Cannabis oil extract (CBD) is emerging as the latest wellbeing supplement, but Love Hemp Water’s co-founder faced an uphill struggle to get his product to market…
It’s no secret that the oil extracted from low-THC hemp plants is a hot health and mental wellbeing topic. People suffering from various conditions have been reporting benefits, and the trend has recently had official backing. The World Health Organisation published a report in November 2017 on the possible health benefits of CBD oils (sourced from low-level THC cannabis sativa hemp) for pain, anxiety, depression, Alzheimer's, Parkinson's, cancer sufferers and diabetic complications – it can even support a good night's’ sleep. According to the Cannabis Trades Association UK, the number of people using cannabidiol (CBD) oil in the UK has jumped from 125,000 to 250,000 in the last 12 months.
While higher doses do carry side effects, the WHO report said that CBD has a good safety profile and is generally well tolerated, so this seems like a no-brainer, but when Tony Calamita started out in the business confusion and resistance was rife. So how did he take the Love Hemp brand from the fringes to a million-pound business, with Love Hemp Water being stocked through Ocado, one of the UK’s best known supermarket outlets?
RSNG Why have you launched a bottled-water version of your cannabis oil product? TONY CALAMITA, FOUNDER ‘There’s a growing understanding of the wide ranging benefits of cannabis oil to health and wellbeing, which is why we have launched the first everyday hemp water product. We sell our products as a general support for mind and body wellness.’
RSNG How do you recommend people take CBD? TC ‘We recommend starting with a small dose and building it up, because everyone seems to respond differently. Typically you’d start with anywhere from 10-15mg of active CBD per day. Then going up to 50-100mg, then 100-200mg.’
We have not had money injected, or loans and we didn’t pay ourselves a penny for the first year
RSNG How did you start out in the CDB business? TC ‘In March 2015 we had our first online sale of CDB oil. The idea came from by business partner and friend Tom – we’ve known each other since we were kids. His Dad was diagnosed with cancer and like any family member would, he was looking for anything to help and support his condition. Tom came across CBD when he was in the States, but not much was going on in the UK, there were about two suppliers.’
‘We’ve had a few businesses in the past and spotted an opportunity, a gap in the market, and went from there. We started the business with just under £3,000, bought a load of stock from a European supplier, built the website ourselves and when that sold out we re-invested all of it. Then that sold out, then six months later we launched the Love Hemp brand and here we are with nine employees and 2,000-3,000 orders a month. We have not had any money injected, we haven’t had any loans and we didn’t pay ourselves a penny for at least the first year – everything was reinvested.’
RSNG How did you ensure quality on your product at the start? TC ‘We started distributing another brand who were the largest in Europe at the time. We were re-selling other brands and then when we started the Love Hemp Brand we were white labelling. But for the last two years we have had a solid link with a supplier in Colorado and all of our products are made to order. We are just in the process of setting up an accredited clean room facility so we can start bottling and producing onsite in the UK – we’ve done it step by step.’
RSNG What obstacles have you faced along the way? TC ‘To give you an idea of some of the troubles that we have had, bank accounts wouldn’t want to open us accounts. Even as a multi-million pound business now, two weeks ago HSBC rejected us to open a second business account alongside our existing one. And advertising is an issue – we can’t do any paid ads on Facebook, Instagram or Google ads.’
‘One of the biggest problems has been trying to take consistent payment because with Visa and Mastercard it’s very difficult to get a merchant facility to take card payments from customers. We’ve had to resort to bank transfer and bitcoin, and all of these very long-winded methods.’
RSNG What is the banks’ issue with this product? TC ‘It’s a big misunderstanding and they put it under this ‘cannabis’ umbrella. It’s such a big generalisation and they just think of ‘recreational’ cannabis. It’s through a lack of understanding – things are moving slowly but we are still a long way off.’
RSNG So what was the fall out of the recent moves to classify CBD as a medicine? TC ‘That was over October/ November/ 2016 and I won’t lie there was a period of about two weeks where we didn’t sleep very well – we thought it was game over! This was when the MRHA became aware of CBD and sent letters out, which stemmed from people miss-selling the product and making medicinal claims.’
‘The initial stance was saying it’s a medicine and you need a medicine licence to sell it – you had to stop trading within 30 days unless you met various conditions. Since then they have backed off and are looking into doing a proper opinion on CBD. They were talking about a market authorisation licence and for that you are talking million of pounds and 3-5 years, which effectively means it would have taken CBD off the market.’
RSNG What was the reaction to that? TC ‘The MRHA had an onslaught of desperate customers who were panicking that they weren’t going to get the CBD they wanted. So, things have turned around since then and there’s not too much concern about regulation. We’re quite sure we can continue to sell it as a food supplement.’
RSNG Were you prepared for these bumps along the way and how were you mitigating risk? TC ‘We are starting to build up our US presence as a back-up so that we could keep on operating in that way and we looked at relocating to other European countries as well as looking at other cannabinoids that maybe weren’t going to be classified as a medicine.’
RSNG What would be your advice to other startup leaders in new sectors? TC ‘If you’re willing to take a risk you’ve just got to go through the storm and take what comes – roll with the punches. But it wasn’t just that, recently the WHO were making their report and the whole industry was saying: “Oh my God are they going to say it’s not safe and make recommendations to all the governments to classify it?” But it was the total opposite – even in high intravenous doses in mice it was still not toxic.’
We believe we are in the right, so we will fight if we are challenged by regulation
RSNG Do you need to be able to put up a fight if it comes to that? TC ‘The first few times it shook us up but we are in a different position now with money behind us and we’ve got good solicitors so we can put up a fight if we need to because we believe we are in the right, we don’t believe what we are doing is wrong. So, we will fight if we are challenged by regulation.’
RSNG How important is it when building a brand to have integrity in your product? TC ‘It’s been so important in our industry because there have been so many ‘snake oils’ – some of them have no CBD in at all, some have different amounts, some are lying about the ingredients. It’s been really important for us to be transparent, to provide an analytical test.’
‘When you go and buy vitamin C you don’t look at the analytical tests but in the CBD industry we have been forced to do that – we have all the information available to the customer so they can see the quality of the products. In these new sectors there are a lot of cowboys out there who can quickly set up a website and sell something that they have made in their kitchen!’
RSNG What lesson did you learn about communicating with customers in a new market? TC ‘We found it’s really important to be a thought leader, so we were continually uploading good quality educational documents about CBD, hemp and wellness, combined with some good PR. And we have our reviews on our Facebook page and Trustpilot because whatever the review is can’t delete it, you can’t edit it, it’s just there!’
WHAT NEXT? There are a lot of snake oil salesmen out there, and every second website about CBD seems to be a hard sell for a potentially low-quality product. So, do yourself a favour and get informed by the World Health Organisation’s report, available in full as a PDF.
Comments are for information only and should not replace medical care or recommendations. Please check with your Doctor before embarking on exercise or nutrition regimes for the first time.
Follow the writer @mattfitnessray