March 4, 2020
Over the past year, we have seen a lot of changes at Alternate Health. The Company closed the largest acquisition in our history, refined our exclusive CBD strategy and made huge strides towards sustainable profitability. As Alternate Health prepares for the next chapter, we’d like to answer some questions from our shareholders.
Shareholder Q & A - March 2020
The following is a general overview of the most common questions we have received lately in a Q and A format. If you have any further questions, please don’t hesitate to reach out to us at our new, investor-focused email – firstname.lastname@example.org.
Where is Alternate Health headed in 2019?
Last May, Alternate Health announced our exclusive focus on hemp-derived CBD product manufacturing and distribution. The Company’s roots have always been in the medical side of the cannabis industry, so we felt this was a natural move for us. Over the company’s history, we have developed relationships with thousands of doctors and tens of thousands of patients. The only missing piece has been monetization.
Alternate Health is certain that medical-focused CBD products are the solution. Building on our history as a software provider, we have are implementing a new model for doctor-driven distribution. Many doctors, and especially cannabis clinics, struggle with securing predictable revenues. Alternate Health can help by offering a complete direct physician-to-patient CBD product distribution system, powered by our software.
The model is simple: We provide doctors with the software they need to dispense to their patients. In addition to our Electronic Health Records and Patient Management System, the Company offers point-of-sale, credit card processing and payment terminals. Doctors receive product samples for patients to test and, after each sale, Alternate Health drop-ships products directly to the patient.
Alternate Health has a huge advantage in this space. In addition to our existing networks, our subsidiary Blaine Labs has a network of more than 10,000 patients. And Blaine Labs’ status as an FDA-licensed pharmaceutical manufacturer gives us the credibility to and authority to produce CBD products that doctors can be confident in recommending.
Why did Alternate Health decide to focus exclusively on hemp and CBD?
In the short term, investing in the medical CBD industry poses far fewer legal risks than recreational cannabis, or even medical marijuana. CBD’s federal legalization following the 2018 Farm Bill creates a much more favourable marketplace. Too often, Alternate Health was told one thing by regulators, only to have the same rule changed the next week.
While the short-term benefits of are obvious, the Company is most interested in the long-term opportunities in medical CBD. Here are just a few of the exciting reasons why:
Health and Wellness: The CBD industry is driven by a desire for people to feel better and healthier. Unlike recreational cannabis, public interest in CBD is focused on improving overall wellness. Society has never been so health-conscious, and we only see more opportunities for growth as CBD becomes more understood.
Price Stability: It is hard to forecast the price of CBD isolates and distillates in the future, so we could need margins significantly fall. We believe medical CBD products will maintain greater margins as patients are willing to pay a premium for products that actually work.
CBD Pharmaceuticals: While it’s just beginning, there is a huge opportunity for CBD in pharmaceuticals and prescription-based treatments. We are interested in the potential for insurance-reimbursable CBD treatments in the future.
How significant is the Blaine Labs acquisition for Alternate Health?
Alternate Health closed the acquisition of Blaine Labs in June 2019. Since then, Blaine Labs has been a key revenue driver for the Company. Since the acquisition, Alternate Health has made strong steps towards driving efficiencies towards profitability and Blaine Labs has been an important part of this process.
Yet, what we are most excited about is Blaine Labs’ potential for the future. This potential goes beyond FDA-licensing and cGMP certification. We’re just as excited by the Blaine Labs’ production capacity, physician-formulated product line and networks. But most of all, we see the extreme value in the experience and efficiency of the Blaine Labs team.
Our strategy of doctor-driven distribution fits perfectly with Blaine Labs’ business model. The staff and team have decades of experience in handling exactly the type of production and shipping logistics we are employing at Alternate Health. We are seeing a seamless transition as we move forward with CBD production and we are confident we have the resources and expertise to scale quickly.
How does the company’s software systems fit into the strategy?
Alternate Health’s software systems are at the heart of the Company’s doctor-driven distribution model. By integrating our Electronic Medical Records platform with our payment, point-of-sale and blockchain-powered inventory software, we offer doctors a complete system for CBD product distribution. Rather than generating revenue through software subscriptions, our technology facilitates sales of our products.
Our software products integrate into a complete system, but each one can be used separately as well. In our doctor-driven model, doctors are free to choose the software products that fit best with their own practice. If they already have an EMR they know and love, no problem. They can continue to use it, while we still deploy our point-of-sale systems.
See the full Q & A at: https://alternatehealth.com/news/