Elemental Pharma: A Look Inside

Elemental Pharma, Inc. is a CBD pharmaceutical company that has recently generated attention among investors with its latest featured piece in a Hemp CBD emagazine. The magazine showcased all of Elemental Pharma's rolodex of cannabis-related operations and CBD businesses in 88 different pages, complete with 7 sections and a FAQ summary.

As a vertically integrated CBD company, Elemental Pharma controls every stage of the process from seed to shelf. The company grows hemp on its own land in Oregon, processes that hemp to extract CBD at its own manufacturing facilities, then distributes CBD products through its pharmacy and retail network.

Unlike other CBD companies, Elemental Pharma is also focusing specifically on both retail sales and pharmaceutical sales. It also is opening up a marketing arm under the name Renovize for the networking crowd.

Over 2019, Elemental Pharma established more than 150 sales channels while generating revenues of $9 million. Plus, Elemental Pharma’s experienced management team has investors buzzing.

Elemental Pharma was featured in the February 2020 issue of HempCBD Investor Magazine.

Elemental Pharma has been in the news lately because the company’s manufacturing facilities have recently been approved by the FDA. The company has also received approvals for OTC, White Label, Wholesale, and FDA registered brands.

Let’s take a closer look at Elemental Pharma, Inc. and everything you need to know about the company.

What is Elemental Pharma?

Elemental Pharma is a vertically integrated CBD pharmaceutical company that grows hemp, manufactures CBD pharmaceuticals, and distributes CBD to its pharmacy network.

The company’s extraction facilities currently harvest 55,000 kilograms of biomass each year. Those facilities have been approved by the United States Food and Drug Administration (FDA).

Why haven’t you heard of Elemental Pharma before? There are three main reasons.

First, the company is still new and growing. Second, the company operates mostly through eight wholly owned subsidiaries. Third, Elemental Pharma does not have an official website.

In fact, virtually everything we know about Elemental Pharma comes from the company’s recent profile in HempCBD Investor Magazine.

Fortunately, we’ve done some digging to reveal more information about Elemental Pharma and how the company operates.

Elemental Pharma is a Vertically Integrated Company

Elemental Pharma is a vertically integrated company that controls the growth, extraction, retail sales, and pharmaceutical distribution of its hemp CBD products:

• Growth: Elemental Pharma has thousands of acres in California, Oregon, and Missouri available for additional growth.
• Extraction: Elemental Pharma has “capacity for tens of thousands of biomass conversion to stable crude”.
• OTC MFG: Elemental Pharma has FDA-approved manufacturing facilities for White Label, Wholesale, OTC, and FDA registered brands, expanding the number of potential distribution channels available to the company.
• Retail: Elemental Pharma sells hemp and CBD through affiliate marketing, direct marketing, social media marketing, SEO, and SEM.
• Rx Drug Mfg: Elemental Pharma manufactures and sells its products through a nationwide whole and retail distribution network. The company plans to sell a CBD drug through a wholly-owned subsidiary pharmacy group called Lakeforest Pharmacy.
• Pharmacy: Elemental Pharma has a large specialty pharmacy network (Lakeforest Pharmacy) with 150 captive marketing channels.

Where Does Elemental Pharma Grow Its Hemp?

Elemental Pharma grows its hemp in Oregon, although the company also claims to own farmland in California and Missouri.

“We use American grown hemp that is cultivated and processed according to the highest industry standards,” explains the recent report on Elemental Pharma. “To produce the most effective final product, only the infest hemp plants meet our standards, growth without pesticides or GMOs.”

Digging deeper, Elemental Pharma seems to have a substantial presence on Orindale Road and Breitenstein Lane, both of which are in the same rural neighborhood just outside of Klamath Falls, Oregon.

Elemental Pharma also has a manufacturing facility in Westlake Village, California.

How Does Elemental Pharma Process and Extract Its Hemp?

For tracking and tracing (i.e. extraction), Elemental Pharma has facilities in California and Oregon with capacity to produce thousands of gallons of crude, leading to thousands of kilograms of isolate and distillate.

How does Elemental Pharma extract its CBD? To extract CBD from the hemp plant, Elemental Pharma uses supercritical CO2 extraction.

This process takes CO2 to a low temperature under high pressure, giving it properties of a liquid and a gas. The, Elemental Pharma extracts only useful cannabinoids, leaving unwanted compounds like THC behind.

Once returned to room temperature, all of the CO2 evaporates, leaving behind only the purest isolates that are completely free of solvents.

“Although it’s expensive, this method is the industry’s best practice for solvent-free extraction,” explains the official Elemental Pharma report.

The end result is 99% pure cannabidiol in the form of a crystalline solid. The crystalline CBD is then formulated by Elemental Pharma’s licensed compounding pharmacist into all of the company’s CBD products.

Elemental Pharma uses high-quality vegetable glycerin and hemp seed oil as a base for all its CBD products.

Elemental Pharma Lab Testing

Here’s how Elemental Pharma explains its lab testing process: “All new components are lab tested throughout the process, and the final products are lab tested for purity and potency.”

Elemental Pharma claims that all tests take place at an independent, third party lab. You can view certain lab test results for B-Well Pharmaceuticals (a wholly owned subsidiary of Elemental Pharma) here. However, those lab test results were prepared for Pur Iso Labs LLC and TerraVida, neither of which are part of the Elemental Pharma family. We have not yet seen a lab test result for Elemental Pharma.

How Does Elemental Pharma Manufacture Its CBD Products?

We know where Elemental Pharma grows and processes its CBD products. However, the actual CBD products themselves are manufactured in a separate facility.

Elemental Pharma has an FDA-registered facility in Nevada with a current capacity to produce 10,000 products per week per location.

Elemental Pharma also claims to have the expansion room to triple the footprint of each location.

Elemental Pharma Retail Sales

Elemental Pharma has detailed plans for its retail sales. First, the company will sell some CBD products through wholly owned subsidiaries like B-Well Pharmaceuticals (the company has eight wholly owned subsidiaries in total).

Second, Elemental Pharma will launch a countertop display program in Q4 2020. That countertop display program will have the following features:

• Elemental Pharma will provide a countertop display case to retailers at no cost
• Products in the display will have an MSRP of $49.99
• There are 12 products in the case (4 SKUs and 3 products per SKU), giving a total sale potential of $600
• The retailer pays a wholesale price of $25 per product
• Retailers can reorder via fax, website, or phone

Elemental Pharma Pharmaceutical Pipeline

One of the unique advantages of Elemental Pharma is that the company claims to be the first CBD company to bring CBD products to market through a pharmaceutical pipeline.

Here are some of the key points to note about Elemental Pharma’s pharmaceutical products:

• The pharmacist employed by Elemental Pharma has 16 years of specialized pharmacy experience
• That pharmacist also has a proven track record of FDA drug registration
• Elemental Pharma plans to form strategic partnerships and alliances
• Elemental Pharma has partnered with Lakeforest Pharmacy, which has 150 sales groups, thousands of active doctors, and nationwide distribution; Lakeforest Pharmacy is also fully licensed, bonded and insured
• Lakeforest Pharmacy earned $6 million in 2018 revenue and was expected to earn $9 million in 2019

Elemental Pharma Investment Opportunity

Elemental Pharma was advertised as an investment opportunity in the latest issue of HempCBD Investor magazine. The company made several key points about itself, including:

• The overall CBD industry is expected to multiply by 4x to 20x throughout 2020
• Elemental Pharma earned $9 to $11 million in revenue in 2019 (both figures are listed at various points in the writeup)
• Elemental Pharma expects to earn $60 million over the next 12 months (i.e. to the end of 2020), regardless of whether the CBD industry grows 4x or 20x
• Elemental Pharma claims to have a current valuation of $200 million, although they expect to grow to a valuation of $1.2 billion (assuming 20x CBD industry growth)

Elemental Pharma Stats and Forecasts

The recent report on Elemental Pharma highlighted several key metrics from the company, including the company’s production from last year (2019) and their forecasted production for this year (2020):

• In 2019, Elemental Pharma had 30 acres of CBD production and harvested 60,000 plants
• In 2020, the company expects to have 250 acres of CBD production and harvest 500,000 plants
• One acre of growth equals $150,000 in revenue, or $110,000 of profit per acre
• Elemental Pharma “will generate $600M+ of cumulative EBITDA in 5 years”

Elemental Pharma Assets and Values

What does Elemental Pharma own? How much is it worth? Here are the assets listed in the Elemental Pharma profile:

• Elemental Pharma currently owns $9.4 million of land ($2.4 million on Orindale Road, Oregon, $5.0 million in Westlake Village, California, and $2.0 million at Breitenstein Lane, Oregon).
• Elemental Pharma has $4.5 million of licenses ($3.0 million with Clearlake Extraction, $0.3 million with Cardinal Manufacturing, $0.1 million with CBD Grow, $0.1 million for alcohol manufacturing, and $1.0 million for transportation and delivery)
• Other assets total up to $15.8 million, including $1.3 million with Formula Books, $2.0 million with other company brands, $0.5 million for the extraction process, and $12.0 million for the pharmacy division

Add up everything and you get a total value of $30 million.

Elemental Pharma Has Eight Wholly Owned Subsidiaries

Elemental Pharma fully owns eight separate companies and brands, including:

• B-Well Development OR LLC
• Oregon AG-Works
• Klamath Extraction Company LLC
• Lakeforest Pharmacy
• Cardinal Manufacturing LLC
• B-Well Development CA LLC
• B-Well Retail
• Elemental Manufacturing

Elemental Pharma Competitive Advantage

Elemental Pharma claims to have several advantages over its competitors, including:

• First to market a CBD company with a pharmaceutical product pipeline
• One of the few “seed to shelf” vertically integrated CBD companies, with Elemental Pharma controlling every stage of production from growth to retail
• Nationwide distribution network in place with presence in the Midwest and on both coasts
• Products are processed in FDA-registered facilities
• Experienced management team with 100+ years of industry experience combined

How Will Elemental Pharma Use Its Investment?

Elemental Pharma is seeking an investment of $20 million. The company would use this money to grow its operations considerably. Here’s how the company would spend the investment:

• 13.5% ($2.7 million) would go to real estate growth and improvements at the Orindale Road, Oregon location
• 12.5% ($2.5 million) for real estate growth and improvements at the Breitenstein Lane, Oregon location
• 15.0% ($3.0 million) to build and improve manufacturing facilities in Westlake Village, California
• 4.0% ($0.8 million) for farming equipment (like threshers)
• 6.0% ($1.2 million) for marketing, website, and promotions for one year
• 7.5% ($1.5 million) for pharmacy acquisitions in 3 to 5 locations
• 13.0% ($2.6 million) for pharmaceutical investments, including FDA registrations and filing
• 13.5% ($2.7 million) for extraction equipment and manufacturing facility improvements
• 15.0% ($3.0 million) of working capital for one year

Elemental Pharma Future Plans and Exit Strategy

Elemental Pharma has an ambitious exit strategy. Here’s how the report details everything:

• Uplisting within one year
• Initial public offering (IPO) within 1 to 2 years
• Acquisition at any time for the right price

What is B-Well Pharmaceuticals?

B-Well Pharmaceuticals is a wholly-owned subsidiary of Elemental Pharma. You can buy B-Well Pharmaceuticals products online at BWellMeds.com.

The company sells a range of CBD products, including:

• CBD foot pain cream
• CBD gel capsules (75mg)
• CBD pain and strain recovery cream
• CBD tinctures (500mg to 3,000mg)
• CBD capsules with melatonin (20mg of CBD)

B-Well Pharmaceuticals claims that the benefits of its CBD products include “pain and inflammation…reduces anxiety…epilepsy and seizures…[and] cancer and tumors”. Many CBD manufacturers avoid listing specific health benefits on their sites, although B-Well Pharmaceuticals doesn’t seem to have a problem.

All B-Well Pharmaceuticals CBD products are lab tested. You can view the company’s lab reports here.

Who’s Behind Elemental Pharma?

Elemental Pharma is led by Michael Peters (Chief Executive Officer), Mark Englander (Chief Financial Officer), Mark Peters (Chief Operating Officer), and Randy Case (Chief Sales Officer). The four men have 15 to 35 years of industry experience apiece.

Elemental Pharma has eight wholly owned subsidiaries. The company’s ownership overall is split between two entities: 50% to Porter Holdings and 50% to TPFT Enterprises.

Final Word

Elemental Pharma is a vertically integrated CBD company seeking a $20 million investment. The company plans to use that investment to expand operations.

Elemental Pharma was featured in the February 2020 issue of HempCBD Investor. Virtually everything we know about the company comes from that article. Early on, everything is presented well but time will tell how big Elemental Pharma's CBD companies grow given the execution required  of the elaborate expansion plans. In addition, the give or take upside of Renovize attracting affiliate representatives to the brand's product line and opportunity will be interesting to see how it plays out.

To learn more about Elemental Pharma, check out the company’s profile here. It starts on page 20 and goes to 108 for those researching more on Elemental Pharma.