When it comes to products with active ingredients, like medicines and personal care products and supplements, the key to success is the ability of the product to actually deliver the active ingredient where it needs to go. There are all sorts of hurdles along the way within the human body that make effective delivery difficult – the human digestive system, the blood/brain barrier, cell walls, layers of the skin, etc.
Cannabidiol, or CBD, and other cannabinoids are oil-based compounds that are particularly difficult to deliver in the water-based environment of the human body. Oil and water famously don’t mix very well, but they need to if CBD is going to travel in the bloodstream and penetrate the intended tissues.
This is a known issue and there are a number of potential product improvements existing and in development. One of the most effective is the Ultra Shear Technology™ (UltraShear™ or UST™) platform developed by Pressure BioSciences, Inc. (OTCQB: PBIO). The patented UltraShear system utilizes extreme pressure to shear oil drops containing the CBD (and any other oil-based ingredients like nutraceuticals, vitamins, and pharmaceuticals) into nano-size droplets. These droplets are incredibly small, smaller than bacteria, and can be absorbed by the body faster and more efficiently than the original, much larger oil drops.
Pressure BioSciences Inc. (OTCQB: PBIO) CEO Ric Schumacher explains the benefits of the company’s Ultra Shear Technology™ for CBD delivery.
A recent independent study confirmed the effectiveness of UltraShear nanoemulsions for the delivery of CBD. In typical edible formats, CBD is usually delivered at about a 6% rate, meaning about 94% of the CBD is blocked by the body’s metabolic systems, or never really gets out of the oil drop itself. UltraShear nanoemulsions delivered CBD at 18.6% after six hours and 25.4% over 24 hours, exceeding the 6% standard in just the first hour in the body. In fact, UltraShear nanoemulsions proved to be 80% as effective over a 24-hour period compared to a direct IV injection.
Armed with technology that makes oral formulations 4x more efficient, and nearly as efficient as direct injections into the bloodstream, Pressure BioSciences has been introducing its new technology to the CBD industry since October 2023. In that time, UltraShear Technology has been used to create topical sprays for a third party (expected to create $1 million in revenue the first year, ramping from there), in addition to a Maryland CBD company’s NanoBloom CBD Topical Spray. PBI also has an agreement in place with Somalab International to improve that company’s successful line of health and wellness products with UST-based formulations. Most recently, the company booked a $300,000+ order for its nano-CBD topical spray, with the initial shipment expected shortly. It will be sold as PrescriptionGrade Nano-CBD. PBI has quite a few other product development/distribution deals in the works as well.
Recent Acquisition Closed
As recently as Friday, January 19th, PBI took a major step in its process of commercializing the UltraShear platform. The company acquired Uncle Bud’s Hemp and CBD, a globally recognized brand with 70 existing products, a strong and loyal customer base, and celebrity endorsements. The acquisition is a bold move toward vertical integration and should give PBI a significant boost to both its overall revenue and its bottom line.
In addition to revenues from licensing and third-party white label manufacturing, the Uncle Bud’s deal allows PBI to profit from the retail sales of its own products. And rather than launching a new product and trying to build a market around that from the ground up, PBI now has a full stable of successful, proven SKUs under its umbrella.
The fact that UltraShear can greatly enhance the effectiveness of existing and new products only adds to the potential of the newly-constituted company. Garrett Greller, Director of Marketing and Co-Founder of Uncle Bud’s, said: “This acquisition marks a transformative step for Uncle Bud’s. With a commitment to quality, effective solutions, and an impressive lineup of celebrity partners, Uncle Bud’s has democratized Hemp & CBD wellness. Now, joined with PBIO, we are set to innovate across multiple sectors such as pain relief, sexual wellness, skin care, beverages, food, & pet care to name a few. To achieve this goal, Uncle Bud’s is leveraging PBIO’s scientifically proven UltraShear™ platform as a commitment to elevating high quality health & wellness to new heights.”
Following on the heels of the deal, PBI announced the shipment of a $252k order of Sunburn Soother to one of the world’s largest retailers. The company expects more similar orders to follow as Uncle Bud’s has an established nationwide distribution network and an extensive customer base.
The Revenue Picture
PBI reported Q3 2023 revenue of $413,000, and revenue for the first three quarters of 2023 totaled $1,665,400. The bulk of the revenue is from the company’s legacy instrument and consumable sales. Wholesale orders in the neighborhood of $250k (Sunburn Soother) and $300k (PrescriptionGrade Nano-CBD spray) will obviously have a major impact on the company’s revenue picture, and these orders have come in just the first three weeks of the new year. Both of the customers in these deals are expected to place further orders in 2024.
On top of that, there is plenty of room for more revenue growth. Uncle Bud’s has a robust e-commerce operation that returns higher profit margins than wholesale orders. Additionally, the company plans on launching several new products over the coming quarters based on new UltraShear-fueled nanoemulsion formulations.
Bruno Schiavi, President of PBIO’s newly created Consumer Products Business Unit, commented: “With over 9 million products sold in the last five years and a vibrant online community of over 865,000 members, Uncle Bud’s is more than a well-known, nationwide, family values brand: it’s a lifestyle… UltraShear presents a tremendous opportunity to make some of our already successful high-performance products even better, as well as to develop and commercialize new, breakthrough consumer products that depend on oil-soluble active ingredients. The key to success in the consumer products field is knowing what the customer wants, having the capability to create that product and the ability to get it to the consumer at a fair price, and then to execute, execute, execute! We have always been good at this; now with the technical assets and expertise of PBIO, we are clearly poised for exciting new growth ahead!”
The Upshot
For both Pressure BioSciences and potential investors, the vertical acquisition and integration of Uncle Bud’s into PBI’s public structure offers a tremendous growth opportunity. The marriage of Uncle Bud’s established brand success and marketing acumen with PBI’s scientifically proven technical advancements could push the combined entity to the forefront of the CBD market, as well as other nutraceutical, cosmeceutical, and supplement sectors.
Estimates of the size of the CBD industry vary depending on your source, but it is safe to say it’s a multi-billion dollar market that is in the early stages of development and expected to grow significantly in the coming years. PBI has a proven solution to one of its most vexing problems – how to significantly increase the effective absorption of CBD (and other nutraceuticals) by the human body. But PBI doesn’t need to become a dominant player in the near term to return value to shareholders. With a market capitalization in the $10 million range, it just needs to boost its historic revenue numbers of about $2 million annually. The acquisition of Uncle Bud’s seems to be a very quick and sure-fire solution to doing just that. Keep an eye on PBIO!
