April 22, 2020 • 30:47 minutes
#118 – The Impact of the Coronavirus on the CBD Industry with Yoshi Tochiki of cbdMD
Yoshi Tochiki is the Wholesale Product Development Manager at cbdMD. He works to expand cbdMD's brand presence to a global market and is recognized as an authority within the CBD product space.
In this episode, Yoshi and Vadim discuss how the coronavirus has impacted the CBD industry
- Supply Chain Disruptions in the CBD Industry
- cbdMD: The Brand and the Company
- Post-Covid: Which Brands Will Thrive?
- Building Trust in CBD
- cbdMD Award-Winning Products
- Coping with Stress During the Pandemic
- cbdMD New Product Development
Links of Interest
cbd, product, cbdmd, yoshi, sleep, brand, sourcing, customers, batch, stocked, charlotte's web, industry, big box retailer, joe rogan's podcast, boxing career
Vadim Fedorovsky, Host, CBD School Podcast
Yoshi Tochiki, Wholesale Product Development Manager, cbdMD
Table of Contents
All right. And we are back in class. This is Vadim, the CBD professor from cbdschool.com: Your school to learn all about cannabidiol. Hey, everyone, before we get into this episode of the CBD School Podcast, I want to remind you that this episode is sponsored by cbdMD. cbdMD is one of our absolute favorite brands out there in the CBD space right now. And you can get 20% off your whole order at cbdmd.com by using our exclusive coupon code CBDSCHOOL. So head on over to cbdmd.com after you're done listening to this episode, and use the coupon code CBDSCHOOL for 20% off.
I have a very special guest today, my friend and colleague Yoshi, who is the lead of product development at cbdMD. He is joining us — I know for sure the second time, might be the third though. And we're going to be talking about how the virus that's going on right now is impacting the CBD space and a bunch more. So tune in and get ready. Yoshi, thank you for being here. Welcome to the show.
Thank you so much, Vadim. It's a pleasure joining you again. I believe it's our second time, but I'd be honored if there's a third in the future.
I know it was the second. I thought there might have been one before. But we've talked a lot. So that could be me just mixing things up. I think we did the first one exactly a year ago, something like that.
Yeah, almost to the day.
It’s interesting, because I was looking back at our old Skype, and it is really like to the day. So a lot has changed, I'm sure. And you've been with cbdMD from the beginning. Is that right?
Yeah, correct. I was possibly one of the first 10 employees with cbdMD. And it's just been such a roller coaster ride. And, you know, I'm so grateful to be a part of every part of how we've grown.
So for people that are new to the podcast that maybe didn't catch the first episode we did together last year, can you tell us how you got into CBD? And a bit about your background?
Absolutely. I've always been a big proponent of natural healing and natural relief. And because of, you know, my personal journey on that path, I came across CBD, and it worked incredible for me, personally. So coming into an industry, knowing that we have the opportunity to affect so many people that are similar to myself, that are also looking for natural relief, it was just like a natural path for me. And I went out to California, a medical cannabis world for a couple years. I moved back here to Charlotte. And I was incredibly fortunate to have an opportunity with cbdMD at the very emergence of the brand. And we've been seen as a leader in the industry simply because we've never been scared to take chances. So because we've taken those chances and because all of our personal journeys took a chance on CBD, and it's just led us to where we are today.
Yes, that's great. So where is cbdMD based on, for people that don't know?
cbdMD is based here in Charlotte, North Carolina.
CBD Supply Chain Disruptions
Okay, very nice. And you guys have an office there. And that's the headquarters. And we've been partners with you for a while and we thought it would be a great, you know, podcast episode to have you come on and talk about some of the impact of this virus that's going on, obviously, across the world? So one topic that we discussed was the sustainability of the CBD industry during this time, do you think that there's going to be a lot of disruption in terms of the supply chain?
I definitely think there will be. And you kind of hit the perfect nail on the head with that first question. When we talked last year, we were in the initial phases of kind of going into the big leagues, coming from a small company and into a big, big incorporated company. And a part of that was getting these contracts with domestic suppliers for supply chain. I think that the less for looking people who haven't seen certain trends of international business kind of being limited. And then the China tariffs that, you know, unfortunately, affect a lot of people sourcing out of Asia. The people that never pursued another opportunity or another avenue of receiving that, their doors will definitely, you know, be forced to shut down because if they don't have the glass bottles, if they don't have no the MCT oil to blend in and homogenize with the CBD, you're eventually going to run out of product. Unfortunately, that's kind of where we are. But I think it's important for the CBD industry because it's been so saturated with these mid-level players. I think it's really going to let the cream rise to the top.
Speaking of international sourcing, do you think that the ones that are maybe safe — like CBD companies that are sourcing everything from their bottles to their labels to the CBD itself and MCT oil from the US, do you think those are safe?
Absolutely. I think that they are the safer companies. I would hate to say that they are outright completely protected and safe. Because we don't know, we don't know. But I think they are the safer option.
I'd say so. How about cbdMD? Are you in that boat where it's all American made?
Yeah. We're really, really fortunate that we have incredible partners across the domestic United States where we get all of our sourcing done domestically. So we're not as concerned with international brokers or any kind of international sourcing.
That's great. Yeah, that's great. And what do you think about just inside the country, though? Do you think there might be still disruption because certain people aren't working? Like just maybe there's like less farmers or less processors, extractors, less people on the job, do you think that might be a problem?
When it comes to the biomass and the processors, I technically don't see that being as big of a deal. Because of the massive machinery and a lot of how everything has been automated with this heavy duty machinery in the extraction phase of things. You can see a very high scale lab running with 10 people, and easily run that with a crew of five. And it may just be a little bit more delayed. That's maybe one thing that we're experiencing, but it's more so in the packaging and in the physical print realm. It’s just maybe a week delay in delivering the products because of, you know, the skeleton crews operating.
Yes, exactly. And I think every business is experiencing those skeleton crews right now. Just, you know, less people working but I'm sure most CBD companies like yourself have a supply that's ready. You know, it's not like you're growing it like right now for next week's batch or something. You've got, obviously, a supply ready for a long time.
Absolutely. We forecast a few months ahead to make sure that if anything like this were to occur, that we definitely have a safety stock to pull from.
cbdMD: The Brand and the Company
And veering off a bit. I'd like to ask you, I mean, for people that are also new to cbdMD, we've got a bunch of new listeners to the podcast. Can you talk more about the company and sort of what the brand stands for and some of the unique things about it before we get back into some of the virus topics?
Absolutely. I love talking about our history at cbdMD. It really comes from a passionate place. The two co-founders, Scott Coffman and Caryn Dunayer, they came together. And it was about creating a natural relief from a personal experience that they had. Caryn had someone in her family who was affected by cancer. And unfortunately, it did not end positively. And so because of that, she is relentless in pursuing natural healing, and just high quality products that don't necessarily damage your body like those other chemicals that treat those kinds of illnesses. They affect so many other components of your body other than just the virus or just the illness. So a lot of our formation comes from the passion of giving people an opportunity to not experience side effects and any kind of repercussions for pursuing a healthy way of living.
Yes. And I know you guys are also very involved in sports athletes, too. That's a whole nother cbdMD sports side, right?
Absolutely. Our athlete roster is I think you couldn't really compare us to any other CBD brand in the United States right now. We cornered that market pretty well.
I think some — what's that golf player’s name? There’s one guy I know. I’ll know his face.
Yeah, Bubba Watson. And then also in MMA and I also see your stuff all the time promoted by Joe Rogan. This is Joe Rogan's favorite CBD, and I'm not surprised.
Yeah. And he actually pitched our product when we didn't even have an admiral going like a few days ago. He's such a fan of our product. And we run into that a lot with our athletes as well. Our product kind of speaks for itself. And when you have a product like that, every brand ambassador becomes an advocate for the brand, not necessarily because they're getting compensated for it. But it's because their experience is so good with the product that they want everybody else to share it with them.
Yep. That's the best kind. That's exactly right. Where do you guys so far stand on? Where are you growing it? And are you doing the manufacturing in the North Carolina facility and bringing the crop in from somewhere?
So we don't extract here in Charlotte, North Carolina. And we have a few facilities. We have one in Montana, one in Kentucky and one in Colorado. But the manufacturing is done here in Charlotte, North Carolina. As you know and as we've discussed, we've grown over the past year. So while our headquarters are in Charlotte, we've actually branched out our manufacturing and are distributing to separate facilities. But they're all still in Charlotte. So it's just a nice drive down the road and we can go to our distribution facility, the same kind of drive, just a five-minute ride down the road and we're at our lab.
Post-Covid: Which Brands Will Thrive?
That's great. So we were talking before we got started with the recording on which kind of brands in the space would be not only surviving but thriving after this whole thing is over. So what do you think are some characteristics of brands that are going to do well once this is done.
So over the past three weeks, we've been incredibly analytical about what's taking place and try to keep our finger on each KPI, as we call it. And certain things that I think are gonna stand above others are obviously, as we discussed, sourcing, staying in front of any issues that may happen with the sourcing. The second piece to that would be pivoting, the marketing and pivoting how you're providing to wholesalers and to certain customers. As you know, a lot of people aren't wanting to have a face-to-face interaction. So a lot of that engagement is going to have to transfer to social elements on social media. We've seen social media grow leaps and bounds here in just the past five years. And I think we're going to continue to see the creativeness come out using those channels. So I think, number one, if you have the sourcing in place, number two, if you have the team to be able to pivot and provide a lot more digital touch points for customers, those are reel-to-reel characteristics that are going to be the backbone during this transition period.
Yes. And how about the transparency side of things? What do you think? How do you think that will play a role?
Transparency, for us in CBD, has always been at the forefront of who we work with and how you experience a product. In the world that we're living in today, transparency is of the utmost importance. And I think that that probably goes to number one in terms of how customers choose the brand that they go with.
Building Trust in CBD
And what do you think people should look for in a brand to analyze if they're being transparent? What are the main things to look for?
I think if it says it on the label, if you can't find proof about it on their website, or any substantiation, if it says THC free, and you go to that certificate of analysis on that website, and you don't see the THC being tested for, you don't see the residual solvents, residual pesticides, you have a very clear indicator there, that they're either being mistruthful or they're not being completely transparent with what's in their product. So it's about doing the due diligence, and not only just listening to the marketing,
Yes, I think you're right about that. And that's been the case from the beginning, is just that people do need to check the product that they're buying. And hopefully, it's easy for them like the way your company has made it easy on the website to check that stuff and just check it by the batch that they have. And the easier the company can make it, the more I think the customer will gain trust in them.
Absolutely. And you actually brought up a great word of saying the batch that that product came from. A lot of companies aren't really necessarily putting out exact batch numbers for, you know, traceability of how you find out what is exactly in that product. With us, we've invested internally in our operations and our standard operating procedures. So we just became GMP-certified this year. And we recently acquired the NSF certification, which is a pretty big deal. And it's a pretty big deal because when you use cbdMD products now, we have consistent dosing, and it's because of the hard work and the structure that we put into our manufacturing.
So the batch, for people just to nail what we're talking about, it's when you can look up the lab report for the exact — well, I don't want to use the same word, but the exact time that your product is made. So if a company is making a new product every six months, for example, you don't want to see the lab report from two years ago because that could have changed. A lot of things could have changed since then. You want to see the lab report from the six month time period that your product was made. So that's all we mean by the batch. And cbdMD does provide that and other good companies do too. So it's a matter of looking for that and making sure you're not only looking for the lab report, but looking for the lab report from your batch. And if you call the customer service of any brand, they'll know what you're talking about. So it's not like this secret thing. And what you said, Yoshi, about the dosing, what is that? How are you controlling the consistent dosing for the product.
So with our GMP and our standard operating procedures, our product is manufactured identical, identical to the previous batc. If you were to take one of our products that were made last week, and test it against one of the products that were made this week, it's going to be identical because our formulation is a step process. And so long as you follow those guidelines, and you follow those steps, you know that the dosing and the product is going to be consistent across the board. So our dosing really speaks to how we produce our product.
And you know what, that is so important for people that are using the same product and they're buying the same one over and over because they're going to get a different batch, just the way CBD works. It's a fresh product. it has a decent shelf life compared to like a food, but it's not, you know, it's not made once every five years. So people that are buying the same product, they need it to be consistent if they're using it on a weekly or a regular basis.
cbdMD Award-Winning Products
And, you know, Yoshi, we haven't talked in a while. So I didn't get to congratulate you guys on your win on the — recently, you guys got Product of the Year on two products, right? The topicals and the sleep products.
Yes, sir. We have an incredible marketing team. Danielle Crary and Ken Cohn have been absolutely instrumental in making sure that our brand awareness stays top of mind for our customers. And a big piece of that is submitting to Product of the Year. We swept that category for the CBD products in Product of the Year. And, you know, we're incredibly proud of it. And we're featuring in a lot of our marketing. And I think it really speaks volumes to our product.
We did a press release when that happened. So I'll make sure to link that in the show notes. And the sleep product is one I want to touch on. Because a lot of people are just not sleeping. And it's really bad. It's just like, I've gone through that myself, where I was just thinking that six hours was normal or enough or I could handle it. And it just doesn't work out in the end. And it's kind of funny that something so basic, like sleeping, is becoming an issue for people, you know, but it really is a health issue. And it can only get worse if people don't start sleeping, especially during a stressful time like this. So anything that can help you sleep. I mean, I don't really know where the research is on whether or not CBD messes with your REM sleep, but I'm pretty sure it's better than not sleeping at all. So, you know, and I think it's better than some of the harder stuff like Ambien or, you know, which has been shown to to maybe mess with the REM sleep cycles and all that stuff. I'm not an expert. But there's a fantastic episode that a lot of people will reference with Joe Rogan's podcast where he had a sleep expert on. And that one, it really opened my eyes just to how important it is to get those eight hours and whatever can help you do that, I think is a good tool, depending on, you know, just making sure it's not messing with your sleep, you know, still getting good quality.
Absolutely. And we're living in this weird time where every day is Groundhog Day. And we're really creatures of habit. We love going to our favorite gas station before going to work. We love stopping at our favorite, you know, eatery on the way home and grabbing some food up. When we don't have those rhythms and we don't have those routines, you know, it definitely affects, you know, stress and anxiety. If you're not able to have that simple social release, it's just going to continue to pent up or continue to build up in you, which will lead to anxiety, which will lead to lack of sleep. And I truly believe that our products are incredible. We choose to use all natural ingredients, like you mentioned. A lot of those synthetic components, they have addictive properties as well as just a bunch of different side effects. And so, you know, I completely agree that the sleep products, they’re not proven.
Yeah, not yet. But if you are and I take relief from it, I think it's kind of important to have a small personal victory.
I think it's a matter of: is it better than not sleeping at all? I think so. You know, I think if you talk to a doctor, and neither you or I are medical professionals, but I would assume that your doctor would say if it helps you and you're not noticing any negative side effects from it and you're not taking it in huge doses, it's better than not sleeping at all. But that's just my take on it. You know, I use melatonin personally, every night. And it's not fully proven as another example. And I know it's a key ingredient in the PM Blend, but among other ingredients, you know, it's not a proven thing, and it might have some issues. But I know I feel better when I get a good night's rest. So that's why I use it.
Coping with Stress During the Pandemic
And I think a lot of other people are using CBD in the same way for anxiety, whereas they don't want to take Xanax or something like that because that's been proven to be a problem, you know, and that's shown to cause major problems. And I keep talking about Joe Rogan's podcast, but he often will mention how he knows people that use Xanax and when they get off it, their anxieties get worse. And I've experienced that, like where it does work. If you have anxiety, it definitely works. But it kind of can make it worse when it comes back. So have you seen feedback from customers? And I'm not sure if you're dealing with customer support much, but in this time, like have you had an increase in orders or feedback from customers saying that they are using the CBD to help them relieve some of the stress of this period?
I think we've definitely… it hasn't been incredibly overwhelming. But it's absolutely increased from what I'm seeing.
And I'm not surprised, because people are kind of stressed out, I don't think they should be overly stressed. You know, we're gonna get through this. It'll just take some time. And I mean, what do you think in general about this thing? How long does it last? Like in your town, is there a strict quarantine limit day until when it's over? Or is it just kind of indefinite?
Right now, we're kind of living in this indefinite time period. We're really counting on each individual and everybody to be incredibly respectful of the stay at home order, and to limit the exposure to the social areas. And, you know, obviously, practice social distancing. I'm very, very uncertain of how long this is going to last. I think that we're definitely improving. And as the doctors are saying that the curve is flattening. So I truly believe that we're coming to a different part of this. But to try and give a projection, I would just hate to say that, you know, with so many unknowns right now.
What Does the Future Hold for cbdMD?
Yes, yeah, of course, I understand that. But you know, it makes me think about my favorite interview with Mike Tyson. He's talking to the interviewer and the guy asked him, you know, “Mike, do you ever reminisce about your boxing career?” And Mike tells him, “Never, never, I don't think about it.” And the guy is just totally taken aback. He's like, “You were the world champion. You never think about your boxing career?” And Mike Tyson says, “No, I think about the future. I think about all the movies and TV I've done. And I'd rather just just stay there and not think about the past.” So you know, just very empowering to think about what's ahead instead of what's going to be behind us. So what is next for cbdMD? What are some of your big plans for the future?
I think there's a lot of growing still to do for us as a company, where we really maximize our brand awareness to the general public in the past two years. I think our next step is really approaching the availability of our products in these higher end supermarkets, in these big box retailers, and really expanding our availability into those markets. So I think we're still going to gain market share day after day, just because our marketing is so incredible and we have such creative minds behind our marketing. But I think our next step is really to grow into the big box and work with our wholesale partners to just expand in that way.
How are the laws on that front? Because we will always cover the laws when we talk. I mean, is it getting better for CBD companies to get into stores, like those chain retailers?
I think for people similar to us, who are continually investing in themselves and the structure and just the quality of the product, it's definitely becoming easier. And it's only becoming easier because we're investing ahead of time. I think if you're trying to approach a big box retailer without having all your ducks in a row, it can be a shocking experience.
Because those buyers are strict, you know, like those chain retailers. And I think you're right. It's going to be companies that are really investing in providing a product that is certified and compliant to whatever standards are set for safe foods and supplements. You know, that's obviously the direction CBD is going. It's a matter of time, I think. Do you agree that it's actually considered officially a dietary supplement?
I totally agree with that. I think it's only a matter of time.
And with that, it'll come just the standards that are needed in the space. I don't see this going away anywhere and I don't see making it illegal or something like that. And, you know, there's a lot of people that still say that, but I hear it less and less. And we'll see with the new president election and that might have an impact on it. We don't really know right now.
Yet our future is very interesting. But it's an incredible time to be alive and to know that so many young people are educating themselves about the election process and becoming involved. I think that, you know, the next generation has a lot, a lot of work to do. But I think they're up for it.
cbdMD Supply Chain Effects
So for consumers and people listening in or that are interested in either the wholesale opportunities or just buying CBD for themselves, can you say that there's nothing to worry about as far as the supply with cbdMD? All is good on that front?
Absolutely. I would feel comfortable saying that if you are a cbdMD customer, that you should rest assured that we will have your supply and we'll have the products available. And we'll continue to create that availability with our partners, and there should be no issue at all.
And I think that's the most important thing. You know, people are still ordering, they're at home, and they might be ordering even more right now. So just to get stocked up. And, you know, they've always been running out of toilet paper. That whole thing will be so weird when we tell our grandkids about that. You know what I mean?
I know. History books, really. It's just gonna be so interesting.
Because you think it would have been something else like not — I don't think I would have guessed toilet paper would be the thing that people go crazy on. I would have thought it would be like, you know, rice or oatmeal or maybe like water, but not toilet paper.
Or I mean, like, I hate to say it but how about vitamins? How about anything that might boost your immunity that would help fight this off? I mean, I just —
No, that's a good point. It's a good point.
I think people were acting out of fear. And it's so scary when every media channel and every social media outlet is saying it, you know, it's really hard not to just buy in with that fear.
It's like a mirror effect. They see people running for it. I mean, I bought some, but I didn't buy — I wasn't crazy. Just get, you know, get extra. I think one thing that will change after this is that people are always going to keep food and vitamins, like you said. That's good. Vitamin C is really good at this time. It's going to make everybody have a good stock of at least a month, which you should have anyway, of stuff in your house. I think that's kind of the lesson to be learned here. Just be ready for this stuff.
Yeah, yeah, absolutely.
cbdMD New Product Development
But it's good to hear that people can be rest assured that cbdMD is there for them and stocked up. And what about new products? Are there any new products that are in the product development line that you're able to talk about?
So I think I know too much. So I won't go into depth of what we have coming. But we are working on a very specific line of products that I think will make our barrier for entry just slightly easier for our customers to experience our product. And it's going to be really exciting. But we definitely do have new products. I don't really want to divulge them at this time.
No, I understand that. That's the top secret stuff that you keep it under wraps until it's ready to come out, right?
Yeah, yeah, we love leaking stuff when we can. But as you know, there's so many proprietary models within CBD. And we just like to keep ours nice and tight to our chest.
No, I get it. I get it. It's a competitive market out there. So anything you can do to keep stuff tight. That's good.
Well, Yoshi. You know, it was a pleasure to have you on here. And it's always nice to talk to you. And I think we covered a good amount of topics and the most important thing I want to repeat is that this is a hard time for people but in terms of their CBD and getting it from cbdMD, you can rest assured there's no issues. And just if you have any questions, you can always contact their customer service team by email or phone, or reach out to either me or Yoshi with any questions you might have and be happy to point you to the right person.
Absolutely. Absolutely. Vadim, thank you so much for having me and always being so professional. And you know, I always enjoy our conversations. And I always feel like I learned from our conversations. And that's something that I really enjoy about our relationship. One thing that I would want to say just before we hop off, Vadim, is I want to send my deepest condolences to this family brothers and the Fiji family. They were such a massive component to the foundation of our industry. Definitely want to send my thoughts and prayers to them.
Thank you. Yes, I agree. Thank you. All right, Yoshi, well, stay on after this and we'll talk a little bit more.
All right, everybody. That concludes our show for today. I want to thank you for listening. And as you heard Yoshi from cbdMD say they are well stocked and ready to go for all of your orders. Make sure to use the coupon code CBDSCHOOL, which is exclusive to listeners of the CBD School Podcast. That code gets you 20% off your order at cbdmd.com. And you know what? Not only are they one of our top picks for best CBD you can get, they’re also Joe Rogan's favorite CBD and the one that he likes to use the most. So visit cbdmd.com and use the coupon code CBDSCHOOL to get 20% off your order. That's it for today, everyone. Thank you again for listening. And until next time, this is Vadim, the CBD professor from cbdschool.com, signing off.