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Walking an Unconventional Path

Michael Cammarata

Wildlife biologist Jane Goodall and Neptune Wellness Solutions CEO Michael Cammarata inked a brand-partnership deal to develop plant-based hand sanitizers, essential oils and hemp-derived products under the existing Forest Remedies brand. It is expected to launch in the next few months. Courtesy Photo

How did a dyslexic 13-year-old who learned how to program computers, went on to manage a mainstream pop band and eventually build and sell a national deodorant brand come to lead a cannabis business?

Michael Cammarata, the CEO of Neptune Wellness Solutions, a cannabinoid extractor and product manufacturer based in Laval, Quebec, with facilities in North Carolina, said everything in his life has been a series of chance events—so, not surprisingly, he named a venture capital and private equity firm he owns Random Occurrence. He’s learned a multitude of business lessons from working in technology, advertising, music and consumer packaged goods (CPG). But all of those lessons ultimately lead back to one underlying theme: “If you listen to the consumer, you’re going to be right.”

Cammarata’s journey to the hemp space began in 2017, when he sold his deodorant company, Schmidt’s Naturals, to Unilever. He stayed on as CEO of the brand to expand the natural deodorant line into household goods for the global market until July 2019, when he left Unilever to join and invest in Neptune Wellness Solutions.

Since then, he has led Neptune in somewhat unconventional deals, including trading shares for advertising with New York City-based media conglomerate American Media. Cammarata also gave $24 million in stock warrants to New York-based flavors and scents firm International Flavors & Fragrances to collaborate on a line of CBD and wellness products.

In the months since the coronavirus pandemic shut down much of the economy, Neptune Wellness Solutions has kept moving, signing a brand-partnership deal with renowned wildlife ecologist Jane Goodall and gaining approval from the U.S. and Canadian governments to mass-produce hand sanitizer.

Marijuana Business Magazine sat down with Cammarata to discuss what the cannabis industry can learn from the CPG industry, where he sees opportunities for hemp and marijuana, and how the industry could recover from the coronavirus pandemic.

 

What motivated you to move from consumer packaged goods to cannabis, and how do you plan to apply your experience to the industry?

The pivotal moment was looking at ingredients. At Unilever, I was looking at hemp because it has a very strong moisturizing effect on products … making natural deodorants and natural products more effective. Natural deodorants can last for up to 48 hours. But in a disinfectant wipe, it could get rid of a lot of the toxicity and chemicals if you replace them with (hemp’s) antifungal and antibacterial properties. The cannabis plant has so many different cannabinoids and flavonoids that can apply to the whole household.

The fact that these powerful ingredients that are just now coming to the market really can transform everything you use and make them healthier, better, safer and more efficient—that’s exciting. Cannabis is going to get looked at on a whole different level once personal care, home care and beauty products on the CPG side start using it.

 

 

How do the partnerships you’ve built with International Flavors & Fragrances (IFF) and others contribute to your go-to-market strategy?

We’re IFF’s only cannabis partner in the space. They have decades of expertise in extraction, working with flowers, and now with their merger with DuPont (Nutrition & Biosciences), we have access to 13,000 patents. They are the biggest ingredient provider in the world, so (the partnership) gave us access to their network and expertise.

Looking at the market, there really hasn’t been a megabrand yet in hemp or CBD—or even cannabis, to be quite frank. So (with IFF), we started a group called Neptune Ventures to really be agile and launch two brands fast, in two months: Forest Remedies and Ocean Remedies. We want to offer product transparency, be affordable, offer value to the customer in innovation and partner with key retailers that traditionally don’t focus on hemp to really be accessible in the day-to-day lives of the consumer.

 

What do you think other cannabis companies are doing right and wrong in regard to consumer product goods?

I don’t know who the hell came up with a pricing model for these companies because where did they think a stoner was going to get off the couch, walk to a dispensary (and) wait an hour in line to pay 50%-70% more than they’re (paying for marijuana) from their neighborhood friend? That is not a business model. There is zero innovation—and on top of that, they have pesticides in their products.

The cannabis industry has to make a good leap in getting more efficient with their supply chain and overhead. Some of these bigger companies are spending billions of dollars when they haven’t even gotten sales results from the consumer, and they didn’t listen to the consumer when it came to product innovation. You’ve got to innovate; you’ve got to give them affordable pricing.

It’s tricky because now, with consolidation, it’s going to be like a renaissance. There’s going to be strains that no one ever heard of, there’s going to be hemp products in your household—from toilet paper all the way to hand sanitizer. But now, we’re going to hear consumers say, “OK, guys, show us your innovations, and don’t rip us off.”

 

How can cannabis companies build on that momentum from consumers?

Don’t try to do everything yourself. Partner with people who can bring you innovation and bring you intellectual property (IP); don’t spend billions of dollars trying to create something that already exists. Scale up and down based on demand; focus on innovation and get to eventually having organic biomass as soon as possible, because that is what the consumer wants in any product they have. They don’t want pesticides; they don’t want a whole bunch of chemicals.

Monitor your supply chain. You don’t want to have a mistake like the Honest Co., where something was wrong and an ingredient cost that company a lot of money. You need to know your supply chain inside and out; you need to partner with people that make you more efficient, and you need to look at the IP that’s already on the market that you might not even be focused on.

 

How will the cannabis industry survive this public health crisis? What will be the lessons learned, and how can we adapt these lessons to help us rebound in the future?

The lesson to learn is really looking at the extractors, looking at the supply chain, because there’s redundancy. The greatest thing about this whole (pandemic) is that cannabis has been deemed essential—mostly everywhere. That was a big movement for the cannabis industry.

The second thing that we’ve seen is the supply chain is not prepared. I think cultivation is going to struggle the most, and people that didn’t have the right protocol for extraction and didn’t have the safety standards in place will have some issues. Ultimately, every company should have a plan.

The biggest lesson that CEOs need is to drop down their egos, don’t try and cannibalize, and work together. The ones who collaborate and work together will benefit the consumer. The ones who try to do everything themselves will perish, no doubt about it.

Some people think that they’re better than everybody else. I don’t know how that plays out, but I’ve always made a lot of money and been very successful by doing two things. One is focusing on the consumer and letting them decide what works and what doesn’t and listening to them. The second is collaborating with people, including competitors. Those are the two rules that everybody should look at because the answers are always around you, whether you’re listening to them or not.

This interview has been edited for length and clarity.