Relevium Technologies Inc. (TSX-Venture: RLV) operates in the health and wellness industry with a primary focus on online distribution. Currently, the Company has two subsidiaries in its portfolio focused on different segments of the wellness market.
As a result of an upcoming acquisition, the Company anticipates annual revenues to be in the range of $8 - $10 million. With a total market cap around $4 million, 2020 looks promising for Relevium and its shareholders.
The market for self-directed wellness is staggering. A significant part of the $3.7 trillion global wellness market, the nutraceutical segment is forecast by PMMI Business Intelligence to rise from an already impressive $241 billion in 2019 to a staggering $373 billion by 2025. In the U.S. alone, nutraceutical sales were expected to hit $79 billion in 2019.
Nutraceuticals include vitamins and supplements, as well as functional foods and beverages. The industry has been experiencing tremendous growth for decades with little indication that the momentum is going to slow.
In fact, with consumers suffering from pill fatigue and desperately seeking alternatives to traditional medicines against the backdrop of cannabis legalization sweeping the globe – including expanded uses in Canada now – and hemp becoming federally legal in the U.S., some additional tailwinds might be blowing.
Medical cannabis is being trumpeted for a litany of health benefits stemming from its compounds (called cannabinoids), including non-psychoactive cannabidiol (CBD).
Legal cannabis is part of the business model of Relevium Technologies Inc. that, while diverse (general health, nutraceuticals, fitness nutrition, cosmeceuticals), all fall under the parameters of the overall health and wellness market. The company has dozens of products for sale at some of the world’s biggest retailers, including Walmart.com, eBay and Amazon.com, and is on track to make some significant advances in 2020 thanks to transformational moves it made in 2019.
Like others in the retail space, Relevium is primarily focused on online distribution of its products.
Management prides itself on the ability to identify, evaluate, acquire and operate brands and businesses within the health and wellness markets. To say the company – considering its size ($4 million market cap) – has been ambitious in its growth strategies is putting it mildly.
According to Relevium CEO Aurelio Useche, the company “needed the stretch” to grow and keep up with ever-changing market dynamics.
Currently, Relevium has two subsidiaries in its portfolio in different segments of the wellness market. Rather than try and keep all three directly under the Relevium roof, the company is planning spinouts to unshackle itself from some of the financial burden while still realizing revenues as the majority shareholder of the subsidiaries.
BGX E-Health is a multi-brand company with an extensive line of over-the-counter supplements and skin care products. The company’s product offering includes a cutting-edge line of weight-loss, anti-inflammatory, heart, vision, beauty and fitness supplements sold through the Bioganix®, Push & Pull System® and LeefyLyfe® brands.
Leefy Lyfe is BGX’s OTC cannabidiol Phyto formulated brand combining the same ingredients as those found in Bioganix® and Push & Pull® with the benefits of CBD. The company is awaiting a decision from the FDA before it can launch the CBD products into the market.
A loyal customer base on Amazon helps keep Bioganix® amongst the best-selling products in the Health and Personal Care category. Backed by scientific research and superior quality formulations, Bioganix® has become one of the leading dietary supplement brands online.
With the launch of evidence-based products for the heart (CardiaPro) and for the eyes (VisionPro) last year, the Bioganix line includes 56 different products. In 2019, BGX also launched Aloe Vera products through an agreement with Curaloe and soft-launched Push Pull ‘s first anti-aging system, while Leefy Lyfe, an organic hemp-based line launched two SKUs on Amazon.com.
In order to improve margins and control inventory more efficiently, BGX is moving manufacturing to its hometown of Montreal, Quebec. Management is in the final stages of acquiring a biopharma manufacturing company and has shifted to a locally sourced material supplier, Bio V Pharma. Through a new partnership with Bio V Pharma, management foresees better prices, lower expenses and even higher quality, not to mention increased access to domestic and international markets.
The partnership gives BGX access to 400 NPNs (Natural Product Numbers) with Health Canada, which allows for new product launches in the country. Sales in Canada are targeted to begin later this quarter.
Overseas, the manufacturing agreement immediately was followed by a C$1.0 million purchase order from a Middle East customer.
In the coming quarters, the new revenue and improved margins should have a meaningful impact, but it will be realized differently because Relevium intends to execute a spinout/reverse takeover of BGX E-Health into a stand-alone entity with a listing on the CSE as early as next month. Concurrent with the public listing process, New Scope is working to arrange a funding for BGX to get the company additional growth capital.
To the matter of cash flow, the completion of the acquisition of the biopharma company, anticipated before this quarter ends, is expected to add C$3.5 million - C$5.0 million in additional revenue, bringing total annual revenues for Relevium in the range of C$8.0 million - C$10.0 million.
Through its Biocannabix Health Corporation Inc. (BCX) subsidiary, Relevium focuses on nutraceutical and medical foods products infused with targeted cannabinoid formulations for pediatric and geriatric medical applications. Brands under the BCX umbrella include:
• Cannakids (pediatric brand exclusive for the Canadian market)
• Relevium Senior® (geriatric brand targeting inflammatory conditions including joints, heart and brain)
• Relevium Kids® (pediatric brand of nutraceuticals and oral nutritional supplements)
BCX’s vertically integrated operations are global, with scientific and administrative offices in Montreal, cultivation and extraction operations situated on 20 hectares in Cali, Colombia and a distribution and compliance partnership in Germany (the biggest economy in the European Union).
In Colombia, BCX is conducting a private funding as it completes the acquisition of Lifeline Pharma S.A.S., a Colombian-based cannabis company. Lifeline is in the process of constructing a greenhouse cultivation facility, which is expected to be done during Q1.
In Canada, BCX is in the process of acquiring Weedsense, a late-stage cannabis applicant, with the closing of the transaction expected mid-2020 upon receipt of a sales and processing license from Health Canada.
Relevium fully intends to spin out BCX also, although no timelines have yet been provided.
The spinoffs of BCX and BGX signal the long-term business model coming to fruition for Relevium as it becomes an investing arm (and accelerator of sorts) in the health and wellness industry, using its experience and resources to increase assets of subsidiaries. The model is aligned to unlock additional value through the deployment of profits, albeit acquiring more revenue-generating companies, stock repurchase plans or paying a dividend.
