Amid COVID-19, HempSMART Remains Focused on International Sales

The subsidiary of Nasdaq-listed Marijuana Company of America works with affiliate marketers in countries around the world.

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June 23, 2020

For hemp companies, adding international sales can be challenge, especially in the age of COVID-19, with more than 9 million global confirmed cases and more than 100,000 new cases being reported nearly daily in June. Government shutdowns and social-distancing measures have changed life and business as the world knows it, and it’s unclear when, or if, things will return to normal.

HempSMART, a subsidiary of the Nasdaq-traded Marijuana Company of America (MCOA), underwent some major changes not long before the pandemic. In 2019, Donald Steinberg resigned as MCOA CEO, and Jesus Quintero, formerly CFO, moved into the role. Also, Quintero noted in a prepared statement in a May 2020 press release that MCOA is transitioning from a research and development company into a "marketing product-based company" focused on increasing sales. (The company also shared the following figures: a 176% revenue increase and a 161.3% profit increase between 2018 and 2019.)

“With this new management, they changed … the vision and the direction of the company,” Chief Marketing Officer Gloria Albarran Lynch tells Hemp Grower.

That vision includes a strong focus on international sales of products containing cannabidiol (CBD) and other cannabinoids. HempSMART, which both grows hemp in Oregon and partners with growers, sells about 50% of its product to other countries, Albarran Lynch said. The company, which is based in California, works with somewhere between 600 and 700 affiliate marketers in foreign countries on every continent but Antarctica (and with about 500 marketers in the U.S.).

But the coronavirus pandemic has complicated plan execution. "We established operations in the U.K., and from the United Kingdom, we have been servicing the rest of Europe," Albarran Lynch said. "Right now, because of COVID and also because of Brexit, we've been having a little bit of a problem with delays of the packages."

To overcome these challenges, HempSMART plans to add a location or multiple locations in mainland Europe, Albarran Lynch said. She adds that the company is currently “in talks with a potential partner and investor in Poland,” for instance; the Central European country recently lifted several travel-related and other coronavirus restrictions.

In addition, the company has been sending customers trials of its travel-sized Pain Cream, which retails for $20. The customers will fill out information on a website landing page. "After 15 days, they use it," Albarran Lynch said. "If they don't like it, they can send [it back through the] mail, we'll send them a label and they can ship it back, and there's no charge." If they keep it, they’ll be charged after another 10 days.

Putting aside the ongoing pandemic issues, Albarran Lynch said she’s hopeful that international expansion will yield more opportunities for HempSMART.

She said CBD companies should keep in mind that, depending on the country, CBD is regulated differently. For instance, Brazil allows over-the-counter sale of CBD for pets, while in the United Kingdom, a veterinarian prescription is required. Similarly, HempSMART can’t market Pain Cream everywhere. “The U.K. would not let us use the word ‘pain,’ so in the U.K., it's called Comfort Cream,” Albarran Lynch said. “The same for the capsules—the capsules are Pain Capsules, and in the U.K., [they are] Comfort Capsules.”

So that affiliate marketers and end consumers across the globe can understand hemp products, Albarran Lynch said HempSMART provides them with face-to-face education (when possible) and educational videos that address topics such as the difference between CBD and minor cannabinoids.

Many CBD companies are vying for customer’s attention, Albarran Lynch said. HempSMART has worked at building trust through education provided by Paula Vetter, a family nurse practitioner and medical adviser to the company. Meanwhile, high-quality sourcing and double independent lab testing have been key to the business.

“I think the industry is headed for a shakedown at some point—mergers, acquisitions or disappearance of some [companies] because if you are mediocre in this industry, you're not going to survive because it's just too competitive, especially in markets like California and Colorado,” Albarran Lynch said. “It's just very—I don't want to say saturated, but the market is mature, much more mature.”