a surfer
4 years ago
March 4, 2020
Dear michael
Over the past year, we have seen a lot of changes at Alternate Health. The Company closed the largest acquisition in our history, refined our exclusive CBD strategy and made huge strides towards sustainable profitability. As Alternate Health prepares for the next chapter, we’d like to answer some questions from our shareholders.
Shareholder Q & A - March 2020
The following is a general overview of the most common questions we have received lately in a Q and A format. If you have any further questions, please don’t hesitate to reach out to us at our new, investor-focused email – invest@alternatehealth.com.
Where is Alternate Health headed in 2019?
Last May, Alternate Health announced our exclusive focus on hemp-derived CBD product manufacturing and distribution. The Company’s roots have always been in the medical side of the cannabis industry, so we felt this was a natural move for us. Over the company’s history, we have developed relationships with thousands of doctors and tens of thousands of patients. The only missing piece has been monetization.
Alternate Health is certain that medical-focused CBD products are the solution. Building on our history as a software provider, we have are implementing a new model for doctor-driven distribution. Many doctors, and especially cannabis clinics, struggle with securing predictable revenues. Alternate Health can help by offering a complete direct physician-to-patient CBD product distribution system, powered by our software.
The model is simple: We provide doctors with the software they need to dispense to their patients. In addition to our Electronic Health Records and Patient Management System, the Company offers point-of-sale, credit card processing and payment terminals. Doctors receive product samples for patients to test and, after each sale, Alternate Health drop-ships products directly to the patient.
Alternate Health has a huge advantage in this space. In addition to our existing networks, our subsidiary Blaine Labs has a network of more than 10,000 patients. And Blaine Labs’ status as an FDA-licensed pharmaceutical manufacturer gives us the credibility to and authority to produce CBD products that doctors can be confident in recommending.
Why did Alternate Health decide to focus exclusively on hemp and CBD?
In the short term, investing in the medical CBD industry poses far fewer legal risks than recreational cannabis, or even medical marijuana. CBD’s federal legalization following the 2018 Farm Bill creates a much more favourable marketplace. Too often, Alternate Health was told one thing by regulators, only to have the same rule changed the next week.
While the short-term benefits of are obvious, the Company is most interested in the long-term opportunities in medical CBD. Here are just a few of the exciting reasons why:
Health and Wellness: The CBD industry is driven by a desire for people to feel better and healthier. Unlike recreational cannabis, public interest in CBD is focused on improving overall wellness. Society has never been so health-conscious, and we only see more opportunities for growth as CBD becomes more understood.
Price Stability: It is hard to forecast the price of CBD isolates and distillates in the future, so we could need margins significantly fall. We believe medical CBD products will maintain greater margins as patients are willing to pay a premium for products that actually work.
CBD Pharmaceuticals: While it’s just beginning, there is a huge opportunity for CBD in pharmaceuticals and prescription-based treatments. We are interested in the potential for insurance-reimbursable CBD treatments in the future.
How significant is the Blaine Labs acquisition for Alternate Health?
Alternate Health closed the acquisition of Blaine Labs in June 2019. Since then, Blaine Labs has been a key revenue driver for the Company. Since the acquisition, Alternate Health has made strong steps towards driving efficiencies towards profitability and Blaine Labs has been an important part of this process.
Yet, what we are most excited about is Blaine Labs’ potential for the future. This potential goes beyond FDA-licensing and cGMP certification. We’re just as excited by the Blaine Labs’ production capacity, physician-formulated product line and networks. But most of all, we see the extreme value in the experience and efficiency of the Blaine Labs team.
Our strategy of doctor-driven distribution fits perfectly with Blaine Labs’ business model. The staff and team have decades of experience in handling exactly the type of production and shipping logistics we are employing at Alternate Health. We are seeing a seamless transition as we move forward with CBD production and we are confident we have the resources and expertise to scale quickly.
How does the company’s software systems fit into the strategy?
Alternate Health’s software systems are at the heart of the Company’s doctor-driven distribution model. By integrating our Electronic Medical Records platform with our payment, point-of-sale and blockchain-powered inventory software, we offer doctors a complete system for CBD product distribution. Rather than generating revenue through software subscriptions, our technology facilitates sales of our products.
Our software products integrate into a complete system, but each one can be used separately as well. In our doctor-driven model, doctors are free to choose the software products that fit best with their own practice. If they already have an EMR they know and love, no problem. They can continue to use it, while we still deploy our point-of-sale systems.
See the full Q & A at:
https://alternatehealth.com/news/
a surfer
5 years ago
ALTERNATE HEALTH ANNOUNCES STRATEGIC CBD POSITIONING
Exclusive focus on CBD product sales and cannabinoid medicine
TORONTO – May 16, 2019 – Alternate Health Corp., ("Alternate Health" or the "Company") (CSE:AHG) (OTCQB:AHGIF), an international leader in CBD extraction, product development and distribution, announced today that the Company is restructuring its assets towards the potential $22 billion American CBD industry, and is focusing exclusively on hemp-derived cannabinoid extraction, and manufacturing and distributing proprietary medical grade products.
“Alternate Health’s foundational goal has always been to lead the cannabis industry in innovation and new product development, using the research garnered through our software to effectively and efficiently serve patients,” says Howard Mann, CEO of Alternate Health. “With our recently announced $20M transaction with Blaine Labs, an FDA-approved production facility, we are uniquely poised to capture market share in this emerging industry. Since joining Alternate Health in December 2018, I have evaluated the various courses of business, and I feel CBD opportunities represent the Company’s most significant and attainable business model.”
The Future of the Cannabis Industry
According to reports by market research firm Brightside Data, reported in Inc. Magazine, the U.S. CBD industry is estimated to reach $22 billion by 2022. The industry is currently valued at $591 million, but industry analysts expect demand to grow as stricter government regulations and oversight boost consumer confidence in CBD products. A key development will be the upcoming launch of national standards in product manufacturing, moving towards FDA-regulation and cGMP standards.
Alternate Health was founded on the assumption that a value-added approach is the best strategy to capture the medical cannabis industry. Fundamentally, cannabis is an agricultural product, and as the international supply of cannabis grows, we expect profit margins to reflect this fact. The Company believes the long-term future of the industry will be based not on cultivation, but rather on extraction, product manufacturing and distribution.
Focus on CBD and Cannabinoid Medicine
Alternate Health was created in 2014 to provide software solutions to the nascent cannabis industry. Through the Company’s Electronic Medical Records (EMR) and Patient Management systems, Alternate Health has built an extensive physician and patient base in key markets across North America. The Company’s network is a key synergy that led to the acquisition of Blaine Labs, a leading FDA-approved and cGMP-certified medical product manufacturer based in California.
By focusing the Company’s expertise in extraction on hemp-derived cannabinoids, Alternate Health expects to turn Blaine Labs into a leader in CBD products as well. The Company’s existing experience with FDA-approved and cGMP-certified manufacturing is a considerable advantage to Alternate Health’s expansion into the CBD industry, staying ahead of tightening regulations and standards. Blaine Labs also has distribution relationships with major retailers, including Walmart, CVS, Amazon and Walgreens, with the potential for significant growth using Alternate Health’s inventory management and point-of-sale systems.
Restructuring Recreational and Adult-Use Cannabis Assets
Alternate Health’s focus on value-added products and services led the Company to explore opportunities in California’s craft cannabis industry, including extraction, product development and distribution. The Company has developed and acquired assets in this sector, including licenses and cannabis products and brands. But Alternate Health has held off commercializing these assets, assessing developments in local California regulations and the relationship between state governments and federal enforcement.
The Company believes it is best to focus the extraction and software assets, including inventory management and point-of-sale, towards the CBD industry. Currently, the black market continues to be strong, while state legislation remains weak. These factors have created an uncertain industry, prone to misrepresentation. Alternate Health is currently evaluating the best options for either restructuring or selling assets to move the Company’s business completely in line with a CBD focus.
A Leaner, More Profitable Alternate Health
Alternate Health expects the immediate impact of the repositioning will bring significant cost-savings as we push for greater efficiencies and fewer redundancies in our operations. The Company’s acquisition of Blaine Labs provides a solid revenue base and product expertise to anchor Alternate Health’s pivot into the global CBD industry. In-house extraction and software distribution are expected to maintain generous margins, while sales growth will be boosted from new markets in both Alternate Health’s existing physician network and export opportunities across Latin America.
“Alternate Health is focusing all our assets and expertise in creating immediate value for our shareholders,” says Howard Mann. “We believe the CBD industry represents the best opportunities for the Company.”
Based on the Company’s existing assets in extraction, product manufacturing and software-driven distribution, Alternate Health expects few delays in launching new products in both the United States and Latin America. The Company has an advantage with Blaine Labs’ experience in FDA-approved products and cGMP manufacturing and Alternate Health expects to leverage these assets to move ahead of the competition.
About Alternate Health
Alternate Health (CSE: AHG, OTCQB: AHGIF) an international leader in the CBD industry, including extraction, product development and distribution. Alternate Health’s industry-leading software systems provide the platform for the company’s diverse operations, including blockchain tax collection systems, CBD product distribution, hemp-derived extract manufacturing and the first medial cannabis online portal approved by the Florida Department of Health. Through Alternate Health’s subsidiary, Blaine Labs, the Company is a leader in cGMP medical product manufacturing and distribution, with over 50 product SKUs available from major retailers, including Walmart, Amazon, CVS and Walgreens.
Alternate Health’s corporate office is located in Toronto, Canada, with additional offices in Venice, California, and San Antonio, Texas. The Company is well positioned to reinvest internal operating cash flow in its platform and product development over the long term, creating an attractive investment profile for its shareholders. Alternate Health resides in the cannabis sector along with companies like GW Pharmaceuticals, AXIM Biotechnologies Inc., and Canopy Growth Corporation. For more information about Alternate Health Corp., visit www.alternatehealth.com.
Investor Contact
Jim Griffiths | Investor Relations
Jim Tykoliz | Company Director
1.416.607.5757
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