Relevium Technologies Inc (CVE:RLV) Focus On Pediatric Applications for Cannabinoids
Relevium Technologies Inc.(CVE:RLV) (OTCMKTS:RLLVF) (FRA:6BX) CEO Aurelio Useche joins Midas Letter to introduce the company. Relevium is a publicly traded corporation strategically focused on the expansion and acquisition of entrepreneurial brands within the health and wellness sector. Their focus is on being a trusted source of high-quality nutraceutical and CBD products, specifically under three verticals: Pain Relief, Recovery, and Performance. With operations in Colombia, Aurelio discusses the company’s operations and future plans including a joint venture with an Italian company for their first commercial grow. Aurelio elaborates on Relevium Technologies products and the pediatric applications for cannabinoids. He looks to the future and divulges the drivers of success for 2020.
James West: I’m joined now by Relevium Technologies CEO Aurelio Useche. Aurelio, welcome.
Aurelio Useche: Thank you for having me here.
James West: Aurelio, let’s start with a quick overview: what is it that Relevium Technologies does?
Aurelio Useche: Yeah, so Relevium Technologies has two business units. One is a natural product business, and we have 45 products on the market, mainly sold in the United States. Anything from turmerics, omegas and so on, sold online through our brand Biorganics. Through that brand, we are just launching some CBD formulations with our existing formulations into the US market. So that business unit has become very centric around trying to leverage the CBD market in the United States.
The other company that we have is called Biocannabix. Biocannabix is a biopharma company, vertically integrated. We have operations in Montreal, where we do all the research that we’re doing, and it’s focused on pediatric applications of cannabinoid formulations.
James West: Interesting.
Aurelio Useche: And we have operations in Colombia, so we have the cultivation project in Colombia, we have extraction in Colombia, and more important, we have an entire ecosystem of medical and clinical talent, I guess, and that’s what we’re going to be doing all – we’re starting to do all the clinical and pre-clinical work for the new developments in pediatrics that we’re doing.
James West: I see. So the Colombian aspect, like, we spend a lot of time in Colombia. I love Colombia, and especially, you know, cannabis in Colombia strikes me as so logical that it’s ridiculous. So, to what extent – like, you’ve got three sort of different divisions going on – which one is the most lucrative for the near-term?
Aurelio Useche: So the near term, BGX, which is the over-the-counter health and wellness company, is the one that’s producing revenues on the company, and we believe that in the short term, it’s the one that is going to drive a little bit of the growth leveraging CBD in the US.
However, we’re estimating that next year we’re going to be in production in Colombia, and through the initials of why we decided to be vertically integrated is that we would have some cash flows at the beginning. So when you’re in pharma, there are no cash flows. There’s a lot of investments over time. So we wanted to have some cash flows, so, through the sale of extracts and so on and so forth from export, our Colombia facility will get into cash flowing for next year.
James West: Okay.
Aurelio Useche: So in terms of next year, if I have to look at it, I think both will pull their own weight equally.
James West: All right, so is Relevium Technologies, then, primarily a biotechnology company?
Aurelio Useche: I would say that we are a hybrid of consumer packaged goods over the counter, leveraging CBD, but at heart, we’re a biopharma focused on pediatric applications of cannabis.
James West: Sure. Whereabouts in Colombia do you grow cannabis?
Aurelio Useche: Cali.
James West: Cali? Ah, interesting. We looked at an operation in the – I’m trying to remember the name of the valley there that’s just –
Aurelio Useche: The Cauca Valley?
James West: Cauca Valley. That’s just on the way there. We were looking at a company that was getting organized there; beautiful country. So, is the product that you’re going to export from Colombia, will that be GMP-certified so that you can export to Europe and everything?
Aurelio Useche: EU GMP, exactly. Absolutely.
James West: EU GMP, wow.
Aurelio Useche: It’s a must.
James West: Yeah, sure. So this is, to me, very intriguing, because your focus on pediatric applications for cannabinoids is an area that most people immediately have a cerebral knee-jerk horror to. Like, children and drugs, what? It’s like, no. And I constantly have to remind people that THC generally only becomes psychotropic once you decarboxylated it at a certain temperature, but the THC acid basically delivers a lot of the medicinal benefits of THC and cannabinoids and doesn’t get people high. And some people just can’t wrap their heads around that.
Aurelio Useche: So THC-A is being used right now for hyperactivity, for anything behavioural, and you’re right: it doesn’t have a psychoactive effect until it’s heated. We are looking at THC-V for another application, and it’s a true pharma application, but that’s a variant, so it’s a little bit more difficult to extract and to control. So we may have to go non-plant-derived.
James West: Sure. So you’re using the explosion in the cannabis space, basically, to fund R&D into pediatric application space; that’s sort of one of the philosophies I kind of detect.
Aurelio Useche: Correct. And so, here is what’s interesting: so while the market here has, I don’t want to say imploded, but it has imploded; you know, a lot of companies have seen their market valuations drop significantly –
James West: We just say it’s a discount.
Aurelio Useche: Yeah, it’s a discount. And I think the whole market is shifting from promises and blue sky to actual performance and execution. So I think as we’re seeing that, we’re seeing investors outside of North America becoming more interested in this market. Case in point, Colombia.
So Colombia is a perfect market for us. Why? Because the country has legalized it; they have a legacy that has been very negative in terms of the drug trade and so on and so forth, so a lot of the well-to-do families there did not invest in the cannabis upside. Therefore, for us to be there locally and now driving medicine instead of driving, you know, drug trafficking, all that money is there. It’s very interesting to join us and be part of this project. So we’re very excited to be in Colombia, and I think it’s going to be something very interesting for the company and obviously for the shareholders.
James West: You bet. Are you Colombian?
Aurelio Useche: I am Venezuelan.
James West: Venezuelan. Oh, okay, interesting. We have so much to talk about outside of this, it’s crazy. The – so when does the Colombian operation start producing a finished product?
Aurelio Useche: So we are going into our first commercial grow probably around February or March of next year. We’re going through a process of government validation of our initial pilot, and that takes several months.
James West: Sure. So do you have the extraction infrastructure in place at this point, or is that still in progress?
Aurelio Useche: We have a – interesting, we decided not to do it ourselves. So we have a joint venture with an Italian company, and they’re going to set up, it’s a unique technology that doesn’t use any solvents, so it’s not CO2, it’s not ethanol, it’s not anything that we know, and they’re going to set up the equipment and we’re just going to be working on a basis of a royalty.
James West: Really?
Aurelio Useche: They will operate it…oh, it’s amazing. It’s a – we’re very, very happy.
James West: Is it mechanically based or something, if it’s no solvents?
Aurelio Useche: They use enzymes.
James West: Enzymes!
Aurelio Useche: Some special enzymes that allow the extraction of the cannabinoids.
James West: Huh, not a solvent, enzymes. Wow, that’s super intriguing. Now I’m really excited to come and visit your operation, because I’ve heard of almost everything in the cannabis space; that, I haven’t heard of. Okay, so there’s so much going on. Are you in a position to market your performance-oriented products to Europe at this point, with cannabinoids in them? Is that something that’s possible, given all the regulations?
Aurelio Useche: It’s complicated. So in the US – let’s start with Canada. So in Canada, as you know, CBD and so on, it’s difficult. You have to be licensed, and we have something that we announced, that we’re doing an acquisition to enable us to do the selling in Canada.
The US is the easiest part in the market.
James West: CBD is just everywhere.
Aurelio Useche: And that means it’s easier, but at the same, there’s a lot of competition. There’s a lot of ‘me too’ products. So the challenge there is to make sure that you use your own brand, a recognized brand, and sell to the market that you currently sell to.
Now, if you look at exporting to Europe, the problem with Europe is that we do have a partner in Europe, and we’re able to put our product through, especially in Germany, with, we have segregated about 12 PZN numbers – so those are numbers that are required for any natural product to be put in a pharmacy. And so we will do it, we will enter into the market through our partners down there. So they have their own brand, and we’re going to do a joint formulation and joint development.
James West: Sure. Okay, and then, so what would you say in 2020 are going to be the big drivers of success for the shareholders?
Aurelio Useche: I think we’re going to see the area of, so on the over-the-counter side it’s going to be some consolidation of our assets. So we have now a manufacturing facility in Montreal that we’ve been negotiating to acquire, and I think that’s going to be instrumental in terms of the cost part and increasing our gross margins. We will see that in place and operating next year.
And in terms of Biocannabix, I think the biggest, so the initial value driver is going to be the cash flows from exporting extracts; the introduction of patents that we’re currently working on; and the beginning of the clinical work that we have set up for three projects that we have in Colombia.
James West: Okay, great. All right, well, Aurelio, let’s leave it there for now, and we’ll definitely have you back, and we would like to come and visit your facility in Colombia, for sure.
Aurelio Useche: Anytime. You’re more than welcome.
James West: All right, we’ll leave it there for now. Thanks for joining me today.
Aurelio Useche: Thank you very much.
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