Nejc Rusjan, the founder and CEO of Essentia Pura, a distinguished Slovenian biotechnological enterprise, elucidates his journey in establishing one of Europe's most esteemed manufacturers in the realm of CBD white label and private label production.

This dialogue delves into the intricacies of the hemp industry, wherein he highlights the critical necessity for infrastructure development rather than merely peddling products.

Rusjan articulates the pivotal role of supercritical CO2 extraction and adherence to pharmaceutical-grade manufacturing standards, emphasizing that Essentia Pura is not merely reacting to market trends but is, in fact, setting a benchmark for compliant and scientifically validated cannabinoid production at scale.

Throughout this discourse, we explore the nuances of navigating the European CBD market, the challenges inherent in sourcing manufacturers, and the essential criteria that brands should consider when launching quality CBD products.

Ultimately, Rusjan's insights serve as a beacon for aspiring entrepreneurs within the hemp industry, advocating for a steadfast commitment to quality and consistency as the foundation for long-term success.

The dialogue unfolds with Tyler Hoff engaging Nejc Rusjan, the founder and CEO of Essentia Pura, in a comprehensive exploration of the burgeoning European CBD industry. Rusjan articulates his motivations stemming from a childhood steeped in entrepreneurial influence, particularly inspired by his father's ventures.

The conversation deftly traverses the landscape of CBD manufacturing, highlighting the distinctive practices that set Essentia Pura apart from the myriad of competitors.

Emphasizing the company's commitment to pharmaceutical-grade manufacturing and supercritical CO2 extraction, Rusjan elucidates how these methods ensure product consistency and purity, vital attributes that underpin consumer trust in an industry often plagued by substandard products.

The discussion further delves into the regulatory complexities within the European market, where Rusjan shares insights on compliance challenges that brands face and the importance of aligning manufacturing practices with stringent regulatory standards.

As the episode unfolds, listeners gain valuable knowledge on the critical considerations for brands seeking to establish themselves in the CBD space, including the significance of building long-term relationships with manufacturers and prioritizing quality over cost in sourcing decisions.

Takeaways:

• Nejc Rusjan's journey into the CBD industry began with a desire to bridge the quality gap in cannabis products in Europe.
• Essentia Pura employs supercritical CO2 extraction methods to ensure product consistency and purity, vital for building customer trust.
• The European CBD market is evolving, with a shift towards sophisticated botanical formulations that integrate multiple cannabinoids.
• Startups must prioritize product quality over cost-cutting to establish a reputable brand in the competitive CBD landscape.
• Essentia Pura's approach to manufacturing adheres to pharmaceutical-grade standards, reflecting a commitment to quality and compliance.
• The importance of maintaining long-term relationships with suppliers cannot be overstated, as it directly affects product consistency and brand reputation.

Links referenced in this episode:

• essentiapura.com
• HempAware.com

Companies mentioned in this episode:

• Essentia Pura
• HempAware

The hemp industry is full of people selling products.

Very few are actually building the infrastructure behind them.

And my next guest is one of those rare operators.

Nades Rusian is the founder and CEO of Essentia Pura, a Slovenian biotech hemp company that's quietly become one of Europe's most trusted white label and private label CBD manufacturers.

Built on supercritical CO2 extraction, pharmaceutical grade manufacturing standards and a team of actual scientists.

Essentia Pure isn't chasing trends.

They're setting the bar for what compliant, consistent, science backed cannabinoid hemp production actually looks like at scale.

We're going to dig into the European market, what brands get wrong when sourcing manufacturers, and what it really takes to build a CBD product worth putting your name on.

Nate, welcome to Hemp Aware Radio.

Glad to have you here.

Thanks Tyler.

Pleased to be here.

Awesome.

So to kind of get our audience acquainted with your background and kind of what led you up to creating this amazing CBD extraction company.

Before we get into that, can you tell me a little bit about your childhood and do you remember maybe some influences as a young human being that were kind of planted in your mind like that led you or kind of were precursors to you actually becoming an entrepreneur and working with hemp?

Sure.

So I was born and raised on in the western part of Slovenia, which is central Europe.

Was doing lots of sports during my primary school and high school.

But my dad was also entrepreneur and I think I liked his lifestyle or way of doing having the entrepreneurial freedom and his mindset and building actually something if I used this wording with bare hands.

So yeah, I wanted to follow that path as well.

Had already some high school business ideas from sales to, to marketing.

And then I decided to pursue my degree in, in economics, business and administration, so to say.

And yeah, after, after working in consulting for a while, I decided to take my own path and founded the company which is called the Santia Pura.

Nice man.

So your dad had a big influence on your entrepreneurial journey and studying economics and you kind of wanted to follow in his footsteps or live a similar life style that he was able to live.

Yeah, I mean he influenced me a bit.

Yeah, for, for sure.

So also then here is a very strong entrepreneurial community, not so startup, but maybe some, some, some people would call it all boring business models, but which still, which still work.

So yeah.

Nice.

You're in Slovenia, you discover what cannabin people around you and you decide to build a company around this idea of helping people with this compound.

Like what was that moment actually like for you when you discovered the power of, of hemp and, and CBD?

Yeah, sure.

So it's a standard of a supplement or wellness industry.

And what caught my attention first was seeing people around me genuinely benefit from cannabinids and they got better sleep, reduced stress, improved recovery and overall well being.

Nothing, nothing magical or unrealistic, but enough to realize there was something real there.

So at the same time I noticed a massive gap between the potential of the plant itself, the hemp plant, and the professionalism of the industry.

And as many products were inconsistent, purely formulated, lacked documentation or they were being manufactured without serious quality systems behind them.

And that's really where the idea for essentia pura started, particularly within the specialization targeting CBD segment.

So I didn't just see, so to say the opportunity to sell cbd, it was an opportunity which was a very of interest to me to build infrastructure around it properly and like from manufacturing, formulation compliance, long term partnerships which are crucial and at the end quality control obviously.

So bringing a more serious nutraceutical and pharmaceutical mindset as you mentioned in the beginning, into an industry that was still very immature at the same time for sure.

So are you saying you saw the gap in the market because of the quality of the products that people were getting, just didn't have the standards that you believed could be met.

And so you, you went with manufacturing because of that, because I mean you could have gone into retail sales, you could have done consulting for people that were manufacturing, but you decided no, I'm going to take this on and I'm going to do it myself.

Like, can you kind of walk me through that thought process and why you went with that direction?

Yeah, firstly was mainly on the, on the personal preference because I wanted to build something myself, have a, have a production, have a manufacturing facility.

And on the other hand that I wasn't, I mean I like my, my expert of my expertise didn't lie really in marketing, e commerce businesses.

It laid more on establishing a team like for manufacturing.

And on the other hand was B2B sales.

Okay, we could have done B2C brand as well, but we decided not to do so.

So we won't we're not, we don't do not compete with our clients which are B2C brands E Commerces right people behind the brand.

So that kind of leads into my curiosity of this idea of CO2 extraction.

Super critical CO2 extraction and you know, for the brand owner listening who just wants a really good quality clean product.

Why does this extraction method actually matter to them and to their customers?

Yeah, so I think that the extraction matters because it directly affects affects consistency, purity and then the final cannabinoid interpin profile of the product.

Supercritical CO2 extraction particularly gives a very, gives us a very controlled process.

It allows us to selectively extract compounds while avoiding residual solvents and preserving more of the plant's natural profile.

Most consumers will never ask what the extraction method was used if we are, if we are honest here.

But they absolutely notice when product filling consistent from batch to batch.

And for a brand owner or our clients, consistency is everything.

And if one bottle works differently than the next one, then the their customers or consumer trust can disappear very quickly.

So the extraction method is basically part of the foundation here.

And if the raw extract is inconsistent, everything built on top of it becomes harder to control later in the formulation and the production.

That makes a lot of sense.

Yeah.

Right.

Discussed previously about the inconsistency as well.

So actually many brand established brands on the market turn to us or other companies using similar similar extraction methods that we do mainly because of the inconsistency of the product.

So that consistency leads to reliability and trust and ultimately helps you keep a solid customer base that can rely on you for that consistency and, and quality essentially.

Yeah, because then we get a higher retention rate from our clients and the clients of our clients or the end consumers are also benefit also benefit from this.

Exactly.

So you're manufacturing to ISO GMP like FDA standards in a market flooded with low quality cbd.

Like how big of a problem is compliance actually?

And what should a brand be asking a manufacturer before they ever sign a contract and work with them?

I think that compliance is a little bit bigger issue than most of people would realize.

Particularly the CBD industry still has a reputation problem because too many companies launched products before building proper systems that we discussed before behind them.

And a lot of brands only ask about the price and potency and that's it.

But here there are some other smarter questions I would use then asking for the price and quality like asking for a specific coas, checking to ensure the batch to batch consistencies, trying different batch outcomes from the from the suppliers about other Essays such as stability data, how are, how is the trans.

How is, I would say traceability handled in this case?

How is everything documented?

You know, if something wrongs with the end product, there is a product recall and then you need to have a proof of record down to the city.

Right.

That makes a lot of sense.

And you guys seem very meticulous.

You have your SOPs and your processes and I mean, you have a PhD running your lab and a pharmaceutical background across your team.

How does that change the product compared to what most CBD companies are actually shipping with that background that you guys bring?

Yeah, it changes, I would say, the entire development mindset in this case because we approach formulation very systematically and not just let's.

We don't say just.

Not just let's combine trend ingredients because they sound good on social media or because ChatGPT said so.

Right?

Yeah.

And our lab team, whenever we start approaching a new formulation or research and development, there is a lot of stuff, there is a lot of studying going around ingredient, ingredient compatibility abilities, bioavailability risks, like oxidation risks, for example, we go even down to then to the sensory experience.

So there is a great consumer experience also in terms of tastes.

Then you need to check what about scalability and manufacturing?

Yeah, it's nice to find a very niche or exotic, so to say Botanic Electric.

But if there is a limited production of this, meaning it means that you don't scale.

Right.

And last but not least, compliance and regulation.

So I would say here that a formulation can sound impressive on paper and still fall commercially because it separates after 3 months, oxidizes too quickly, or creates compliance problems later.

Gotcha.

Some of your question here would be having scientific and pharmaceutical expertise helps close the gap between marketing ideas and products that actually perform consistently in the real world.

That's essential.

So to kind of shift gears here into, you know, brands that are in the eu, in, you know, Europe, across the world.

Ultimately you have companies coming to you guys to help with this white labeling and private labeling manufacturing.

Can you kind of walk me through what it actually looks like for someone who comes to Essentia Pura and says, I want to launch a CBD brand?

Like, where does the process begin?

Yeah, sure.

So people mostly think it's harder than people expect, so to say it's much, it's much, it's much, it's much, it's much simpler.

So when someone comes to us, they usually have like product ideas, target audience, a market they want to sell into our budget.

And then together within our collaboration approach, we figure out first, whether this is a white label product or a private label product, both make sense.

So white label is generally faster and lower risk.

You're using existing proven formulations here and focusing more on branding, packaging and distribution.

On the other hand, private label is more customized which includes formulation development, sampling, testing, stability assessments, packaging, compatibility, regulatory documentation and longer development timeline.

For example, you can launch a brand within the our white label program within two to four working weeks.

On the other hand, private label takes a minimum of 10 to 14 working weeks.

So one thing here we try to do is very early set realistic expectations from the inquiries or from newly established entrepreneurs brands entering the market.

Because launching CBD brand is not just designing a logo and opening a shopify store.

I'm sure you know yourself because the operational side here matters much more than people initially think.

Yeah, if you don't have an audience or a hungry buyer that wants your product and you go through all that work to create a product line and you haven't worked backwards from the end goal, then there could be some major gaps and it could be a big waste of time and money.

So you guys really help with that bigger vision of taking this product all the way to the market.

And in fact you guys have surveyed like 50 European CBD brands that you supply.

Their average repurchase rate is like somewhere between 85 to 90%.

I mean that's, that's pretty, pretty powerful number.

Like what do you feel like is driving that repurchasing and reordering?

What are these brands doing to have that consistent steady supply and growth?

Sure.

The biggest driver here is consistency which we discussed before.

Because most customers become loyal because a product has the flashiest marketing.

They may purchase it once.

Yeah.

But they reorder because the product reliably delivers the same experience each and every time.

Performing well within our experience and with the brands that we work with.

Usually focus on like clear positioning, realistic claims, customer trust and product consistency each and every.

Okay.

So on the other hand, the weaker brands often keep on chasing trends non stop.

Instead of building stable product lines customer can rely on, rather start with few products in your portfolio, few skus.

Establish a foundation there and then build on that.

Wellness products especially trust compounds over time.

And once customers trust the product experience retention improves naturally and customer acquisitions acquisition becomes much healthier in the long term.

Right.

So on the contrary, like what would you say are some of the biggest mistakes that you see brands making?

Even if they have good quality, good consistency, good supply, like everything is there, they've got you to lean on the Ones that don't actually make it past that first year of sales.

What would you say are the biggest factors that cause them to fail when it comes to marketing or the product or messaging or I know you say kind of tracing trends, chasing trends, but anything else that you have discovered or seen.

Yeah.

I would say here that one of the biggest mistakes is underestimating the importance of the product itself.

Because many founders success over marketing while ignoring formulation quality, stability, packaging capability, documentation or long term consistency.

And another major mistake maybe is constantly changing suppliers to have to save small amounts of money.

And natural products already have variability challenges by default.

And if you keep switching manufacturers extracts formulations, then consistency becomes very, very hard, if not nearly impossible.

And then the consumers customers start saying things like okay, the old batch felt better, the old oil tasted better and so on.

And I think that's, that's very damaging for long term rent.

Trust makes sense.

So not not only staying consistent with the one supplier, the formula and what you're providing, but not switching suppliers because then it adds far more complications and a lot more variability which just makes it inconsistent and less likely for people to trust.

Yeah.

And it can cost you more money than at the end.

Right.

So fewer products, stronger consistency and better execution and that's it.

It's simple.

Yeah, yeah, makes sense.

So many startup companies that are wanting to get into this what are like realistic minimum order quantities.

Like if someone comes to you and they're like hey, we want to have, we have a concept, we want to put it out into the market, what's that conversation like when someone comes in and they're kind of under capitalized or they're just starting out, maybe they have a certain budget set aside to launch something.

Like what does that conversation look like typically?

Yeah, sure.

So you definitely don't need millions just to launch a CBD brand, but some working capital is that you need.

You're right.

So our white label products start within 200 units per SKU as a memo queue.

A white label brand while on the private label it ranges from 5 to 10,000.

But still you need to take into consideration a part of products and product product development here in case of white private label obviously is then the inventory, the packaging, the documentations, testings and marketing costs.

So this, I was picking these numbers just for the, for in terms of manufacturing, the product itself is only one part of the Equation, Right, of course, yeah.

And that's totally reasonable.

I mean, starting with 200 units, that seems like a low barrier of entry for many people that have a vision or a dream to get a product, product out there and start, start getting it into the hands of people to get feedback and, and then go back to the drawing table and just slowly scale with you.

Yeah, and we kept, we kept, we keep, we're keeping it this way since, since our first years of operation because we were a startup once as well.

We ordered small quantities from our suppliers in terms of packaging, glass packaging or some other raw materials that we are using.

So we appreciated that as well.

And, and yeah, that's why we want to give back to the community and offer low, low MOQs in terms of white label products.

That's awesome.

So to give our listeners some kind of global context here around regulations and the overall EU regulatory environment around cbd, it's kind of a moving target.

Very similarly to like it is in the usa.

Brands have a difficult time navigating, making sure to stay compliant or stay up with the latest regulations.

How are you navigating novel food regulations right now?

Like what does that mean for brands selling into the European market as opposed to like selling into the US market?

Is there a huge difference or are you pretty much following a similar standard across the different countries and regulations?

So also if Europe sounds like common market, it's actually a little bit fragmented in terms of regulation and behaves differently in practice, even with broader EU EU frameworks.

And because if the law can in terms of CBD can vary from, from a state to a state, in some states Noble Food applies, while in the other it doesn't.

And our role here is helping brand navigate this, if you call it complexity through, like, through our awareness of the, of the, of the regulation and legislation within the EU and then supply them with strong documentation, compliant positioning, manufacturing standards, traceability.

As we discussed before, and we decided early on that if we wanted to be part of this journey long term, that we also needed to participate in shaping this future responsibly.

And that's one of the reasons we also submitted an overflow application through the EIHA consortium.

So a high industrial hemp association here in Europe.

Gotcha.

So it sounds like your EU first focused, obviously being that you're in Slovenia and that's kind of the main market.

Do you find that essentially the regulations in the EU are a little bit stricter than the U.S. so as long as you're following EU, it tends to apply to us as well or do you have to change testing or any sort of process for a different, different countries regulations?

So it, I think it's, it's similar the regulation in, in terms of CBD in Europe and in US it's, it both lies a little bit in the gray zone.

So to say, well, in terms of food supplement or wellness industry, if we are putting now cosmetics industry aside, you need to be FSA compliant in, in Europe while you have to be FDA compliant in, in U.S. right.

And so yeah, two different markets, but I think it's both, both, both similar situation.

Gotcha.

And the definition, my understanding of industrial hemp is a little bit different in the EU than it is in the US.

Is it true that the legal limit of THC is 0.2% whereas in the USA it's 0.3%.

Is that acc.

It's changed now.

So the European directive is 0.3 now, but in the past it used to be 0.2.

Yeah.

Okay.

So recently changed some, some European countries allow it even higher, for example.

Okay, interesting.

And I think in Italy nowadays is 05 or 06 and check.

It can be up to 1% but.

Excellent.

Okay.

Check the latest information.

So.

Yeah, right.

And there is a, there is a list of EU varieties in terms of seeds which farmers can grow.

But then again it's on the country by country to decide which are allowed to sell.

Okay, so it's kind of what varieties are you guys typically growing?

Do you stay consistent with the varietals or do you kind of change it up to meet specific cannabinoid or terpene kind of profile based on the customer needs?

So usually we would go for Eletta Campana, which is a Italian variety.

We are mainly working with, with the Italian farms.

So we don't cultivate or grow the, the hemp ourselves.

We, we purchase from selected farms as our expertise doesn't lie in cultivation.

So yeah, they grow it according to, to the agreement that we have.

We've been working with them now almost 10 years.

So we got each and every time very high quality cannabinoid profile profile, hemp profile, Turpin profile.

So and also then the extraction yield for us it's, it's a hard one.

And the more quality one requiring less post processing.

Gotcha.

So you stay with the same variety.

That way you have consistency throughout every batch.

Yes.

And how is the product delivered to you guys?

Is it like ground up into a biomass or do they like strip the stocks off?

Like what does the actual raw material look like when it goes into the CO2 extraction.

No, it's without stocks.

Basically, it's just leaf sand Flowers then are ground or dried?

Ground.

Sometimes we separately just leave.

Sometimes just the fruiting tops of the plant.

Depends on the client to client.

Depends on the product, to a product and to certain particle size, to the humidity that we have in our agreement with the supplier.

And then, yeah, it comes into certain bags and then it gets processed at our facility.

Nice.

And.

And is that just shipped regular, like ground shipping, or do you guys go pick it up yourself when you need like a new shipment or how does it get delivered across the different countries?

Yeah, no, it's regular truck shipping, ground shipping.

So, yeah, so it'll be like on pallets or whatever.

That's.

You're right, Tyler.

Yeah.

Nice.

Cool.

So to kind of shift gears and get more into like the.

The visionary side of things, you wrote in your founder's letter that the widespread use of botanical products is an inevitable evolution.

Where do you see the European CBD market or just the overall hemp market?

Like, people accepting this as an actual solution to their pains and ailments.

And outside of the cannabinoid world, even with hemp crete and hemp clothing and hemp foods, like, how do you see the future of this plant kind of playing out?

Is it getting better?

Is it getting worse?

Like, what is your three to five year vision?

Yeah, I think that the market is becoming more mature, obviously, both speaking for CBD and speaking for hemp, and more educated and less emotional.

So.

Because if you take a look at five years ago, a lot of CBD was driven by almost by hype.

And today consumers, retailers, regulators are all becoming more sophisticated, which is good.

Right.

And I think that the companies here that will succeed over the three to five years are the ones that manufacture consistently survive regulatory pressure, build trust and position cannabinoids inside broader wellness, nutraceutical and cosmetic categories.

I cannot speak, on the other hand, with hemp and food in terms of like hemp flowers, proteins, or hemp cream that you mentioned, because we are not in that type of industry.

But I think that cannabinoids will increasingly stop being viewed as the isolated CBD industry that still these days everyone talks about it and instead become more integrated into the.

Into the wellness and healthcare market.

So one area we strongly believe here at the Santia Pura is that it's reaching the synergy between different cannabinoids and playing with different ratios, developing different ratios along with other botanical extracts.

Right.

So instead of focusing on a single Ingredient Here we see the future in creating more sophisticated formulations that combine cannabinoids with functional botanicals like targeting specific, specific needs.

So for example like stress management, sleep recovery, focus and overall in general well being or wellness.

Yeah, because consumers are becoming more educated and they're looking for complete solutions here rather than just as I mentioned before, isolated ingredients.

So we think that that's where the market is moving in the long term and the future is probably just about CBD and more about intelligent botanical formulations, if you want to call them this way.

Yeah.

Kind of going back to our roots where cannabis was utilized in the pharmacopoeia of doctors and herbalists and it was just a part of our, our healing mechanisms and, and it was a part of the, the toolbox, so to speak, or that, that medicine bag.

And now we're kind of bringing that back to our roots essentially.

Yeah, you're right.

So if you could tell every hemp entrepreneur listening one thing that they could stop doing just for the industry overall.

Like what?

What is that one thing that companies are doing out there that's damaging this industry, you know, when it comes to sourcing their products or selling their products or any aspect of their business.

Like what would you say that one damaging thing that they should stop doing to ultimately help this industry keep moving forward with a better name?

Stop sourcing purely based on price.

Yeah.

Okay.

Manufacturing we discussed before, chip manufacturing decisions become very expensive later.

Right.

Because if you try for the industry, for everyone involved.

Yeah.

Here if you're talking like from, from our standpoint and what I learned with working with our brands, like we become part of the brand reputation as well.

So your manufacturer becomes part of your brand reputation.

Exactly right.

So developing a strong solid long term relationship and just sticking to it and not having it purely be based on price because ultimately in the end you're going to make more profit, more revenue as a result of sticking to higher quality, higher maybe higher value products than trying to just cut corners and save money.

Yeah, you are absolutely right.

The stronger supply chain you have, the better it is.

Well, I really appreciate this.

It's been insightful.

I just have a couple last questions here.

But before I go into those questions, where can people find you?

It's essentiapura.com is your website.

And how about online?

Where do you hang out?

Where can people come start following you on the socials or what, what's the best way to get in touch with you?

Sure.

So we have a dedicated LinkedIn profile from its essentiapura.

We can be found on LinkedIn.

We write some block, write some blocks as well to try and educate our target on the audience as much as possible.

But if someone is interested, it's best if they reach out by email.

We can schedule a call.

We can, it's.

We can have simply a conversation, see if there is a fit for each other and yeah, then we can move on from there.

Awesome.

So you heard it, guys.

Go to essentiapura.com and send out an email.

Send their contact info and just have a conversation with Nate's and the team and see what they can do for you guys.

My last question here, Nate's, is in terms of what you would want the world at large to know.

Like, imagine you're standing on a podium and you have the ability to send a message to every human being on this planet and you want them to know one thing.

Whether it's about hemp or CBD or cannabis or anything.

It could be about God, it could be about, you know, your purpose in life.

Like, what is it?

If you had one message that you could share with every human being on the world that they could member, you buy, what would you want to tell them?

I would say that stop worrying about the things that don't matter and focus on what does matter.

I love that.

So simple, so, so succinct.

That's.

That's very wise.

Well, Nate, this was exactly the kind of conversation that this industry needs to hear more of the, the real science, the real standards, you know, real talk, essentially for everyone listening.

You know, check out ess.

I'll have the links in the show notes.

So go check out their LinkedIn profile and check out some of the work that they're doing.

It's really top notch and top quality.

Thank you so much, Nate.

Nate, it was really fun having this conversation and look forward to doing more, more exciting things with you into the future.

Thank you, Tyler.

Thanks a lot.

It was my pleasure.

Awesome, man.

I'm just gonna stop the record.

Nice.

I'm not sure how did I reply all these questions, but.

Yeah, sorry, it got darker here.