Sativa Group Q&A Alignment with distributors paying off (NEX:SATI)

Sativa Group (NEX:SATI) Chief Executive Officer Henry Lees-Buckley caught up with DirectorsTalk for an exclusive interview to discuss the listing & supply agreement with WH Smith Travel, how alignment with distributors is paying off, why consumers are choosing Goodbody Botanicals, the new regulations and what’s next for the company.

Q1: Henry, there’s some exciting news out today about some new business that you’ve won, what can you tell about it?

A1: We’re very excited about the news release today, we announced that we have been awarded a listing and supply agreement with WH Smith Travel.

I think we all know who WH Travel is, they’ve got hundreds of locations across the country and we’re focussing on the top 100 footfall locations across the UK so that’s the travel part of the business.

For us, this is the first major award from a UK high street retailer so we’re very excited about that and it really puts our Goodbody Botanicals range at the forefront and in front of consumers.

Q2: You’ve talked in the past about your alignment with distributors, why is that important and is if paying off? 

A2: Yes, and that’s a great questions because this is an example of how it pays off. We’ve decided to go to market, rather than having our own fulfilment centres and trying to ship to thousands of locations from our warehouses, we’ve decided to partner with the best.

We’ve got two partnership agreements, one with SHS Distribution and they’re focussed on the groceries and the high street retailers, they’re delivering to those locations across the UK every single day and we’re partnered with them as their exclusive CBD product line. The second one is Alliance Healthcare and they service independent pharmacies across the UK.

So, we ship into both of their warehouses, for example, and they consolidate our products with others and make it easy for each one of the independent pharmacies, the high street retailers to be able to access our products. So, in terms of how you get to market, this is the most effective and efficient way to do.

We are very fortunate, again, to have the exclusive agreement with SHS and they’re doing a terrific job working with the high street retailers to try and help us get our products listed and supply agreements in place there. This agreement we have today with WH Smith is a perfect example of how that works so we’re really looking for more of that. With Alliance Healthcare, we’re already selling into pharmacies across the UK through their network so very much our go-to-market for our primary brands.

We also sell to our customers online and through other fulfilment channels but these are our two primary horses.

Q3: Why do you think customers are selecting Goodbody Botanicals over the competition? 

A3: It’s no more complicated than consumers are looking for CBD they can trust and there’s lots of noise in the market at the moment, you can’t pick up the paper without reading some article.

As I’ve said before, we’re taking the ‘high road’, the high road for us is very simply, we’re not running trying to flog substandard products across the market, we’re doing the opposite of that. We’re making sure we have a very very high quality product, it is compliant to any regulations that are out there and we’re making sure we have that and we ship it to consumers in a packaging that helps them understand what they’re getting.

So, we’ve redone all of our Goodbody Botanicals packaging. We’ve got things like QR Codes which test our quality in each and every batch, we have those QR Codes on every one of our packages so consumers can check the QR code and go back to see the performance of that batch and make sure it’s quality and compliant.

Things such as that really is taking the high road, taking that high quality approach to it through how we go to market, through the actual product, through the packaging to make sure consumers get what they want which is CBD they can trust.

Q4: As you mentioned, there’s been a lot of news recently, and just recently a new regulation coming to the industry. How does that affect your business? 

A4: We embrace it, quite frankly, we’ve been working with CMC, the Centre for Medicinal Cannabis, since the inception to make sure that we bring some regulation and quality control to the industry. I think the industry is lacking, it’s not surprising given it’s new to the UK, the regulations weren’t fit to purpose historically.

Now, this new announcement from the FSA novel foods standard, we’re absolutely embracing that, we’re going down that path and we’ve been working on it for months.

We’re focussed on quality, we’re focussed on compliance, today we work with, obviously, the CMC, but we also work with other trade bodies, Trading Standards for example, we work with the FSA and we also have Home Office licences.

So, for us, we think this is going to be very helpful for the industry, for those products that are substandard or not complying, I think they go away and it helps consumers know at the end of the day know that they’re going to get a product that they can trust anyway.

I think this is helpful for the industry, not just us so we’re fully onboard with that.

Q5: What’s next for Sativa Group?

A5: We’ve got lots on the go.

First and foremost, we’re clearly looking for more listings so our agreement with SHS Distribution, this example of WH Smith is just what we believe to be the first of many going forward. So, we’re working with the majority of the retailers out there that are currently or even prospectively putting CBD on their shelves and we’re working with a lot of them to try and get our products listed. Clearly, that’s our ambition and we’re looking for more listings that way.

We’re also focussed on our other brand, Goodbody Wellness, this historically goes through our stores and we’re know opening up that Goodbody Wellness product line up to the market and we’re specifically focussed on the health, wellness and beauty sector. So, that’s the market focus for us, we’re looking to get that product line into health and wellness stores, to spas and to high-end retailers, it’s a really different look and feel but it’ll have the same quality and compliance standards that our current product range has.

Finally, we’re really looking to expand the product range, we’re looking at things currently, we’re getting close to launching a sports range, as an example, that really fits in both markets.

So, lots of stuff on the go and more to come.

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