Editors Note: This interview was conducted at the NASDAQ Marketsite.
GMR Editor-in-Chief Debra Borchardt: There are so many waters on the market today, why are people drawn to Alkaline Water Co. (NASDAQ: WTER)? Is it those Himalayan minerals?
CEO Ricky Wright: Well, there’s a couple things. The first thing is obviously there’s a bunch of great celebrities out there that are using the alkaline diet and combining it with Alkaline88 and alkaline water. One of the advocates is Tom Brady. He’s done pretty well for himself the last 18 years and so we’ve got that, and then we telegraph ourselves. It says alkaline water, so if you want to learn something about alkaline water, you’ve just heard it from Dr. Oz or somebody else and you get to the shelf and you’re walking down the aisle and you see all these brands and you see Alkaline88, that’s number one. You’ve got the Himalayan minerals, thank you, Rachael Ray, she made that famous, and then we’ve got a great taste profile. Obviously, you can have a lousy meal at a restaurant, you’re not going back. You pick up lousy water, you’re not going back.
Borchardt: Your sales have doubled from 2017 to 2018 and now you’re looking at doing a CBD infused water. Why have you jumped into CBD?
Wright: You know, really it’s being driven by the retailers. About 18 months ago it became a popular item, the CBD. There’s going to be a $22 billion market that some people predict and so one of our retailers approached us about 18 months ago and then seven months ago, when we saw the farm bill was going to get passed and hemp was going to get off the Schedule 1, so we decided to go that route. We have excellent expertise. One of the guys at BMC, Beverage Marketing Corp., they’re general partners on our board, and he kind of gave us some guidance. We’re using a superior product. We’re using Infused Biosciences product and so we’ve decided to bring it to the market.
Borchardt: You said you’re using Infused Biosciences for your hemp-based CBD, correct?
Borchardt: Now, what is going to be the difference in your CBD water versus some others, because CBD tends to have that kind of earthy taste. It’s a very distinctive taste and some people don’t like that. How is your water going to solve for the CBD taste problem?
Wright: You know, that was one of our first goals. We are a lifestyle product. We use a clean beverage. We actually own the trademark for clean beverage, so we wanted to have something that tasted clean that people could trust, so we went away from an isolate. We went to a hemp extract, so it’s going to have the flavonoids, it’s going to have the terpenes, it’s going to have the CBD in it, but it’s derived from a different part of the plant. We get ours from the lipid so you don’t have that same oily taste. It’s more like a general herb, and then we used a great, I mean a great flavor house and they’ve given us a great taste profile. It actually tastes great.
Borchardt: So your water right now is in a lot of great retail outlets. Are they going to accept your CBD water?
Wright: You know, you ask that question, we got two inquiries yesterday from a combination of about 15,000 stores nationwide on what product we’re bringing to the market. Everybody’s setting up a protocol to bring hemp-based water into their stores. Obviously, every retailer’s going to adopt at a different time. Obviously, we still have some FDA hurdles to overcome, so we’re using two law firms out of D.C. to help us navigate that. Once the playing field is known, I think everybody’s going to jump in.
Borchardt: And of course the FDA has said that they want to put their seal of approval on these products. I assume that you’re already going down that path to getting FDA approval.
Wright: We’re working on a GRAS certification. We’re working through that through Infused Biosciences. We’ve also got some pre-1958 stuff that we’re working on, so we think there’s a clear path there, and until then, we’re going to follow the rules. If we do everything in a state, our bottling plants are in Washington, our bottling plants are in Nevada, so we’re going to stick with the rules.
Borchardt: Will the exchanges like Nasdaq accept a company that is using CBD?
Wright: We’ve already had our conversations and we have two law firms. That’s the reason for the two law firms. We’re going to be very judicious in our approach. We’re going to follow the rules. We’re going to be the good guys. We’re going to be the clean guys, not only the clean beverage but clean path. You won’t see us in all markets initially, but you’ll see us in the markets that we’re allowed in.
Borchardt: Okay. When do we get to taste this CBD water?
Wright: The fun part is because of the interstate commerce laws you’ll have to travel to get to the places where we’re manufacturing, but we actually plan to have a run in Washington this month.
Borchardt: All right. Well, it is very exciting. Thank you.