XPO2 and PotNetwork forge strategic partnership

By @chelean on
Cannabis
A man shreds marijuana during the 4th Marijuana Festival outside the Senate building in Mexico City December 20, 2012. Reuters/Tomas Bravo

Cannabis industry leader PotNetwork Holding, Inc. recently announced that its unit that sells premium cannabidiol (CBD) products has strengthened its e-commerce venture through a strategic partnership with cause-related tech marketing firm Exponential, Inc.

In a statement dated March 5, PotNetwork Holding, Inc. (OTCMKTS:POTN) said that  Diamond CBD, Inc., its wholly-owned subsidiary, has inked a deal with XPO2 that will bind the tech firm as Diamond CBD’s exclusive affinity marketing company. The company has generated millions with its top-of-the-line products, as evident from its stellar 2017 market performance and continued tremendous revenue growth this year.

The company recently announced the release of audited consolidated financial statements reporting 2017 sales of US$14.5 million (AU$18.71 million), with gross profits of US$5,180,865 (AU$6,684,760), and, despite making large reinvestments in its future growth, the Company showed positive net income of US$178,918 (AU$230,854). The full report can be seen at otcmarkets.com.

This pact will help Diamond CBD bring all 18 of its high-quality products to a wider consumer base through XPO2’s extensive network of online merchants. Its partner-merchants include major players in e-commerce such as Best Buy, Walmart, eBay, Groupon, Macy's, Skechers, Nike, and Staples among other front-end online retail platforms.

"This new commercial partnership with XPO2 represents a major milestone for our Company," Richard Goulding, CEO of PotNetwork, said in the statement.

Key players in cannabis and e-commerce

Based in Fort Lauderdale, Florida, PotNetwork Holding is a CBD product focused holding company that owns and operates six subsidiaries that are all engaged in various sub-segments of the industry. Diamond CBD, the main revenue driver for PotNetwork, serves as the selling arm of the holding company. More importantly, it also engages in research and development activities on CBD therapies.

With hemp industry pioneers and natural product experts, chemists, doctors and scientists behind it, Diamond CBD continuously explores ways to produce only the finest and purest cannabidiol (CBD) oils — making way for a large selection of CBD products such as tinctures, edibles, and vape liquids found anywhere.

Meanwhile, XPO2, founded by current CEO Dom Einhorn is focused on linking partner organisations like PotNetwork Holding, Inc. with new marketing opportunities. The technology marketing company focuses on developing and promoting a white-label e-commerce platform, which apportions revenues to fundraising purposes for charities and non-profit groups across the globe.

Through XPO2’s affinity marketing platform, donors and supporters of the merchants do not only gain access to exclusive discounts granted to members which eventually translate to savings. Members also help in raising funds for their preferred cause with every purchase at XPO2. All this, without any payment required from charity groups and non-government organisations.

The recently formed partnership is expected to put the two firms at a competitive and mutual advantage in their respective industries in which they are gaining a foothold. At the end of the day, the synergistic deal is a win-win solution for both firms.

Expansion of e-commerce presence for PotNetwork

The strategic move is PotNetwork’s response to the rapidly widening online shopping market. According to an analysis by Research and Markets, the global e-commerce market is expected to reach US$44.33 trillion (AU$18.71 trillion) by 2022. This translates to a 95.29 percent jump from the US$22.70 trillion (AU$29.29 trillion) in 2016. The report added that this growing e-commerce trend will take over, with the largest of its markets such as the United States, China and the United Kingdom, boosting its activities online. Meanwhile, based on the economic growth reflected in the Asia Pacific, the region is projected to be the largest market in terms of online sales.

The report generally cited rising purchasing powers of people as the main driver in online sales growth. It added that the expansion of working women who do not have enough time to physically shop is now given a time-saving option online.

“The global e-commerce market is highly competitive because of the presence of many large established players,” the report notes.

As such, XPO2’s wide network of merchant partners positions the firm as a good partner for any industry leader across the board. Among XPO2’s major affinity group partners are United Pro Soccer League, which represents more than 140 teams, and the Los Angeles Jr. Kings Hockey Club, in addition to other organisations and charity groups spread across Australia and the United States.

PotNetwork’s Goulding said the company will definitely benefit from XPO2’s wide range of partners. He said that aside from these currently on the list, it gets more exciting for the company as the white label e-commerce marketer anticipates more deals with possibly several hundred more groups. These partners will also launch customised XPO2 platforms in the next 12 to 18 months.

"This program will enable us to reach totally new consumer market segments centered in affinity marketing, and we are confident that consumers who use such affinity marketing programs will discover the exceptional value and effectiveness of our ever-expanding product line,” Goulding said.

In addition to a vaster reach of consumers, and an altogether new one from PotNetwork’s usual target audience, the Florida-based firm sees itself benefiting from the “Daily Deals” email engine that powers the e-commerce platform. As it gathers the best available deals offered by partner merchants, the daily deals email engine reminds members and supporters to purchase from their favourite sellers while supporting an affinity organisation. These notifications are sent to each affinity group's supporter base either every weekday or weekly through a digest.

“We believe Diamond CBD’s will thrive even further as a result of this initiative.”

XPO2 Helping to Lead the CBD Revolution

On its end, XPO2 will bask in the benefits of getting involved in the bullish cannabis market that, in itself, excites several investors worldwide, through an industry leader with proven results.

Citing a study jointly conducted by the ArcView Market Research and its research partner BDS Analytics, Forbes reports that the legal cannabis industry is set to reach US$57 billion (AU$73.55 billion) by 2027. The recreational market will account for the lion’s share in spending while the medical sub-segment will represent the 33 percent.

The report said that although North America will prevail as the top market for legal cannabis, the largest growth will be distributed across the world. This forecast stands despite barriers from the United Nations’ 1961 Single Convention on Narcotic Drugs.

However, the projections are based on ArcView's and BDS' beliefs that legal obstacles may ease if the United States does it share, a likely event after the presidential elections in 2020. But even without the full-blown eradication of strict regulations hounding the cannabis market, the legal cannabis industry has welcomed baby steps that led to easing the business environment toward an investor-friendlier approach.

It is worth noting that PotNetwork is an exemption of all these regulations, exactly why it has gained a favourite among several cannabis investors. Its CBD products, being derived from foreign-grown hemp plants which lack the THC concentration that makes its users high. These are not subject to the same hurdles as some cannabis plants containing THC concentrations, like marijuana, face, nor do these violate rules on growing cannabis in the US. All its products are available and legal in the 50 states of America.

What makes it an industry leader in the emerging CBD revolution is its dedication to making the best quality CBD products available in the vast market. All its products are 100 percent natural CBD manufactured from trusted, high-quality hemp and the most advanced extraction processes available for CBD. In addition, several scientific studies and clinical trials have found hemp-sourced CBD effective in alleviating several forms of pain and anxiety disorders.

Einhorn, founder and CEO of Exponential, Inc. has recognised that the rapid expansion of the cannabis industry as a whole, as well as PotNetwork’s significant role in it, will put them at an advantage of being seen in a different light. He lauded the growing consumer appetite for CBD and related products and cited this as another important booster for XPO2.

“We are confident that Diamond CBD's unique inventory of products will resonate with our consumers,” Einhorn added.

Diamond CBD strives to add new lines of products for specific markets to make its offering more compelling to customers. It has the Meds Biotech pharmacist-formulated line for health-conscious people and its pet product line which consists of medications and food created for dogs and cats.

These pet-dedicated CBD products—one-of-a-kind in the industry—are designed to help pets feel more relaxed as they help with their aggression disorders, self-trauma, cognitive problems, excessive vocalisation, and urination/marking problems. The pet product line offers various flavours and caters to small, medium or large dogs.

All in all, the deal creates a synergistic relationship where the two firms can explore new environments where their products can thrive in.

With an advancing leader in the CBD industry on one hand and a unique and well-connected cause-driven e-commerce platform on the other, the partnership will position the two firms a step further toward progress. They are able to benefit from each other’s strengths to improve and expand their businesses further while giving back to society at the same time.

Article from press releases sent for consideration.