Cellular Goods PLC (LSE:CBX) said its skincare products are going on sale on Amazon Marketplace today as it announced an update on its strategy and trading.
The launch on Amazon is part of a pilot programme that enables selected cannabinoid products to be purchased through the platform in the UK.
The provider of premium consumer products based on lab-made cannabinoids said it in talks with Amazon to expand the pilot to its ingestibles Feel Better range.
“A direct relationship with Amazon will broaden the company's ecommerce channels and expand its reach as there is significant consumer demand for cannabinoid products in the UK,” Cellular Goods said in a statement.
The company launched its inaugural wellness range of five Feel Better and Look Better products on 1 December 2021.
Although the customer response has been “highly encouraging”, with a returning customer rate of almost 60% and a 4.7 out of 5 average product rating, revenues have been below internal forecasts, it said.
It explained that the decision by Google and Meta subsidiaries Facebook and Instagram to prohibit the advertising of cannabis-derived products prevented its products from being promoted on those platforms, which negatively impacted sales.
Cellular Goods pointed out that its products are entirely based on lab-produced cannabinoids, which are not derived from the cannabis plant and do not contain any illegal compounds such as THC. It continues to lobby Google and Meta for a change in their policies.
The company said it has made significant changes to the media mix for its upcoming marketing campaign to work around the limitations imposed by Google and Meta, which has led to a deferment of the full marketing launch.
Sales have also been impacted by the anticipated delay in the launch of its face serum and a decision to pause sales of the After-Shave Moisturiser after some batches did not meet to the company's quality specifications.
Following the appointment of consumer goods veteran Anna Chokina as chief executive on 6 December 2021, the company carried out a review of its strategy and go-to-market plans.
Based on the review, Cellular Goods has decided to focus exclusively on wellness products across its three market verticals: the skincare range Look Better, Feel Better supplements and the Function Better recovery range.
READ: Cellular Goods appoints consumer goods veteran Anna Chokina as CEO
"I have reviewed the company's long-term strategy and strengthened its marketing plans in readiness for our big sales push which is ready to go live imminently. As a result, we are now more consumer focused and will be more aggressive in building our revenue base and market presence,” commented Chokina.
"I am convinced there remains a major market opportunity to establish Cellular Goods as a premium British wellness brand. That said, much work needs to be done to execute this strategy effectively and realise our vision. Although it will take time for results of the actions we have implemented to become evident, I look to the future with great optimism."
The company has commenced its marketing campaign, with activities in February including the release of a white paper highlighting the age prevention benefits of cannabigerol (CBG) and cannabidiol (CBD) in skincare.
Cellular Goods' products have been endorsed in the magazine Marie Claire and Metro newspaper, while the company is also using of influencers to promote its products.
The full-scale marketing campaign will begin on 1 March, timed with the release of the company’s face serum, and will then be expanded to include an outdoor campaign in the second quarter of 2022. This will be supported by a strong digital campaign as well as an influencer push, the company said.
Cellular Goods also announced that company founder Alexis Abraham, who served as CEO from the company's IPO in February 2021 until December 2021, will step down from the board on 28 February and will become a consultant to the company on an ad-hoc basis.
The company had cash of £7.73mln as at 18 February 2022. It has no long-term debt.