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Zoetic International targets premium end of CBD market

Cosmetic or beauty products that include CBD will be part of the mix.

Zoetic International PLC -
All Zoetic products being entirely THC free

Nick Tulloch’s plan for Zoetic International PLC (LON:ZOE) envisages it becoming one of the UK’s best-known premium CBD brands.

There is an opportunity in the UK as there is not really a pre-dominant brand, says the chief executive of the London-listed firm.

“While there are a lot of CBD products out there, a gap exists in the market for two, three or even four to become recognised brands.”

‘Premium’ is the keyword here for Tulloch, who took over as chief executive of the former US oil and gas firm in September.

“We are selling to people who have a reason and purpose for why they take CBD.

"They go for a premium product that they know will work and contains what it says on the label.”

At present, the CBD space in the UK has a touch of the Wild West about it with little or no regulations and few restrictions on manufacturers.

The market needs to be better regulated says Tulloch, and if that happens it will only benefit companies such as Zoetic.

As well as the name of the PLC, Zoetic is the brand in Europe (and the UK) and Tulloch believes sales here can eventually outstrip the more developed US market.

Topical products, which are absorbed through the skin rather than taken orally, offer huge potential, he believes, and dovetail nicely with the aim to make Zoetic an aspirational brand.

Cosmetic or beauty products that include CBD will be part of the mix.

Skincare products do exist already, he says, but again these are low-quality products with little or no CBD.

“We can generate very good quality, factory-made products”

The Zoetic brand is one of four revenue streams being developed currently through a vertically integrated model.

A feminised seed genetics business and an outdoor crop, where hemp plants are sold wholesale or used by Zoetic to make its own ranges, are on the production side.

US retail is the third leg of the business through the Chill brand.

In April, Zoetic agreed a deal with Schrader Oil and Ox Distributing for pre-rolled CBD smokables, ready-roll papers and CBD chew pouches to be sold in Colorado and by October the number of stores selling its products had risen to 67.

Zoetic in the UK is the fourth part of the model.

There is still a bit of tidying up to do with the sale of the legacy operations of what was formerly an oil and gas business.

Once that is completed, Zoetic will be free to focus fully on its new direction and Tulloch says there is plenty to do.

While it is very early days for the CBD sector, the numbers being bandied about are punchy.

Sales in the UK alone are predicted to jump from £300mln to £16bn, add in the US and the production assets and that is a very big prize for a company currently valued at £12.2mln.

 

Quick facts: Zoetic International PLC

Price: 40.5 GBX

LSE:ZOE
Market: LSE
Market Cap: £78.8 m
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on 09/10/2020

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