Zoetic Interntnl PLC - Operational update
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
("Zoetic" or the "Company")
· First US distribution contract in final form
· Contract manufacturing of smokables secured
· Website launched for the sale of feminised seeds
· Selected to appear on "Behind the Scenes with
Chill in the US
Further to the announcement on
As anticipated, retail prices for both products will be in the sub-US$10 range and Zoetic will sell to the distributors at around half of that price, earning around a 50% gross margin. It is the parties' intention that the Chill chew pouches and smokables will be presented in display cases in all stores to enhance their visibility to customers. Based on the display cases Zoetic already has in stock, the Company's objective is initially to supply around 500 new stores and build the network from there, subject to customer demand, fabrication of display cases and manufacturing constraints.
Zoetic / Chill in the
During February the
Whilst this ruling came as no surprise, Zoetic welcomes the clarity that now exists in the CBD industry and the Board considers that this greater level of regulation will be to the advantage of companies such as Zoetic that are determined to supply only the highest quality products and to ensure that all products meet the required standards. Furthermore, in anticipation of these new regulations, and in conjunction with its manufacturing partners, the management team had already commenced work to ensure compliance with the new regulations. Barring any unexpected events, Zoetic's board is confident that its products will be fully compliant ahead of the deadline of
The new rules will have a number of consequences for the industry and these were well summarised in an article published by New Frontier Data on 23 February. The author concluded that "Most current CBD companies are unlikely to survive past March of next year with their current offerings" and Zoetic in particular noted the observation that:
"Broad and full-spectrum extracts may have difficulty getting approved, as most producers are unlikely to have adequate toxicology data for every compound found present in such products. It will be easier to produce safety data for CBD isolate, which could usher in CBD isolate as the standard for oils, capsules, and additives in foods and beverages."
All of Zoetic's existing range of ingestible CBD products are manufactured using CBD isolate. If the implications of the new rules are in line with many commentators' expectations, then the Company's existing portfolio of products is far better placed to obtain novel food authorisation than those of many of the Company's competitors.
The full text of the New Frontier Data article is available on the Company's LinkedIn page at www.linkedin.com/company/zoeticinternational. Further details on the application process are set out at the end of this announcement.
Zoetic has also become a member of the
Zoetic has also launched a new website, www.zoeticorganics.com, from which it will advertise and sell its feminised hemp seeds. This does not alter the Company's strategy of dealing directly with brokers and large growers, but it provides a "shop window" from which to advertise the Company's range. Discussions are now underway with potential buyers and seed brokers in both the US and
Developing Zoetic's profile in the US
In its announcement on
The programme is shown on US public television channels throughout the country in five-minute slots over a 12 month period and the producers estimate that total reach in that period may be in the range of 40 to 60 million homes. In addition to the documentary, Behind the Scenes will produce a one-minute educational commercial segment which will air around 400 times on networks such as CNBC,
Filming is scheduled to take place at Zoetic's Debeque facility in May and the programme should commence showing in the summer of this year.
Further details on "Behind the Scenes with
"During the past month, we have made good progress on finalising our first major contract to distribute Chill products in the US. The majority of the necessary agreements and logistics are in place and, once we complete testing of the outsourced manufacturing of our chew pouches, we are in a position to proceed.
"Over in the
"We have also made the first steps towards selling our feminised hemp seeds, marking the culmination of several months of planning and development.
"Overall this has been another month of excellent progress as we build Zoetic into a company capable of generating revenue on a number of fronts. Securing our appearance on "Behind the Scenes" represents a publicity opportunity in the US that we could not have conceived of previously and the timing, coming on the back of our opportunities with our retail products and feminised seeds, is ideal."
Nicholas Malins Smith
Further re FSA application process
A novel food authorisation application for a CBD food made before
The application must include:
· details of the ingredients and production process;
· the composition of the food and stability data;
· history of use, proposed uses, use levels and anticipated intake;
· details of absorption, distribution, metabolism and excretion;
· nutritional information;
· toxicological and clinical data; and
Once received, the appropriate authority will either validate the application or reject it on the basis that the application does not contain all the necessary elements. Once validated, the application is assessed for risk.
In addition to the new rules in respect of making a novel food authorisation application, the FSA also issued further safety advice including recommending that vulnerable groups (such as pregnant or breast feeding mothers and people on medication) should not consume CBD products and healthy adults should consume no more than 70mg/day.
This information is provided by RNS, the news service of the
Quick facts: Zoetic International PLC
Market Cap: £16.07 m
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