Featured Company / Sibannac, Inc.

Anyone that has ever started a business with the intention of selling a consumer packaged good (CPG) understands that it is an incredible amount of work along a path littered with potholes that can cause a business to stumble or flat-out fail. And most will, inevitably fail even after a decade of keeping their nose to the grindstone.

Some research shows the failure rate as high as 90% within the first 10 years of starting the business. CB Insights does a remarkable job at analyzing upstarts from every angle, including post-mortem data to understand the top reasons for failure. Not surprisingly, running out of money is the top reason, but realizing there was ultimately no market for the product was a close second. Other reasons include flawed business model, being outcompeted, bad product timing (or just bad product), and cost issues, amongst others.

There are consultants out there that are willing to share their wisdom, but it doesn’t come cheap. And manufacturers? They typically have minimum size production runs that aren’t efficient or cost effective. As such, upstarts are left with a spate of challenges, most they are unfamiliar with how to overcome.

After going through some of these things themselves, Sibannac, Inc. (OTCPK: SNNC) pivoted its business model to not only develop and commercialize products of their own, but also serve as a partner to upstarts developing unique products of their own that need a helping hand to eliminate common pitfalls.  Through its Campus Co platform, Sibannac can select partners to incubate new product innovations, generate revenue as a marketer, as well as identify acquisition targets to bring under the corporate umbrella.

For about a decade, Sibannac has been involved in some way or form in the burgeoning hemp and cannabis markets (hence the name is “cannabis” spelled backwards). This included an advertising service and developing products featuring cannabinoids derived from hemp, a non-psychotropic cousin of marijuana. There are over 100 identified cannabinoids in cannabis and hemp that are believed to have unprecedented medical benefits. While cannabis remains verboten at the federal level, it is legal to some degree in most U.S. states and throughout Canada, which has underscored a surge in clinical research evaluating cannabinoids, particularly cannabidiol (CBD), for hard-to-treat diseases, as well as some common conditions ripe for innovation to improve outcomes.

By focusing on hemp, Sibannac products fall under the domain of the Agriculture Improvement Act of 2018, colloquially known as the 2018 Farm Bill, which opened nationwide commerce to products exclusively using hemp constituents. It also means that these products do not require any specific licensure or regulatory approval. The company has also conducted research of Delta 8 THC (tetrahydrocannabinol), a newly discovered form of THC found in small amounts of cannabis that falls under stricter regulations of individual states due to its federal Schedule I classification.

Sibannac differentiates itself by developing only high-grade products for people and pets that are complete with certificates of analysis from testing by independent, certified labs. Certification provides assurance to consumers that they are getting consistent, safe (no pesticides, chemicals, etc.) products that contain accurate amounts of what Sibannac claims.

While creating its own brands for sale through Direct-to-Consumer (DTC) channels, Sibannac has diversified under the leadership of David Mersky as Chief Executive Officer into a full-service product development company and manufacturer of CBD and next generation wellness products. Mersky is also CEO of NOHO, Inc. (OTCPK: DRNK).

Sibannac provides contract manufacturing services through its FDA registered facility in Scottsdale, Arizona following cGMP protocols. It also has its flagship retail location in Old Town Scottsdale, which serves as a secondary R&D center with the perk of getting immediate consumer feedback useful for devising scaling and commercialization strategies. To make it all happen, the company has attracted some top talent that has managed project for household name Fortune 500 companies to lead new product development and marketing.

The In-House Brands and a Brilliant Acquisition

The Campus Co is the central hub for Sibannac’s operations (in fact, a name change might be in order as it is that integral to the parent company). It is the product development and marketing machine containing the infrastructure behind all branding, product development, sourcing, manufacturing, sales, and distribution efforts that make new products appear and go to market as Sibannac and customer brands.

Through The Campus Co, upstarts have access to services such as branding, market intelligence and expertise, innovation, sourcing and manufacturing, and sales and distribution. Moreover, The Campus Co curates its services with recognition that upstarts often times have limited resources that must be mindfully managed. In short, The Campus Co is the complete ecosystem for upstarts seeking to transform their ideas into high-growth companies.

NOHO operates in the beverage and hospitality market and is best known for its NOHO hangover recovery shot. The shots, which have garnered many positive reviews, are packed full of ingredients like antioxidant-rich herbs (good for reducing free radicals produced by the liver as it processes alcohol), Vitamin B complex, Vitamin C, a 72-trace-electrolyte complex, glucuronolactone, amino acids, and other hangover-fighting ingredients. Additional products in development include an energy drink and immunity-boosting shot.

NOHO is reformulating its products and expanding into the wellness space with formulations featuring CBD, hemp-derived Delta-8 THC, Kratom and Copper 1. Kratom is a word referring to both Mitragyna speciosa, a tree native to Southeast Asia, and to products derived from its leaves that are marketed as herbal supplements. Kratom is believed to act on opioid receptors resulting in mood enhancement and fatigue reduction. Long used in Eastern medicine for natural pain relief, Kratom is growing in popularity as an alternative to prescription pain killers.

More on Copper 1 in a moment.

Cherryology has a target demographic of educated women aged 42-55 with children. The plans are to develop products including cannabinoids, kratom, and melatonin to provide relief from NAPCIF (Nausea, Anxiety, Pain, Cognitive, Insomnia, Fatigue). Other products are expected to target autoimmune conditions (i.e., fibromyalgia, MCAS, Lyme, IBS). There is an unmet need for supplements for these conditions where traditional drugs are relatively ineffective or, in some instances, doctors make a diagnosis as psychological and treat with antidepressants or not at all.

RaD8Life is a brand targeting men 22-44 and women 22-35 for health, vitality, and excitement. In this endeavor, Sibannac has consulted with leading testing labs on research of Delta 8 THC and its requirements for a proprietary conversion process and state of the art quality assurance to ensure consistent production.

Last Spring, as it transitioned into the new business model, Sibannac entered into an agreement for an option to acquire Lifetime Branding Collaborative, bringing the group of career brand builders under the Sibannac umbrella, including Eric Stoll as the new Chief Marketing Officer at Sibannac. Stoll has built a strong reputation throughout his 30+ year career as a marketing guru working with some of the world’s most recognizable brands, such as Titleist, Converse, Foot Joy, Coca-Cola, Colgate-Palmolive, and Pepperidge Farms. He has enjoyed similar success with developing brands, including building the Super Candy brand to 25,000 doors in three years and was carried in Walmart, Target, Costco, Whole Foods, and leading pharmacies.

Ahead of the acquisition Sibannac had engaged Lifetime to create RaD8Life and Cherryology as they sharpened their focus on the alternative wellness space and sales expansion into wholesale and retail along with DTC. As it went, The Campus Co was also the brainchild of Stoll.

Associate Brands (and More Acquisition Activity)

In a recent interview, Mersky made it clear that they are being selective in who they partner with for product development. They are not interested in bringing “also rans” into saturated markets to fight for scraps of market share. Only companies with innovative, disruptive products are being explored. “Everything is proprietary, you won’t see anything like it,” said Mersky.

To that point, Sibannac has forged some highly compelling partnerships, which they call “associate brands”. The relationship with associated brands can be either short-term or long-term, both of which serve as revenue drivers for Sibannac. Revenue can include manufacturing and service fees, sales commissions, profit sharing, equity ownership, and others based upon negotiated deals. Revenue is omni-channel for Sibannac, meaning it can come from different sources within the Sibannac ecosystem, such as the lab, marketing, logistics, fulfillment, or sales.

In February, Sibannac inked a letter of intent to work with SOMO™, a sleep fitness innovator led by renowned fitness experts Lisa and Paul Juris. SOMO™ has developed a patent pending sleep mask, incorporating SOMO™'s acupressure point, with a unique adjustable retention band, for entry into a U.S. sleep aid market forecast to reach $14.5 billion as part of the $432 billion global sleep market.

Based on the Yin Tang pressure point - which has been clinically shown to induce calm and reduce stress - SOMO™'s innovation has been expertly researched and designed to provide next generation wellness in the emerging area of Sleep Fitness™. There is a renaissance happening among the health conscious where sleep is identified as a pillar of health alongside exercise and nutrition, resulting in a growing market for products designed to improve the quality of nighttime rest to facilitate elevated energy and peak brain function during the day.

Per the LOI, the companies are hammering out details for an equity acquisition in SOMO™ by Sibannac, in which the companies would collaborate to bring the mask to market, as well as develop future wellness products under the SOMO™ brand. Eric Stoll and team have already developed the initial branding for SOMO™ while acquisition details are finalized.

SOMO™ already has a large purchase order pending from an international distributer, subject to production of the market-ready sleep mask. The latest prototype was delivered with expectations that the final version of the mask will be ready in the coming weeks.

Sibannac is also developing a marketing strategy for Spur Agritech and Spur Biotech, companies operating in the Controlled Environment Agriculture and Plant-Based Vaccines areas.

Sibannac has a different relationship with Mitosynergy, the owner of multiple U.S. patents for molecular compounds for bioavailable coppers, namely Cuprous Nicotinic Acid. These patented compounds involve the only known bioavailable Copper 1 in the Copper 1 oxidative state. In this optimal state, copper has potential use as a pharmaceutical or nutraceutical.

Sibannac has a licensing agreement with Mitosynergy for which Sibannac is developing a Copper 1 Niacin product engineered to aid immunity. The strategy is to develop Copper 1 Niacin as an immune modulator to pursue a therapeutic claim for long-COVID and blood born microaerophilic spirochete bacteria pathogens, such as Lyme Disease (see aforementioned Cherryology strategy).

Mitosynergy has received a “No Objection” letter from the U.S. Food and Drug Administration, green-lighting the copper compound to be marketed as an Initial New Dietary Ingredient ("IND"). The company is now in the process of submitting a New Drug Application to the FDA, which will lend a great deal of validation if approved.

While Sibannac may have a cannabis twist to it, this is certainly no “pot stock.” The pivot to a full-service product accelerator (with or without cannabinoids) and marketer was a truly savvy move to diversify, differentiate, and create a much larger revenue opportunity. A year in the making, The Campus Co was an addition that put wind at Sibannac’s back as it looks like the company is really starting to hit its stride as a premium product developer. It’s a bit hard to believe the company has a market cap around $3 million. Wall Street just hasn’t caught on…yet.

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