During the last year, there have been significant changes in the landscape of the cannabis industry and this has created new opportunities for companies.
Cannabidiol (CBD) has been an attractive vertical of the cannabis industry as it has been experiencing rapid growth and this is an opportunity we have been closely following for several years. During the last year, this opportunity became much more significant as some of the world’s largest retailers started working with companies that create and sell CBD products.
Demand for products that contain CBD has been steadily increasing and this is an opportunity that we find to be very exciting. In late 2018, President Trump signed the Farm Bill into law. This legislation legalized CBD and we are favorable on the growth prospects associated with this significant change in the law. We have been focused on companies that will benefit from the changing landscape as these are some of the most attractive opportunities.
Relevium Technologies (RLV.V) (RLLVF) is a company that has been benefiting and it represents a multi-faceted growth opportunity that is laser focused on the cannabis industry, with a primary focus on online distribution. Relevium operates through two wholly-owned subsidiaries:
- BGX E-Health LLC (BGX): BGX markets dietary supplements, nutraceuticals, sports nutrition and cosmeceuticals primarily through its Bioganix brand portfolio in the United States and Europe. Bioganix is currently being sold by some of the world’s largest retailers including Walmart.com and Amazon.com.
- Biocannabix Health Corporation (BCX): BCX is focused on creating a vertically integrated medical cannabis company in the nutraceutical space. The company is in the process of licensing and retrofitting a facility that will focus on the development of proprietary products.
Through organic and inorganic growth initiatives, Relevium has been able to improve its position in the health and wellness market and has been creating a premium line of products. The company’s strategy for developing and growing its brands includes expanding its product offerings, adding new distribution channels, and developing partnerships that add value through exclusive formulations.
When it comes to strategic partnerships and relationships, Relevium has done a fantastic job at securing distribution through massive retailers like Walmart.com and Amazon.com. The company’s products have been generating traction and we expect to see this trend continue and support growth. Going forward, we expect to see Relevium secure new strategic relationships and believe that this will be a catalyst for the business.
Second Quarter Financials Show Strong Growth
Earlier this month, Relevium Technologies released second quarter financial results that showed impressive growth. During the quarter, the company generated more than $1 million in revenue and recorded a major improvement in its working capital. Relevium has significant growth prospects and we are monitoring how the team continues to execute and advance its fundamental story.
During the quarter, BGX launched 30 new Bioganix Gold Series products, which are being offered exclusively to Walmart shoppers. We are favorable on this strategic relationship due to the visibility that it creates for the product and the revenue that is being generated. Relevium has a multi-faceted growth strategy that includes increased brand recognition as well as improved marketplace visibility. The company plans to accomplish this by increasing the number of market offerings which are expected to generate additional revenue from a completely different consumer audience.
BGX is currently testing a complete line of dietary supplements that are derived from cannabis with an initial focus on hemp derived whole plant organic extract rich in CBD (cannabidiol). The product line will be marketed through its brand LeefyLyfe and will be sold first in Europe and then in North America.
One of the reasons we are favorable on this subsidiary is due to the quality of products and the focus on organic extracts. The company uses cannabinoids and ingredients that have achieved GRAS status (generally accepted as safe) to create brands that are sold via wholesale channels, retail channels and online distribution.
Relevium Reports a Significant Acquisition
Another significant development that is worth highlighting was the acquisition of an exclusive Canadian license to Cannakids, a pediatric focused line of medical cannabis formulations. Once the acquisition is approved by the TSX, Relevium expects to start the process of building the business infrastructure to educate, obtain approvals, commercialize and conduct research.
Later this year, Relevium expects to have the necessary commercial, educational and research infrastructure in Canada to facilitate the commercialization of its pediatric licensed brand Cannakids. We are favorable on this acquisition and will monitor how the team is able to execute on this.
Over the next twelve to eighteen months, the most significant drivers for Relevium will be the scaling of new revenue streams created by the company’s expansion into nutri-cosmeceutical direct response sales, evidence-based and benefit focused nutraceutical products sold through social media and direct response channels.
Subject to the clarification of legislation for CBD as a supplement in Europe and the United States, Relevium’s management team expects to be in a position to fully commercialize its new LeefyLyfe formulations and for this to become a significant revenue stream for the company. We are favorable on this potential growth driver and will monitor how the team executes on this.
An Opportunity to be Watching
During the last year, Relevium Technologies has been executing on all cylinders and we believe that this is an opportunity that has been flying under the radar. The company is in the early innings of a major expansion and we are watching how the team continues to execute on its current growth initiatives.
The management team is confident with the recent transactions and believes that the combination of new revenue streams and a disciplined operating cost structure will result in the company achieving sustained positive results for fiscal fourth quarter of 2019. This would be a significant accomplishment and we will monitor how the team executes from here.
Relevium has an attractive valuation and is a company that has significant catalysts for growth. We believe that the recent pressure has made this an opportunity that is hard to ignore and we are keeping the shares on our radar. The United States symbol (OTCQB: RLLVF) recently received DTC edibility and this should make it easier for investors.
To learn more about Relevium or to stay up-to-date with its developments, please email firstname.lastname@example.org.
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