Zoetic International PLC (LON:ZOE) is ready to launch a range of CBD sweets, capsules and cosmetics in the UK in time for Christmas, and is mulling expansion of manufacturing capacity in the US to cope with potential demand from new distribution deals.
Expanding the range of products under the Chill brand, which is already on sale in the US via chew pouches and pre-rolled ‘smokes’, the first products to be launched in the UK will be CBD ‘gummies’, sweets available in two strengths and sold in four flavours from early next month, as well as ‘softgel’ capsules.
The beauty products being launching in the first week of December include a hand cream, night cream, facial serum and lip balm, with further product launches planned for next year alongside a broadening of the massage oil that has been on sale since October under the Zoetic brand.
The AIM-listed company said it is upping its marketing game in sync with the launches, with affiliate marketing already up and running in the UK and soon to go live in the US, as well as attending trade shows and ongoing improvements to the website.
Management said overall operating costs remain in line with expectations as further cost savings have been identified.
Over in the US, a trial with distributor Mr. Checkout is now also going live via some of its 150,000 independent retail members, while talks are ongoing with another distributor.
With the popularity of Chill-branded chew pouches stronger than expected, management has started exploring solutions to expand manufacturing capacity, which may include outsourcing some manufacturing or expanding in-house capacity.
The US hemp-growing operation completed the harvest of its outdoor crop last month, with the dry weight less than expected but the quality was said to be “at the top end of expectations”.
In light of low biomass prices, Zoetic has decided to forgo some short-term revenue from selling off dried but untreated plant in order to use the product for its own CBD production, with the longer-term impact on margins expected to be “very positive”.
Chief executive Nick Tulloch said: “The development of six new products in the UK has taken considerable effort from the team in both the UK and US. The primary target was to ensure that the cosmetic and beauty range was available for sale ahead of the Christmas period and I am delighted that we are on track for that.
“Furthermore, the impending launch of our first Chill-branded product in the UK is an important milestone. In conjunction with these product launches, we are upgrading and improving our sales and marketing capabilities in the UK and Europe and investors should expect to see several changes here in the coming months.”