Marijuana Business Magazine October 2018

of CBD that sells for $5.99, a 150-milligram bottle of CBD oil for $25, or a 1.75-ounce balm for $49.99, for example – provide a nice “entry point” to Green Gorilla’s product line and is where most consumers start, DeForest said. The company also uses its web- site to educate consumers about the health benefits of olive oil, which Green Gorilla uses as a carrier for CBD in its line of Hemp & Olive oils. In addi- tion, the company shares laboratory results on its website that show the purity of the CBD used in its products. As Green Gorilla’s revenue increases and fixed overhead costs stay steady, the company strategically examines the prices of its products and lowers them when it can. As for price wars: “If that’s your strategy, you’re going to lose sooner or later,” DeForest said. Vertically Integrate Operations To better control the consistency, purity and manufacturing costs of its products and lead the market in develop- ing hemp-derived CBD offerings, Green Gorilla signed a deal last year with Pure Grow Soil to create a new vertical: the Master Grower line of soil for biodynamic farming. The Master Grower soil will be sold to cultivators. And, eventually, it will be used to grow hemp used in Green Gorilla’s product lines. Another division of Green Gorilla, Gorilla FarmCo, will oversee seed genetics, planting, growth and har- vesting of hemp plants on an 80-acre piece of land, scalable to more than a thousand acres. The first harvest is due in late 2018, and a proprietary CO2 extraction process will supply the CBD oil in Green Gorilla’s prod- uct lines. The remain- ing hemp biomass will be used to develop additional products the company plans to sell to other companies. The move toward verti- cal integration is key to Green Gorilla’s long-term strategy of being a global market leader. “As this business expands, CBD will become a commodity,” Saxton said. “But getting the consistent, organic product we want, we need to control it in some capacity. So, we either have to have significant partners or we have to be vertically integrated.” ◆ Steve DeForest is the chief operating officer and chief compliance officer for Green Gorilla. Photo courtesy of Green Gorilla October 2018 • Marijuana Business Magazine • 95

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