Jared Stanley: Look, actually, it’s a great question. What we’re currently focusing on is transitioning our current gummies to certified organic, our legacy gummies, we call them: the sleep; calm; and recovery. We’ve also identified a that has lower COGS and we expect those COGS to flow through to a higher gross margin in early 2020 — sorry, to mid-2023. And keep in mind, the legacy gummy sleep alone, calm recovery. These make up the lion’s share of Charlotte’s Web’s revenue in the gummy portfolio.
Derek Dley: And would there ever be a scenario where you would — instead of using , you would look to do this in house?
Jared Stanley: Look, I mean, that’s a good question. And it’s certainly of interest to us. Setting up gummy manufacturing is very expensive, the right equipment, it adds a lot of complexities. We have the infrastructure to do it, and we’ll have to weigh that option over the coming years.
Jacques Tortoroli: The other thing I’d say is as we return to growth when we return to growth, that’ll just give us incremental leverage as we renew arrangements and continually looking for alternative options that don’t compromise quality but can drive down the price of our COGS.
Operator: Our next question comes from Pablo Zunk of Cantor Fitzgerald.
Pablo Zunk: Look on the political side, just a few questions around H.R. 841, right. So for example, how much under the radar you said, people talking about safe out there, but not about — not as much as how H.R. 841 in my opinion. Is there any potential for some of the key components of H.R. 841 to go into safe plots in the lame duck session? Can you talk about how bipartisan is it? And, in terms of the senators you talked about, Senator McConnell they’ve ever made any comments around H.R. 841 or make you wait to include in the future Farm Bill revision. So now it has a lot of questions Jared but if you can just expand on HR-841? Thanks.
Jacques Tortoroli: Yeah, I’ll let Jared answer. He’s closest to it, Pablo.
Jared Stanley: Let me give you some color. First of all the election results, I think we all thought that republicans were going to take both the House and the Senate. There’s a very divided, we have a very split Congress right now. And with a split Congress, when we’ve been through this was safe plus cannabis has the — it’s still a conflict. It doesn’t have the, it has opposition, specifically on the Republican side. We saw the Democrats make some really awesome announcements that would push it forward, it could have been just a push to bring in voters looks like that push probably worked. But on 841, we just have no opposition. So we believe it’s better. Could it go into the lame duck, possibly, but we believe it’s better as a standalone, as opposed to coming into cannabis and having the opposition that cannabis still has, which CBD we just haven’t had the opposition.
Pablo Zunk: And I don’t know if you can talk in terms of senators, can you mention senators and publicly supported HR-841? I’m not aware of, for example, Senator McConnell supporting it, but can you talk about that?
Jared Stanley: Yeah, good question. I won’t say any of their names but we are actively working with senators to be drafting the Companion Bill to H.R. 841 for the Senate, which is our next step. So that’s been an awesome progress, but it’s too early to be coming out with their names.
Pablo Zunk: And then, on the distribution front, Jacq, if you could expand, you talked about 22% down in terms of points of sale, Charlotte’s Web were only down 14%. What type of channels are we talking about? I mean, is it generalize, FDM, natural, if you’re going to be more specific? And then, in terms of all the announcements, you’ve made major league and all those other things, when do you think we can see Walmart or Costco come through or are they going to wait for HR-841 pretty much? Thanks.
