Though launched to serve an untapped niche within the CBD industry, founder Shannon Bard sees broader opportunities in consumer wellness and beauty contract manufacturing ahead.
Bard, who has 35 years of experience and nine startups on his resume, describes his latest foray with six-year-old e2e Pharma as “exciting” and “interesting.” The seeds for the company were planted when a networking opportunity with the owners of a growing cannabis business revealed an untapped niche.
Bard says he quickly realized that people within the CBD industry did not necessarily have the know-how to commercialize their products. The goal, he says, is to have e2e serve as a conduit for connecting all of the dots between creating a product and putting it in the hands of consumers.
“I thought it was important some of these brands — particularly the ones that were moving beyond just online, direct-to-consumer selling — needed a supply partner that understood retailing,” Bard says.
Speaking to his prior professional experience over the past three-and-a-half decades, Bard says, “I built several businesses that serviced the Walmarts, the Kmarts, the Targets, the Costcos, and the Sam’s Clubs of the world. I understood the discipline that it required to do business with those types of retailers and to be a good vendor/partner.”
e2e, which stands for “end to end,” provides a range of services to its clients including product formulation, manufacturing, graphic design, and packaging.
“The brands can focus on what they do best, which is communicating with their audience and building a brand, as opposed to doing a lot of other things that are outside of their expertise,” Bard says. “It saves them a lot of time and money.”
To date, e2e Pharma has invested $3.5 million into its 30,000-square-foot manufacturing facility, which is located in an industrial complex near the Phoenix Airport. The NSF-certified plant is divided into what Bard describes as “clean rooms,” each serving a specific purpose.
One of the rooms functions as a space for compounding products that are formulated in large batches. Another room is devoted to automated filling machines used for capping, coding, labeling, and shrink-wrapping products. The third room within the facility is devoted solely to clients’ ingestibles, which include such products as gummies and soft gels.
Speaking to the rationale behind the differentiated rooms, Bard says, “They’re in place so that we can manage airborne particulates and atmospheric conditions.”
Challenges: Bard says there are two broad factors that have weighed on the company’s decision-making processes in more recent years.
Supply chain challenges have, and continue to have, an impact on business. “We’re suffering from the same thing a lot of people are,” Bard says. “It’s hard to get the raw materials in a timely fashion, so we’re having to buy out six to 12 months on a lot of the key components and ingredients.”
Government regulations around the cannabis space are still pending. The lack of clarity also has posed a challenge as e2e continues to work within the industry. But once concrete guidance is handed down from federal authorities, Bard says he is optimistic about the road ahead.
“There’s some uncertainty, in terms of regulatory, that’s holding some people back,” he says. “Once that gets resolved, you’re going to see the mass merchants step in.”
Opportunities: Taking a long view ahead, Bard says e2e Pharma is poised to expand beyond its current core niche. Relationships with cosmetics and supplements companies have already been forged.
“Looking to the future, we’re heavily focused on non-hemp products,” Bard says. “Plant-based health and wellness is really our focus. We’re working with companies for both ingestibles and topicals for overall wellness, immunity, and beauty. We’re getting a lot of good engagement with some top brands.”
Needs: As the business continues to evolve, Bard says e2e Pharma is outgrowing its current configuration, meaning additional warehouse space will be needed in the near future.
“We’re considering warehousing the product for them and then drop-shipping it,” Bard says of further growth possibilities for e2e. “It cuts a lot of additional costs out of the supply chain. I think it would be a nice hook to offer an additional service that would be able to compliment [our client] relationship. We’re probably going to be looking at doubling our space in the next 12 to 24 months.”