vape, pre-rolls, gummies, et cetera. Those are kind
08:47 of the top SKUs. So we continue to offer our services to our clients downstream. One, obviously
08:53 as for revenue and then two, as a trust component. So we believe that we're the best in the business
09:00 and we want to keep as much as the product manufacturing in-house, given our product
09:05 knowledge and compliance behind the products themselves.
09:11 Very clear. Very clear. And just a minute ago, you mentioned the farm bill. Could you
09:18 elaborate on the regulatory challenges and changes that you have encountered during your
09:23 journey?
09:24 Sure. So I'm also on the board of American Healthy Alternatives Association. It's the
09:29 largest hemp association and maybe cannabis that might be up for debate in the country.
09:35 So I deal with a lot of regulatory affairs. I wear two hats is what I typically tell people.
09:40 So I have my regulatory hat and then I also have my operational hat and my sales hat,
09:45 I guess, three. So I do all three things for the company and regulatory has been a challenge
09:52 for the most part. We're based in Colorado. We had a large infight, if you will, marijuana
09:56 versus hemp. We were able to stay in manufacture here, but it had to be shipped to a legal
10:02 state. So even in the state that I operate into, I can't sell or my clients can't sell
10:06 into the retail channel if it's over 1.25 milligrams of THC.
10:12 So we see these types of things across the country. I do my best to stand up and fight
10:18 for the small hemp businesses across the country. And we see success, honestly. So I was a part
10:26 of the Tennessee, Kentucky, Alabama, Florida, and Colorado legislation last session. And
10:33 West Virginia also regulated the sale of Delta 8 to just 21 plus. So I think we're going
10:38 to see a lot more of that this year. I think a lot of the infighting has stopped, if you
10:42 will. Hopefully that is due to some of the efforts of me and my association. But I think
10:49 a lot of people are starting to see like, CBN is made from Delta ATC, for example, for
10:53 the most part. Delta 8 is bad, then to buy design CBN is kind of bad. So there's a lot
10:59 of just misinformation. And when we come into and educate politicians, they seem to be very
11:04 receptive of what we've done, our professionalism, and the revenue for the state.
11:10 I mean, Florida is the biggest cannabis state in the country, and that's just hemp. So it's
11:16 $6.9 billion at hemp retail sales. California was 5.9 last year. So hemp is very large.
11:22 As Bo Whitney has famously stated that it's a 22 to a $35 billion market, I think. So
11:29 28 billion, that would make it larger than cannabis. And that's not even talking about
11:34 the net cashflow. There's significantly more net cashflow in the industry than in cannabis.
11:42 And we're also dispelling the black market, which is also another thing that I love to
11:47 be able to say we're doing. Because you can go get Delta 8 at Dow Street, a smoke shop,
11:52 or a gas station, people are less likely to engage in black market activities, which is
11:56 very nice. So I think overall, hemp is very much a net positive. There's so many different
12:01 cannabinoids that we can drive from the hemp plant that are beneficial to the consumers.
12:05 And the consumers want it, clearly. $28 billion being exchanged for mainly Delta 8 and cannabinoids
12:10 alike. There's clearly consumer demand.
12:13 Exactly. Yes, totally. And also, I just wanted to say that, yes, without a doubt, the efforts
12:21 from people like yourself are more than definitely moving the discussion forward across the country.
12:28 So those are very valuable efforts. And another question more around your background, which
12:35 I think it includes expertise in planning, budgeting, and forecasting. How do you apply
12:42 these skills to stay ahead of price compression, for example, and regulatory changes in the
12:47 industry?
12:48 Yeah, I think in this space, agility is the most important thing. You can budget, you
12:53 can plan, you can do all your forecasts. Obviously, if you're in, I just got done with all those
12:59 things. But the number one thing in my company is agility. And then the company culture itself.
13:05 I want to make sure that my people want to be here, stay here, and grow with the company.
13:09 And that's something that we've started since employee number one, essentially. We're now,
13:14 I think we just hired eight people in the last week. So we're at about 60 employees
13:19 now. And there's nothing more important than my staff that it gives me, again, the ability
13:24 to educate and do the regulatory stuff. So I don't have to worry about if I am traveling
13:29 and I'm at home.
13:30 So as far as my expertise from previous businesses, the thing that I learned the most or used
13:39 the most was just being agile and making sure we have a good company culture. And so far,
13:44 that has been the two reasons why we've succeeded along with sales, of course. But those three
13:51 things together made a good company, really.
13:54 Yeah, exactly. Agility and certainty are actually those two words that go together without a
14:01 doubt. So yeah, that's definitely the way to go. And finally, could you share some examples
14:07 of, I don't know, maybe the most innovative cannabinoid products that MC Nutraceuticals
14:12 have developed to enhance consumer health and wellness?
14:15 Yeah, I think, again, I mean, THC, there's my favorite. And then there's, you know, maybe
14:20 more tailored to your, I mean, THC is my favorite. It's very much like caffeine, but without
14:26 any type of jitters. I don't consume a lot of caffeine, but I do consume some. So tetra
14:31 cannabinoid is my favorite. I am famously not a consumer anymore of THC products. I
14:39 used to be when I was younger, but so I like the products that are non-psychoactive. And
14:42 then another product that we make is again, the CBN products. We make a 50 milligram CBN
14:47 soft gel. And if I can't sleep, I'm taking two of those and it works. The third one is
14:53 it can be cannabichromine, which is CBC. It has a nice form factor. It's a low viscosity.
14:59 So it's really good. It complements carts very well. As sometimes carts have clogging
15:03 issues. So CBC is kind of the new kid on the block and that's really kind of your pain
15:07 relief type of a cannabinoid. As far as new cannabinoids, THCP is an extended release
15:14 cannabinoid. That's what I call it. It binds your receptor longer. So people that have
15:18 issues with either having to redose often or just need something that's a little bit
15:22 longer lasting, THCP is a pretty good alternative. And, you know, CBG, CBGA and CBDA all need
15:30 honorable mentions too. So those are all cannabinoids that people have really tailored to. We have
15:35 a small directed consumer website where people are able to buy these cannabinoids by the
15:40 gram, which people have really latched on to making their own blends at home. So we've
15:45 gotten a lot of consumer data back from them on, you know, I made this blend or that blend
15:50 and it helped me with this, that and the other.
15:53 What is that website? Can you share it with us?
15:55 It's yeah, it's Vivimu. V-I-V-I-M-U.com.
15:58 Perfect. That's very good data. And is there, I don't know, is there any future endeavors,
16:06 any plans you want to share with us? Any question you would like me to make you and I didn't?
16:11 Yeah. I mean, you know, we continue, we're going to continue to move forward the science
16:18 and the evolution of cannabis. That's my goal, whether it's regulatory or science-based.
16:23 I truly believe, and I say this quite often is as hemp has evolved the cannabis science
16:28 by at least two decades now, sometimes I say three because of where cannabis was before
16:33 hemp was legalized in the 2018 farm bill. So, you know, through regulation, through
16:38 education, we are being forced to be, you know, forced to do these things. So we get
16:43 to educate the politicians on a state by state basis under the flag that it's federally legal,
16:47 which is extremely helpful. You know, those conversations are a lot harder to have whenever
16:52 you're scheduled on narcotic. Politicians are less likely to probably talk to you. So
16:57 that's been immensely helpful and I can't, you know, thank the farm bill enough for having
17:02 that opportunity to educate these people. But I think overall it's a good thing as we
17:06 head to rescheduling, as we head to, you know, the hemp and the cannabis industry working
17:11 closer together as the cannabis industry or the marijuana industry is understanding that
17:16 these things are very beneficial to them. We have more marijuana companies buying our
17:20 products than ever. Stizzy Cookies and some others have already gotten into the space
17:24 and just fully embraced it. So I think, you know, beyond that, we're going to continue
17:30 our mission, which is to keep these things, you know, regulated to a certain degree, but
17:34 not over-regulated and making sure that the science continues to evolve and the education
17:37 is there.
17:38 Very clear. Thank you very much. And thank you again, very much, Brad, for joining us
17:45 for this episode. It's been great to hear about your insights and about what we can
17:50 expect soon from this market. Hope you had a good time too.
17:54 Yes, I did. Thank you for the time and I appreciate being on the podcast.
18:00 So of course, and hope you can come back anytime soon and I hope you have a great day.