Of Stalk And Stem — Kannaway’s Growth Story

As the first direct selling company to sell cannabis products, Kannaway’s growth stems from selling CBD oil and hemp-based products.

Oh, cannabis. Whether you go all wobbly at the knees at the mere mention of it or want to gear up for a spirited just-say-no debate, you probably feel passionate about the topic either way. Kannaway is counting on that.

Kannaway CEO Blake Schroeder says everybody has a viewpoint on cannabis, whether it’s negative or positive, educated or not educated. It’s the easiest thing in the world to talk about.

“All I have to do is tell someone I’m in the cannabis industry and immediately they want to talk to me. Whether it’s because they agree or disagree. People have strong opinions, and so you can start a conversation and then educate people. That’s what we’re doing.” Schroeder says.

New, Natural and News

As the first direct selling industry company to market cannabidiol or CBD oil and hemp products, Kannaway operates in the U.S. and Europe. “We were the first direct selling company to launch a CBD product,” Schroeder says. “We’re really pioneers in this space, and we have all the quality standards in place.”

Founded in 2014, Kannaway distributes a wide range of hemp products, including CBD oil supplements and vaporized, CBD-oil infused skincare and hemp-based clothing and pet products, plus much more.

“You can ask anybody whether the cannabis industry is going to be bigger five years from now than it is today and there’s no question.”
— Blake Schroeder, CEO of Kannaway

If you haven’t heard about CBD oil yet, you will. On June 25, 2018, the U.S. Food and Drug Administration (FDA) approved the prescription use of Epidiolex, a purified form of CBD oil, for treating two types of epilepsy.

You might say CBD oil is hotter than a summer’s day in Dallas. It has benefits galore and the scientific studies to back them up—as any Google search attests. It’s new, it’s natural, and it’s news.

The amount of media Kannaway gets is overwhelming Schroeder says. “We are in the news every single day. We’re in publications like Fortune and Time and USA Today. We really educate the public and are the leaders in the space.”

Indeed, CBD oil has differentiated Kannaway in the marketplace and generated excitement and enthusiasm among the company’s brand ambassadors. “We’ve grown our network of brand ambassadors significantly,” Schroeder says.

But Schroeder is careful to note that Kannaway is not just a CBD oil company. They are educating the world about the cannabis plant and developing products across multiple lines. “We’re not just a story that’s going to come and go,” he says.

The Pot Thickens

To clarify, Kannaway does not sell psychoactive substances; it sells hemp-based products. Hemp is marijuana’s non-psychoactive cousin. Even though CBD oil comes from marijuana plants, it doesn’t create a “high” effect like the intoxication caused by another cannabinoid, known as THC.

Still, how does Kannaway legally sell CBD oil products and other products that stem from industrial hemp?

“We really educate the public and are the leaders in the space.”
— Blake Schroeder

“The foundation for all this was a 2004 Ninth Circuit Court of Appeals case called Hemp Industries Association v. the Drug Enforcement Administration,” Schroeder says. The Ninth Circuit held that naturally occurring cannabinoids from exempt parts of the cannabis plant can be used in food supplements in our country.

When Schroeder says ‘exempt,’ he means the stalk and stem. That’s why Kannaway is able to sell products that are from the exempt parts of the cannabis plant. The Ninth Circuit Court of Appeals case, abbreviated HIA v. DEA, provides the foundation for legal product sales.

Headquartered in Southern California—“where people could care less if you use cannabis in any form,” as Schroeder quips—Kannaway has a parent company called Medical Marijuana, Inc., or MMI. Touting itself as the “legal cannabis leader,” MMI is traded on the pink sheets under the symbol MJNA (OTCMKTS).

“Our parent company, Medical Marijuana, Inc., is the first ever publicly held cannabis company,” Schroeder says. “They figured out all the legalities and where to grow it, and then figured out how to work with the current laws and bring it here to the United States.”

Schroeder says what Kannaway does really well is educating others and provide an opportunity for people to get involved in the cannabis space that otherwise doesn’t exist. “This is a way for people to get involved in the cannabis industry by simply registering as a Kannaway Brand Ambassador, getting some great products and being able to educate the world,” he adds.

Budding Growth Ahead

Although Kannaway was founded in 2014, March 2016 marks the start of the company’s real re-design which marked the foundation for phenomenal long-term growth. That’s when Schroeder joined the company as CEO. “Since March of 2016 we have worked hard to earn a solid reception and reputation in the direct selling industry. Given my contacts in the industry, I’ve been able to recruit a great corporate team with lots of experience from big companies to come join us.”

Since March 2016 until now, the company has grown nearly 70 times in monthly revenue. “We’ve been on a good run,” he adds. “And I would expect it to continue.”

The U.S. hemp market pulled in $820 million in sales in 2017 and is poised to reach a $1 billion market in 2018 led by hemp-derived CBD, food, personal care, and industrial products, according to Hemp Business Journal. The hemp industry was bolstered by explosive growth in the hemp-derived CBD category, which grew from a market that did not exist five years ago to $190 million in sales in 2017.

“Everybody has a viewpoint on cannabis, whether it’s negative or positive, or educated or not educated.”
— Blake Schroeder

Judging by the signs, that growth isn’t going to slow down either. It’s likely going to speed up, particularly with the impending passage of the 2018 Farm Bill, which includes a provision that would put hemp on the same standing as any other commodity crop.

“You can ask anybody whether the cannabis industry is going to be bigger five years from now than it is today and there’s no question that it will be,” Schroeder says. “Laws are changing in our country and every state, and that’s happening around the world. And it’s in the news every single day. It’s really exciting to be a part of.”

Future Plans

As far as Kannaway’s future plans and growth strategy, Schroeder says things are moving at a rapid clip. “It’s an interesting space because a lot of things are changing all the time,” he says. For example, the company recently launched in Europe, becoming the first direct selling company to offer CBD products throughout the EU. “We’re a company of firsts, and we are proud to be the first and only direct sales company in Europe,” Schroeder says.

Kannaway also has several new products in the works, including a CBD-based coffee and a CBD-based tea which will be released in the coming months. “The company has been growing quite quickly,” Schroeder says. “In the last year, we’ve launched so many products that I think we need to tighten up our messaging and tighten up our branding. That is what we’re working on right now.”

According to Schroeder, there are more than 10,000 uses for an industrial hemp plant—making the possibilities for new products endless. “CBD is just one of over 130 different cannabinoid profiles you can find in an industrial hemp plant,” he adds. “So there are going to be up-and-coming, new cannabis profiles that can be commercialized.”

Simply educating people on the differences between marijuana and industrial hemp is a challenge, Schroeder says. “We offer a unique opportunity for people who want to understand the space and be involved in it. And for people who want to be part of the future—because this is the future.”