Regan Saveall, CEO of leading UK CBD company Dragonfly Biosciences, discusses the company and its plans to list on the ASX in August.
Paul Sanger: Today, I’m joined by Regan Saveall, Executive Director and CEO of Dragonfly Biosciences. Dragonfly is a vertically integrated, seed-to-shelf CBD business that trades under the Dragonfly CBD brand. The company owns the entire value chain from their certified organic farms, extraction facilities, and state-of-the-art labs used for producing premium CBD products. Dragonfly is planning to IPO on the ASX in early August. Today, I welcome Regan. Regan, welcome to the network.
Regan Saveall: Thank you.
Paul Sanger: Regan, can we start with telling us a little bit more about the Dragonfly CBD brand?
Regan Saveall: So, Dragonfly, we’ve been around for six years now. We started in 2017 and we hit a few milestones early on. So, we were the very first brand in CBD products in Boots, which is a national pharmacy chain in the UK. Their brand is, you know, second only to the NHS, so it’s a really credible brand and was a great achievement for us. Secondly, we were the first British company that developed a CBD extraction facility specifically for extracting CBD on a large scale, so that was another achievement back in 2020. And our FSA accreditation in the UK and the way that we’ve built the infrastructure of the company has led that we can also deliver compliance and transparency really easily. So, in 2021, we achieved special access scheme approval for two of our products from the TGA in Australia as well. So, we are a credible seed-to-shelf manufacturing company for CBD products, but also predominantly on health and wellness. We want to promote the health and wellness benefits of CBD and what it can bring for consumers.
Paul Sanger: And that accreditation, that is so important for a company like yourselves, given that that accreditation basically opens the doors and helps you grow, yeah?
Regan Saveall: Absolutely. Yeah, it is so important because having the full seed-to-shelf manufacturing process, we can show that our soil is organically accredited. We can show you our independent laboratory certificates that show you there are no contaminants in our product. We believe in high quality every step of our production process. So, for example, our formulation is under EU GMP pharma grade formulation. It’s not required for a food supplement necessarily, but we believe to deliver the best-quality product, that’s what we want to do. And having that certification and that kind of quality at every stage helps with the compliance. So, the FSA thing in the UK, all of the entire range of Dragonfly CBD product is on the public list of approved products for the UK, so that has helped us with the SAS, special access scheme approval in Australia, and that will lead to FDA approval in the US as well as we head towards full TGA approval in Australia.
Paul Sanger: Regan, in respect to Dragonfly, can you give the viewers an idea on what you feel distinguishes the business from its competitors?
Regan Saveall: We’ve been a market leader in the UK and we want to be the market leader in new territories as well where the CBD regulation is clear and concise, and it’s actually really easy to know what you can and can’t do. So, we are not operating in grey markets. We want to be absolutely compliant from day one. And that is a strength because that builds trust for the consumer. In our research that we’ve done, trust in the product that they’re buying is really paramount. So, obviously, trust that they get the CBD they’re buying — you know, there’s some products out there that don’t have the level of CBD as advertised, so it’s important they get that. It’s important that they’re getting a THC-free product, so the certification that we provide for every batch of product that we do shows that there’s zero THC and they’re getting the cannabinoids that they are actually acquiring. But also making sure that they are trusting in the brand that Dragonfly… show the providence and know where it’s coming from. So, we’ve not a company that buys CBD isolate and puts it in an oil and sells the product. We grow our own and it’s organic. You won’t see that organic accreditation on many products because you need to grow your own in order to have that accreditation. So, that’s very important to us, and that distinguishes us from other brands, we feel.
Paul Sanger: Do you have any numbers on what the global CBD market is currently worth and how it’s predicted to grow over the next few years?
Regan Saveall: There is some data out there for the CBD market. The global market for cannabidiol is going to be exceeding US$47bn by 2028. Now, that is a phenomenal number if you think about it, but it’s predominantly broken down with… Asia and the US are the two big markets on there. And what we are seeing is, for Asia, they tend to look to Australia for credible compliant products. So, by virtue of Dragonfly being in Australia, we see that as a little bit of a beachhead into the Asian market. And our approach to the TGA approval process that we are going to do post-IPO will also help the FDA approval. We know that it’s legal in certain states in the US, but it’s obviously not federally legal at the moment. Now, we believe that will come. And us having the UK FSA approval, EU FSA approval and the TGA approval will naturally lend itself to FDA approval as well. So, that market in the US, which is also a big number, is where we are heading.
Paul Sanger: So, Regan, you’re already well positioned in the UK and the Asian markets. When do you expect to crack the US market?
Regan Saveall: I would love to say tomorrow or next month, but I think we’ve got a really good plan. Obviously, it’s not federally legal at the moment, but you can do certain things in certain states, and there are certain non-consumable products that you can launch in the US, and also there are some health and wellness products that you can launch in the US that we are looking to do. So, I’m hoping… Our plan at the moment is to actually start building the Dragonfly CBD brand or Dragonfly Biosciences brand in the US with maybe some non-CBD products first of all to get our brand being… so it’s awareness, it builds that awareness in the US. And then we would hope that, as the CBD becomes more accepted federally, we can then come in with our CBD products that are already developed and just waiting in the wings to go, and really take advantage of that retail distribution that we’ve already achieved through the non-CBD side.
Paul Sanger: Regan, let’s get onto the listing. When is the expected listing date on the ASX, and can you share any details of the listing with us?
Regan Saveall: Yes. So, the listing is slated for about 1 August. We’re keeping our fingers crossed that that’s going to be achieved. Hugely exciting time for Dragonfly to be on the ASX. You know, it’s a great opportunity for many reasons, launching our products into Australia this year following that and obviously how that would lead into Asia and the US. You know, really big opportunities, so we’re really excited.
Paul Sanger: And, just quickly, how much are you looking to raise? Is there a range or a fixed amount?
Regan Saveall: Yes, sorry, there’s a range. So, $3m is the minimum, and $5m is the maximum. We’re predominantly going to be using that for sales and marketing and new product development. The company is effectively built. You know, we’ve got all the infrastructure, we’ve got our land, extraction facility, formulation, packaging, our retail distribution, we’ve got our licences, and all the regulatory requirements are all in place and we are ready to go. It’s just leveraging that now for future sales and marketing to build the revenue, not just for the new products but also in new territories.
Paul Sanger: Regan, let’s talk about the leadership team’s experience and the make-up of your board.
Regan Saveall: So, currently, the executive board is myself as the CEO, and then we have Radost Draganova and Chris Wronski. Now, Radost and Chris are the two founders of the company originally. So, Radost runs the cultivation and the formulation and some of the R&D in Sophia in Bulgaria, so she’s a key member of the operations team and crucial to the running of that team. Chris is more on the investment side, has been closely involved in building the company, and also having some ideas on where we’re going with product development, so he’s involved in that. On the non-exec side, we have Julian Karadjov. He’s a pharmacist and scientist, knows a lot about CBD and the benefits that brings to consumers. And then we have Dale Klynhout and Warren Goward, who are Australian non-exec directors, who are helping us on the capital markets, and they’re very well experienced on that side of things. So, we have a split between operational and non-exec and capital markets.
In terms of experience in CBD… So, in 2016, there wasn’t a market. You know, there was no one… We couldn’t… “Let’s bring someone in who’s got 10 years experience.” There wasn’t anyone that existed, actually. So, there was some in the Canadian market, there was some expertise there, but even that had only been going a few years by that time. So, a lot of it has been through tried and tested, making mistakes for sure, but we’ve got to a really good knowledge base now and know-how over the last six years of building the company. So, the experience has been born through hardship and hard graft — blood, sweat and tears, as someone once said.
Paul Sanger: Regan, all new companies have risk for investors. What do you see as the major risks and challenges for Dragonfly?
Regan Saveall: So, yes, naturally there are risks in any business. I guess regulatory risk in a cannabis-related business is always high on the agenda. But I just want to distinguish CBD from medicinal cannabis, because medicinal cannabis is obviously very highly regulated. It has to be. You know, it’s a psychoactive compound, and there’s a black market there. So, there are strict protocols that need to be put in place for medicinal cannabis. And, admittedly, that’s quite right. Whereas we are a health and wellness business. We’re going for a completely different market. We are not necessarily for patients. We are here for the general public that want a health and wellness benefit from consuming CBD. But also it might be a topical, you know, it might be a skin patch — it’s not necessarily always already consumed CBD. So, the risks that we have… You know, ours is a natural product. There might be regulatory risks in certain markets, certain territories, that might change their view on CBD, but what we are finding, actually, this is relaxing, not hardening.
You know, we’ve seen it in the UK, it’s been in place since 2018. You can go into any pharmacy or supermarket and buy CBD off the shelf. And we are seeing, you know, Australia in February ’21 when it down-scheduled CBD, you can now get it on prescription. We see that going to retail eventually as well. And so, there is a general relaxing of regulation. So, actually, you could say that is actually bettering the industry rather than betting against it. But it’s always a risk, and we have to be aware of that.
Paul Sanger: And to close things up today, if any of our viewers want to participate in the IPO, how do they get involved?
Regan Saveall: So, the first place I would go is to the Finexia website, so that’s at finexia.com.au/Dragonfly. There’s all the details of the listing processes is there and our prospectus is there to be downloaded. And there’s some frequently asked questions on there as well, if there’s anything further they want to find out.
Paul Sanger: And, obviously, if you’re hoping to list on 1 August, are the books closing in the near future?
Regan Saveall: Yes. 20 July is when we are hoping to close the books, and then there’ll be a few days of administration. But 1 August is our planned date.
Paul Sanger: Regan Saveall, it’s been an absolute pleasure and we wish you the best of luck, and we look forward to this thing hopefully very soon.
Regan Saveall: Thank you very much for having me. It’s been a pleasure.
Paul Sanger: Thank you.
Regan Saveall: Thank you.