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INTERview





Daniel Stoops, founder of Danodan Hempworks talks about being an Organic and Whole Plant focused Hemp Company in a CBD-focused Marketplace


Daniel Stoops

Founder & Co-CEO


Danodan Hempworks

https://danodan.com/


Contact:

Daniel Stoops

503-290-4079

daniel@danodan.com


Interview conducted by:

Lynn Fosse, Senior Editor

CEOCFO Magazine


Published – August 23, 2021

CEOCFO: Mr. Stoops, what is the overall vision behind Danodan Hempworks?

Mr. Stoops: We are not a CBD company. That is the first thing I would say about Danodan Hempworks. We are a whole plant company. Hemp has over 500 constituents and compounds, and counting, and honestly, our mission is to give people as many of them as possible in our products. We do not focus solely on CBD.


We are an organic company as well, so we have to source organic hemp and work with those farmers that practice regenerative farming methods, that are helping the planet, helping us solve our global warming crisis, or trying to at least. All of these things are in our mission, ultimately. We are a true whole plant company and we produce naturally water-soluble, ingestible hemp tinctures.

 

CEOCFO: Would you tell us what water-soluble hemp means and why that is important?    

Mr. Stoops: Water soluble, of course, is whether something is soluble in water. The majority of hemp and CBD tinctures with CBD in them are in a plant-based oil, whether it is MCT-coconut derived oil, sunflower oil, or hemp seed oil, etc. We are on the opposite end. We are not a plant-based oil. We work with glycerin.


We literally soak hemp flower only in glycerin and run a process over a number of weeks, using some heating and cooling steps, and the glycerin is infused with the hemp at the end if the process. It is ultimately an infusion process that we employ. Glycerin is water-soluble, so we have a naturally water-soluble product. What that means, of course, is that it goes into beverage really well.


The second thing is that we have a better absorbency rate, a faster uptake rate for our products and anecdotally, we are far more effective than many of our competitors.   


CEOCFO: How did you get to this point where you had an interest in organic, in plant-based and in hemp?

Mr. Stoops: I have always had a whole-plant, whole food set of values, instinctively, being honest. I am not a studied nutritionist, by any stretch. I come into the industry really drawn to natural things and it being straightforward, at a certain level, with the least amount of processing. How whole can a product be that you deliver to a customer. That was attractive to me. In 2011, I brought that ethos and that set of values and interests to cannabis extracts. Alcohol was certainly something that I looked at. It is used on a wholesale level at this point. Alcohol is probably the number one extractant solvent in cannabis and hemp; CO2 being a close second. And glycerin is a solvent, but not commonly used commercially or at any sort of scale. We are not familiar with anyone doing what we are doing.


I was playing around with all of the extractants, and glycerin was just very attractive to me. The taste was fantastic. The effects were very soft and edge free. Cannabis can deliver some edge, some anxiousness and in some cases, of course, paranoia and glycerin tinctures are really a great solution for folks that are prone to those adverse effects. The word we use is edge-free. There is just a really nice softness to glycerin and a taste and affect that made a beverage very attractive to me. Working with plant-based oils, they can be a solvent and you can extract into them as well.


CEOCFO: Does the world want a whole plant hemp product? Do they care? Why should they care? Why does it make a difference?

Mr. Stoops: Ultimately, I think that it makes a difference, but you make a very valid point; that the marketplace is focused in the three letters, CBD. By and large, the majority of hemp derived products being ingested are isolated CBD in a plant-based oil. At 99.9 percent CBD, the plant is non-existent (in Isolate). You cannot call that a hemp extract, if we are being honest. The focus is very much on the three letters.


It is our job to educate the marketplace about the value of the whole plant. The entourage effect is very real in cannabis where all of the constituents have value, not just CBD or THC or any of the well-known cannabinoids. Your flavonoids and phytochemicals and terpenes have value. Again, cannabis is a very diverse plant and has a lot of constituents and they all play in what we call the entourage affect; a well-known phenomenon of hemp and cannabis and we deliver on that because we deliver much more than CBD. Scientific studies do show that it is more efficacious and isolated CBD is not as effective. Again, it just comes down to education.


The one last comparison I would make is vitamins. It is also well known that getting our vitamins from the foods that we eat instead of with synthesized and isolated pills, is much more beneficial. That has also been well established. We are no different in the argument that we are trying to make.   


CEOCFO: How do you get your story across? How will you be working on it as time goes on?

Mr. Stoops: It is a social media centric campaign. It is also sales people having conversations with people that are deciding whether to bring a product into a store or not. It is dialog driven, at the end of the day, whether that is an Instagram or Facebook post or whether it is a conversation on the phone. We purchase a lot of social media ads to drive people to our website to learn about us. One of our main channels is to purchase directly off of our website and that is the best education opportunity that we have.   


CEOCFO: What do people find when they try your product?  How quickly do people see a difference? Are they surprised?

Mr. Stoops: That is a great question, too. The reaction is very commonly, “What on earth do you guys do? I have yet to experience something as effective as your product. I have been using an isolated CBD by “Jones company” or whatever, and I have tried your stuff and it was far more effective! I felt far more relaxed, at ease, my inflammation was better, etc.” Whatever the issues that they are addressing, they by and large find our product much more affective, and they let us know. We have many testimonials and emails directed to us saying, “I want to let you know that your product is really helping me.” In fact, some of the testimonials are just staggering! What our product is doing for people; it feels really good to make something that is that affective and helpful for people.  


CEOCFO: Is the fact that every drug store and every supermarket seem to have some products in the overall category helpful for you or does that distract from what is a real quality product like yours?  

Mr. Stoops: It distracts you. There is just a giant saturation of brands, that are plant-based oils and isolated CBD or distillate of CBD, with a little more spectrum, a little more presence of additional plant compounds, but not much. Again, those products are in convenience stores, they are at gas stations, they are at high end groceries and everything in between. Therefore, our job is to get a place on the shelf, because we are different, because we are unique and highly effective.


The (CBD)category is present in the store and that is helpful for us. What is not helpful is the customers, and really the store buyers, focus almost exclusively on CBD. How many milligrams, what is the pricing and really, asking us to play and compete at a price level. That is not a place we want to be. Not a place any company wants to be. To compete on price is not what our product is about. It is about the higher end and it is our job to make the argument that our products are unique and valuable. We are not going to be the cheapest.   


CEOCFO: What are you doing in the research arena today? How do you decide what to look at, what to research and where you might go as you continue to grow and move forward?

Mr. Stoops: That is a good question. Our R&D is beverage focused, by and large, because we are water-soluble, because we go so well into a drink, RTD; Ready To Drink cans and bottled beverages are an obvious place for us to have development going on. That is the first and highest priority for us, I would say. There are other products that we are considering. Mouthwash is actually something that we to think about. We are not putting much resource to it, being honest, right now. However, it is actually a very big market.


People do not realize that the mouthwash market is in the billions. And hemp, and cannabis in general, are antimicrobial and antibacterial. They have many properties that work towards fighting bacteria. And Capsules; not really R&D, but it is another form factor that we are considering. That rounds out our road map right now, with beverage being the highest priority and we think that is the one with the most revenue possibility.


CEOCFO: What products that you have available today are getting the most attention? What is not getting the attention that you would expect?

Mr. Stoops: The best seller is our highest potency. Again, we’re back to how many milligrams. People are focused on getting as many as they can, so our best seller is our highest potency product, for sure. I don’t think I am surprised by that. I wish all of our products sold well, but I understand the dynamics of the market and the focus on how many milligrams of CBD one is purchasing. I can see why they are buying our most potent(products). However, our base product is not boosted. It is simply the glycerin and the hemp. Those are the two ingredients. It is a lower dose, but it is really affective stuff. It also has a taste profile, which is a little bit more pleasant. We have a percentage of alcohol, about 25% alcohol in our boosted potencies, so the flavor profile is distinctly different than our base product. Ultimately, I am not surprised by which one is our leading seller.    


CEOCFO: How do you help a customer who does not really know what they are doing or what they are looking for without giving advice?

Mr. Stoops: We are careful not to make any claims. That is a big no-no in supplements, as your audience probably knows. We do not say, “This will cure,” or “This is going to relieve your anxiety.” That is a sentence we do not get to use either. We use terms like, “Help your body feel good.” This is the softer language lexicon that we employ.    


CEOCFO: Do you see at some point licensing the technology or white labelling or is it too early for that?

Mr. Stoops: Currently we do white label quite a bit, and have been for a couple years. We’ve got a number of white label clients. Sometimes we just sell bulk and they do the bottling and labelling themselves. More often than not, we are doing the bottling and labeling and shipping out to them. We can work it both ways.


We also have some beverage manufacturers that are making hemp infused beverages and our product is the input that goes into their beverage. That is another revenue channel for us.


CEOCFO: Are you seeking partnerships, funding or investment as you move forward?

Mr. Stoops: We absolutely are, yes! We are in a current fundraising campaign and looking for partnership and collaboration. Absolutely.


CEOCFO: What have you learned since you have started the Danodan Hempworks that may have surprised you?  

Mr. Stoops: That is another good question. Business is hard. I think that most of us would admit that. However, hemp and cannabis are on a magnitude of difficulty, more so. If you are a THC regulated company in a state that has adult use, you have a myriad of rules that you must follow. Compliance is a tall order in that world. And in hemp and CBD, we have less rules, but we face restrictions. The FDA will not move forward on guidance. Banking, credit card processing; these are all issues for companies. Social media, Instagram, Google, Facebook, Pinterest; all are enforcing policy guidelines that are very hard to work with, being honest. These are obstacles that are real for hemp and cannabis, that are not, of course, something that a coffee company or a shoe company or any number of different product companies have to confront.


What I have learned is that this is a tough business and it is not for the faint of heart!    


CEOCFO: It is such a crowded field with so much misinformation and, frankly, junk information or deliberate misinformation. How does Danodan come through to both customers and investors as the real thing?  

Mr. Stoops: First of all, we are. The product really speaks for itself. When you see the process and how it is made, it is clear what we are doing.


I have to say, is that it is also imperative to not be undercapitalized. In this world and in this particular industry, we must have the resources to market ourselves and to educate the marketplace and consumers about us. Therefore, you just must have the resources to put into social media, to PR, to get that word out, it takes money.


I can certainly say, and your readers certainly can understand this, that it is a very saturated industry at this point. It did not take long for that to happen, but again, the ethos around natural foods and the nutritional foods industry, I think will come into play around hemp and cannabis. The value of true whole-plant, intact, as whole as can be, minimal processing, certified organic as well, how the hemp is grown; Food companies that have these values are showing the best revenue performance and have been for the last ten or fifteen years. I think that hemp and cannabis companies that have these values are also going to be increasing their revenues in the coming years.


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“We are not a CBD company. That is the first thing I would say about Danodan Hempworks. We are a whole plant company. Hemp has over 500 constituents and compounds, and counting, and honestly, our mission is to give people as many of them as possible in our products. We do not focus solely on CBD.”
Daniel Stoops


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