Isodiol International Inc (CNSX:ISOL) (OTCMKTS:ISOLD) (FRA:LB6B) Director Aman Parmar joins James West to discuss the manufacturing and distribution of therapeutic CBD products. Parmar talks about the two main pillars of Isodiolâ€™s business model: pharmaceutical development, through the recently acquired BSPG Laboratories, and the manufacturing and distribution of CBD products. The pair discuss Isodiolâ€™s anti-inflammatory products and the health benefits of CBD. Currently, the distribution of CBD products varies by region and country; Parmar expects the Farm Billâ€™s expected approval to increase distribution in the United States.
James West:Â Â Welcome back. My guest this segment is Aman Parmar; he is a director of Isodiol International Inc., trading on the CSE under the symbol ISOL. Aman, welcome to the show.
Aman Parmar:Â Great to be here.
James West:Â Â Aman, tell me about the progress that Isodiol has made since I last spoke to Troy Neiman here about, I guess it was probably two or three months ago?
Aman Parmar:Â Okay, yeah, I think the early Spring we spoke to him.
James West:Â Â Yeah, and so, as all cannabis companies have sort of been engulfed in this summer Muskoka sideways drift, as has Isodiol, but whatâ€™s happened with the company in terms of corporate developments and value catalysts?
Aman Parmar:Â Absolutely. So weâ€™ve closed the big acquisition out of the UK, that was back in April of 2018, and that was for BSPG Laboratories, which holds and has been approved an active pharmaceutical ingredient accreditation from the MHRA, which is equivalent to their FDA, essentially, has given them this approval. And that is on their CBD isolate. So that product now is approved for pharmaceutical use. We are now rolling out partnerships and working with various LPs in Canada and pharmaceutical companies globally around clinical products and developments and trials.
So that division is underneath our subsidiary called Isolabs; weâ€™ll kind of have more news and sort of updates as we head into the Fall. But that was a major catalyst for us; it was an acquisition that cost us around $15 million USD total in stock and cash. So as we move forward, that will be a valuable asset that we develop. But beyond that, our Q1 numbers will be coming out in the next 10-14 days here, end of August, and weâ€™ve seen good progress and growth in the companyâ€™s revenues, and more importantly, the bottom line.
One of the main, I guess, you look at our financial numbers from the year-end was a high number of fees and findersâ€™ fees, advisory fees, that we paid out on all of our acquisitions from the last fiscal year. All of that has now obviously come into play, and weâ€™re now building those different divisions and seeing good sort of profitability come up from those various acquisitions.
James West:Â Â Wow, thatâ€™s great. And so, again, what is the main business of Isodiol?
Aman Parmar:Â Itâ€™s more into the manufacturing and distribution of high quality CBD products. So if you look at Isodiol, thereâ€™s two main pillars: thereâ€™s this drug development, this pharmaceutical division that we acquired through the acquisition of BSPG, that weâ€™ll develop as we head into the next 6, 8, 12, 18 months; and the core business of Isodiol is the manufacturing and distribution of CBD. We have over 100 skus in our portfolio, distribution all through the US. Weâ€™ve recently expanded through Latin America and parts of Europe, which weâ€™ll provide updates as we head into the Fall.
James West:Â Â Wow. So CBD is generally legal everywhere, or â€“ ?
Aman Parmar:Â You know, it is still in the gray market.
James West:Â Â Oh, it is?
Aman Parmar:Â In the UK, the rules are a bit different than the US and Canada, where you can actually label CBD on the packaging; itâ€™s a bit more lenient as far as what you can do on a marketing side. But weâ€™re seeing a lot of progress in the US on the hemp in the Farm Bill, which weâ€™re expecting updates on in early September, mid-September-ish. And then obviously, Canada has their own set of rules which are going to be coming into play as things move towards recreational. But itâ€™s still relatively in that sort of in-between market at this point.
James West:Â Â Yeah. Youâ€™re signing deals with all kinds of different companies, so I guess that companies are finding that licensing a component of the manufacturing component for their products is better than growing it themselves? Is that what this is?
Aman Parmar:Â You know, I think weâ€™re starting to see a lot of the LPs or players in the space not want to be farmers. I think we have the farmers in place; we have genetics, we have certain strains that we want to grow for the quality of CBD that we want to manufacture, and we have the farmers growing it, and we have those agreements in place. So for us, we donâ€™t want to be in cultivation; we have great, I guess, relationships globally with farmers, and weâ€™re able to source our product from various, you know, groups globally. And weâ€™re using that to produce our CBD.
James West:Â Â Okay, so where do you get most of your CBD?
Aman Parmar:Â So we have sources in the US, we have sources into the UK and Europe, and also China as well. We signed a deal with the Kawacatoose First Nations out of Saskatchewan earlier this year, so as we develop our Canadian market, weâ€™ll definitely be able to utilize that relationship as well.
James West:Â Â And so is it generally true that the CBD generally comes from the hemp plant, that does not contain much THC?
Aman Parmar:Â So we do say that our product is THC-free, and as we test through the various protocols, that is a true statement. So we say our product is THC-free.
James West:Â Â And itâ€™s interesting, but Iâ€™m reading a book right now that is all about the therapeutic benefits of CBD, and this substance apparently has applications from everything from tumours to like skin diseases to like hair follicle health â€“ itâ€™s just incredible.
Aman Parmar:Â Right. And without making any claims at this point, you know, GW in the US came out with Epidiolex, which is the first true drug in the CBD space, but youâ€™re seeing companies globally doing incredible work with CBD. No, youâ€™re right: everything from stress to anxiety to, thereâ€™s numerous indications that it works in favour of. Are you taking it yourself? Are you on the CBD?
James West:Â Â Iâ€™m not right now because I â€“ but last week I was doing it every day, just to experience the physical manifestations, what happens when you just do CBD. I was really shocked to learn that there is a, you know, very tangible physical effect where your energy level is just on, you feel super bright and, like, I felt sparkly.
Aman Parmar:Â You know, for the average person, itâ€™ll reduce inflammation in your body. Again, so I always use my mom as sort of that person who is naÃ¯ve to all, but if she sees benefit, sheâ€™ll â€“ I use that as a test subject. And she has knee issues, arthritis and stuff, and she loves it. She takes the oil, takes the cream, puts on the pain patches, and she sees immediate relief. And sheâ€™s seeing those sort of advantages of CBD, and so for me, I take it daily as well, and I do notice that my body is a little bit more limber and loose. Iâ€™ll send you some of our product; you can try it out.
James West:Â Â Iâ€™d love to have it. I actually have been giving it to my dog who has this summer skin condition she gets, and so far itâ€™s nowhere near as bad as it usually is. Sheâ€™s not cured yet, mind you, it got up a head of steam when I started giving her the CBD, so itâ€™s really kind of funny. So the CBDs can generally be shipped across international borders among countries where it is legal?
Aman Parmar:Â So again, it is a bit of a gray area still. Weâ€™re shipping our API material for pharmaceutical purposes, so weâ€™re shipping it from the UK; we have about six or seven relationships with LPs in Canada now for R&D purposes, so weâ€™re shipping it through the dealersâ€™ licensed facilities now in Canada for the R&D. most of the product in the US is manufactured in the US and then shipped within the country, and then the stuff in the UK facility is used within the country. So at this point itâ€™s still a gray area of crossing state or country lines, but hopefully that changes as things move forward. I mean, WADA coming out last year and taking CBD off their banned substance list allowed Olympic athletes, it allowed international amateur athletes, to start taking CBD in their training. So youâ€™ll start seeing more of the major sports leagues follow that in the short term.
James West:Â Â Really? Wow, it makes me want to do some right now. [laughter] So then, whatâ€™s the growth sort of trajectory look like for Isodiol, going out 6, 12, 24 months?
Aman Parmar:Â Great question. I think itâ€™s to continue to improve bottom-line profitability, getting into more mainstream distribution within the US. I think youâ€™re going to see, with the hemp in the Farm Bill as we expected to be approved here in the next 60 days, I think youâ€™re going to see this opportunity to start distributing through the GNCs and the Walmarts within the US at least. And obviously within the UK, thereâ€™s a massive opportunity for unsaturated market, for the most part, to get in there and really establish a foothold.
So the whole distribution side of it, I think, will really start to scale up, getting that mainstream, getting Middle America engaged. You know, we signed a deal with Kathy Ireland last quarter; weâ€™re collaborating or partnering with her on a lot of her market and her network within the US, and sheâ€™s got phenomenal reach within Europe as well. So that should be a good relationship for us moving forward. And then obviously on the pharmaceutical side is continuing to strengthen those partnerships with international pharma companies.
James West:Â Â Right. Do you see large pharmaceutical companies coming into the cannabis sector more broadly? Have you, I mean, from where you sit in the industry, does Isodiol have those relationships, get a sense that theyâ€™re building?
Aman Parmar:Â I think youâ€™re starting to have those conversations, for sure. Internally, weâ€™re starting to, you know, get engagement from those types of companies, so we are seeing that progression. I think as regulation changes, theyâ€™ll be more vocal about their overall acceptance of the sector, so for sure that issue is changing. You know, Big Alcohol has already made some moves into the cannabis space, and I think the pharmaceutical companies are next.
James West:Â Â And what is the perception or the expectation from Isodiolâ€™s point of view, of what is going to happen in terms of Federal de-prohibition in the US?
Aman Parmar:Â I think weâ€™re going to see some positive results coming out of the US when it comes to the CBD space, at least.
James West:Â Â Sure. So John Boehnerâ€™s tabling of that legislation, is that â€“ I mean, itâ€™s hard for us to sort of evaluate that from a Canadian perspective and say well, shouldnâ€™t that mean that itâ€™s about to become legal? But apparently thatâ€™s not the case, because thereâ€™s no guarantee anything is going to happen with that.
Aman Parmar:Â I agree with that, and more important, I think Mitch McConnell, you know, what heâ€™s going through on the hemp side is more in line with what weâ€™re trying to achieve, being focused on the CBD space. I think that the hemp and the Farm Bill is a real catalyst for us in the US.
James West:Â Â Okay, well, thatâ€™s great, Aman. Weâ€™re going to leave it there for now. Weâ€™ll come back to you in a quarterâ€™s time and see how youâ€™re doing. Thanks for joining me today.
Aman Parmar:Â Perfect. Awesome. Thank you so much.