By Sheldon Baker03.03.21
Dave Neundorfer is the co-founder and CEO of Open Book Extracts (OBX), a cGMP-certified manufacturer known for premium cannabinoid products, exceptional customer service, and industry-leading transparency. Prior to OBX, Neundorfer co-founded Greenleaf, a leading Ohio medical marijuana company that won and now operates the maximum number of licenses allowed by the state. While Neundorfer’s commitment to cannabis is driven by the firm belief in its efficacy, his engineering background drives his commitment to data and traceability. Neundorfer started his career as a quality engineer in the automotive space and then served Fortune 500 semiconductor companies as CEO of LineStream, an automation software company he co-founded and sold in 2017. He studied engineering and studio art at Dartmouth College and received his MBA from the Stanford Graduate School of Business.
Area Code 420 (AC 420): Open Book Extracts (OBX) offers one of the largest portfolios of cannabinoid isolates, including CBD, CBG, CBN, CBC, CBDV, and THCV, all at greater than 99% purity. How does this help set you apart from the competition?
Neundorfer: We have yet to see a cGMP-certified competitor that can match the breadth of our cannabinoid portfolio nor our pharmaceutical-grade purity, batch-to-batch consistency, and formulation-readiness. This breadth and quality enable us to serve all client categories, including CBD, consumer packaged goods, and nutraceutical brands, but also licensed multi-state operators, ingredient distributors, contract manufacturers, and even academic research institutions. This not only helps our topline but accelerates innovation by giving our R&D team the ability to identify cross-category trends and skate to where the puck is going.
AC 420: You also offer custom-blend THC-free broad-spectrum distillates that can be tailored to meet customer specifications, water-soluble powders and liquids, and a portfolio of finished products including edibles, soft gels, tablets, tinctures, and topical products. Between ingredients, custom formulations, and retail products you have covered all the bases.
Neundorfer: We have become a one-stop shop not only for pure and consistent cannabinoids, but bespoke inputs and formulations, innovative product enhancements and routes of administration, and differentiated finished goods manufacturing services. While all of these offerings are listed in the OBX catalog, we proudly acknowledge that we partnered into many of these capabilities, especially on the product enhancements and finished goods. We embrace the concept of open innovation whereby we marry our cannabinoid production, formulation capabilities, and international sales and marketing reach with world-class companies focusing on a synergistic link of the value chain. These pre-vetted partnerships create alignment, efficiencies, and a holistic approach to realizing our clients’ vision.
AC 420: You recently acquired a patent covering the application of terpenoids and cannabinoids onto smokable hemp and other dry herbs. How does this fit into your overall sales strategy?
Neundorfer: We have a unique vantage point on the market as we serve most of the leading CBD brands and leading MSOs and many of the CPGs who have entered the market. This gives us the ability to see around corners to innovate for tomorrow’s market. Our IP strategy helps us build competitive moats and capture differentiated capabilities that we develop internally or, in the case of the terpinoid and cannabinoid spray technology, acquire from external parties. Our cannabinoid opportunity map spans nutraceutical, pharmaceutical, cosmetic, big beverage, and big tobacco categories. Early research suggests that hemp and hemp extracts can support smoking cessation. With consumers seeking healthier alternatives to tobacco cigarettes, we see hemp cigarettes as a major market and our patented cannabinoid and terpenoid spray technology as a way to guarantee a consistent user experience.
AC 420: An additional sales strategy includes global sale into the Far East and other areas.
Neundorfer: As cannabinoid markets are emerging the world over—Mexico, Australia, South Africa, Brazil, U.K., E.U.—we are bullish on Asia becoming the leading consumer of cannabinoids within five years. We opened OBX Asia in June 2020 to establish a beachhead on the ingredient and finished goods market, build partnerships, and stay on top of the evolving regulations so when these markets explode, we will be an early leader leveraging our U.S.-based cannabinoid experience to give us a leg up.
AC 420: It is an old cliché, still, your “state-of-the-art” extraction campus near North Carolina’s Research Triangle looks to be at the forefront of cannabinoid manufacturing.
Neundorfer: That is certainly what our clients and vendors tell us after having seen most of the field. Our founding principle was to serve as the true north for the cannabinoid industry and raise the bar for transparency, traceability, quality, and execution in the supply chain. While it was not a requirement, we embraced the FDA’s current Good Manufacturing Practices (cGMP) standards as a framework to achieve those high standards. We designed and built our facility with cGMP-compliance in mind, which enabled us to pass our certification for food nutraceutical (CFR part 111) and food processing (CFR part 117) with excellent ratings on the first audit. Today, our certified facility looks more like a pharma lab than your typical CBD processor.
AC 420: Has it been difficult to be heard amongst all the CBD noise?
Neundorfer: We deliberately flew under the radar as we were building our facility in 2019, which was the height of the noise and hyperbolic headlines. Humility is one of our core values, and we wanted to let our products and execution do the talking. However, in 2020, the noise started to fade as many of those same companies that grabbed the headlines started faltering amid price compression and COVID. It was not easy to build a reputation in what was then still a relationship-driven market, but these Darwinian forces helped to build a reputation as the go-to partner for leading brands in the space. We started getting in-bound requests from CPGs and nutraceutical companies when we announced that Prinova, a global ingredient distributor serving most of the big-name brands in the beverage and sports nutrition space, had selected OBX as its exclusive cannabinoid provider. There’s still noise in the market but we are now to the point where our reputation for quality and customer service usually precedes the first conversation with a new client.
AC 420: What does quality mean to you and why is it critical to your business strategy?
Neundorfer: I cut my teeth in the automotive market where a one-in-ten-million defect was a recallable issue for our clients. We have infused that mentality into a market with a dubious legacy for inaccurate label claims and batch-to-batch variation in potency and purity. Quality is not only a key part of our business strategy that enables a 70% close rate when clients evaluate our samples, but also instrumental to our vision to raise the bar in the overall cannabinoid market.
AC 420: What has been your most effective marketing tactic or technique?
Neundorfer: Get prospective clients and partners to our facility to see our operation and meet our team. While the design and sophistication of the physical plant is certainly a point of differentiation, our visitors usually speak more about our team and our culture of excellence on their way out. We are 30 minutes from North Carolina’s Research Triangle Park, ripe with pharmaceutical, formulation, and manufacturing talent that we have recruited to OBX. We have never failed a supplier audit and, when a prospective client visits our facility, we nearly always win their business.
AC 420: Where do you envision the most significant growth to occur in the company in the next few years?
Neundorfer: We are investing heavily in research that will enable OBX to match compounds such as ingredients, formulations, and finished goods to conditions and specific need states that include pain, anxiety, sleep, skin irritation, and metabolic issues. Consumers and brands are moving beyond the one cannabinoid fits all phase of the market as they seek a more tangible, perceptible cannabinoid experience. Our ability to dial in products with highly effective minor cannabinoids will allow us to serve this demand; our research and IP will enable a product plus claim licensing model that today is in its infancy. In the future, our catalog will be organized by need state with data-backed efficacy claims, with cannabinoids playing more of an enablement role in concert with other actives and ingredients.
AC 420: Which is most important to your organization—mission, core values or vision?
Neundorfer: Our core values are most important to OBX. Our vision is to “harness the healing powers of hemp to service humanity” and our mission is to “serve as the industry’s True North by delivering premium products, exceptional service, and industry-leading transparency.” However, our core values—transparency accountability, curiosity, humility, grit, compassion, and respect—have served as our anchor as we have navigated a fast-paced market in constant flux.
Sheldon Baker
Sheldon Baker is CEO of the Baker Dillon Group LLC and has created numerous nutraceutical brand marketing communications and public relations campaigns for many well-known supplement and food industry companies. For interview consideration or brand marketing consulting, contact him at Contact@The420AreaCode.com.
Area Code 420 (AC 420): Open Book Extracts (OBX) offers one of the largest portfolios of cannabinoid isolates, including CBD, CBG, CBN, CBC, CBDV, and THCV, all at greater than 99% purity. How does this help set you apart from the competition?
Neundorfer: We have yet to see a cGMP-certified competitor that can match the breadth of our cannabinoid portfolio nor our pharmaceutical-grade purity, batch-to-batch consistency, and formulation-readiness. This breadth and quality enable us to serve all client categories, including CBD, consumer packaged goods, and nutraceutical brands, but also licensed multi-state operators, ingredient distributors, contract manufacturers, and even academic research institutions. This not only helps our topline but accelerates innovation by giving our R&D team the ability to identify cross-category trends and skate to where the puck is going.
AC 420: You also offer custom-blend THC-free broad-spectrum distillates that can be tailored to meet customer specifications, water-soluble powders and liquids, and a portfolio of finished products including edibles, soft gels, tablets, tinctures, and topical products. Between ingredients, custom formulations, and retail products you have covered all the bases.
Neundorfer: We have become a one-stop shop not only for pure and consistent cannabinoids, but bespoke inputs and formulations, innovative product enhancements and routes of administration, and differentiated finished goods manufacturing services. While all of these offerings are listed in the OBX catalog, we proudly acknowledge that we partnered into many of these capabilities, especially on the product enhancements and finished goods. We embrace the concept of open innovation whereby we marry our cannabinoid production, formulation capabilities, and international sales and marketing reach with world-class companies focusing on a synergistic link of the value chain. These pre-vetted partnerships create alignment, efficiencies, and a holistic approach to realizing our clients’ vision.
AC 420: You recently acquired a patent covering the application of terpenoids and cannabinoids onto smokable hemp and other dry herbs. How does this fit into your overall sales strategy?
Neundorfer: We have a unique vantage point on the market as we serve most of the leading CBD brands and leading MSOs and many of the CPGs who have entered the market. This gives us the ability to see around corners to innovate for tomorrow’s market. Our IP strategy helps us build competitive moats and capture differentiated capabilities that we develop internally or, in the case of the terpinoid and cannabinoid spray technology, acquire from external parties. Our cannabinoid opportunity map spans nutraceutical, pharmaceutical, cosmetic, big beverage, and big tobacco categories. Early research suggests that hemp and hemp extracts can support smoking cessation. With consumers seeking healthier alternatives to tobacco cigarettes, we see hemp cigarettes as a major market and our patented cannabinoid and terpenoid spray technology as a way to guarantee a consistent user experience.
AC 420: An additional sales strategy includes global sale into the Far East and other areas.
Neundorfer: As cannabinoid markets are emerging the world over—Mexico, Australia, South Africa, Brazil, U.K., E.U.—we are bullish on Asia becoming the leading consumer of cannabinoids within five years. We opened OBX Asia in June 2020 to establish a beachhead on the ingredient and finished goods market, build partnerships, and stay on top of the evolving regulations so when these markets explode, we will be an early leader leveraging our U.S.-based cannabinoid experience to give us a leg up.
AC 420: It is an old cliché, still, your “state-of-the-art” extraction campus near North Carolina’s Research Triangle looks to be at the forefront of cannabinoid manufacturing.
Neundorfer: That is certainly what our clients and vendors tell us after having seen most of the field. Our founding principle was to serve as the true north for the cannabinoid industry and raise the bar for transparency, traceability, quality, and execution in the supply chain. While it was not a requirement, we embraced the FDA’s current Good Manufacturing Practices (cGMP) standards as a framework to achieve those high standards. We designed and built our facility with cGMP-compliance in mind, which enabled us to pass our certification for food nutraceutical (CFR part 111) and food processing (CFR part 117) with excellent ratings on the first audit. Today, our certified facility looks more like a pharma lab than your typical CBD processor.
AC 420: Has it been difficult to be heard amongst all the CBD noise?
Neundorfer: We deliberately flew under the radar as we were building our facility in 2019, which was the height of the noise and hyperbolic headlines. Humility is one of our core values, and we wanted to let our products and execution do the talking. However, in 2020, the noise started to fade as many of those same companies that grabbed the headlines started faltering amid price compression and COVID. It was not easy to build a reputation in what was then still a relationship-driven market, but these Darwinian forces helped to build a reputation as the go-to partner for leading brands in the space. We started getting in-bound requests from CPGs and nutraceutical companies when we announced that Prinova, a global ingredient distributor serving most of the big-name brands in the beverage and sports nutrition space, had selected OBX as its exclusive cannabinoid provider. There’s still noise in the market but we are now to the point where our reputation for quality and customer service usually precedes the first conversation with a new client.
AC 420: What does quality mean to you and why is it critical to your business strategy?
Neundorfer: I cut my teeth in the automotive market where a one-in-ten-million defect was a recallable issue for our clients. We have infused that mentality into a market with a dubious legacy for inaccurate label claims and batch-to-batch variation in potency and purity. Quality is not only a key part of our business strategy that enables a 70% close rate when clients evaluate our samples, but also instrumental to our vision to raise the bar in the overall cannabinoid market.
AC 420: What has been your most effective marketing tactic or technique?
Neundorfer: Get prospective clients and partners to our facility to see our operation and meet our team. While the design and sophistication of the physical plant is certainly a point of differentiation, our visitors usually speak more about our team and our culture of excellence on their way out. We are 30 minutes from North Carolina’s Research Triangle Park, ripe with pharmaceutical, formulation, and manufacturing talent that we have recruited to OBX. We have never failed a supplier audit and, when a prospective client visits our facility, we nearly always win their business.
AC 420: Where do you envision the most significant growth to occur in the company in the next few years?
Neundorfer: We are investing heavily in research that will enable OBX to match compounds such as ingredients, formulations, and finished goods to conditions and specific need states that include pain, anxiety, sleep, skin irritation, and metabolic issues. Consumers and brands are moving beyond the one cannabinoid fits all phase of the market as they seek a more tangible, perceptible cannabinoid experience. Our ability to dial in products with highly effective minor cannabinoids will allow us to serve this demand; our research and IP will enable a product plus claim licensing model that today is in its infancy. In the future, our catalog will be organized by need state with data-backed efficacy claims, with cannabinoids playing more of an enablement role in concert with other actives and ingredients.
AC 420: Which is most important to your organization—mission, core values or vision?
Neundorfer: Our core values are most important to OBX. Our vision is to “harness the healing powers of hemp to service humanity” and our mission is to “serve as the industry’s True North by delivering premium products, exceptional service, and industry-leading transparency.” However, our core values—transparency accountability, curiosity, humility, grit, compassion, and respect—have served as our anchor as we have navigated a fast-paced market in constant flux.
Sheldon Baker
Sheldon Baker is CEO of the Baker Dillon Group LLC and has created numerous nutraceutical brand marketing communications and public relations campaigns for many well-known supplement and food industry companies. For interview consideration or brand marketing consulting, contact him at Contact@The420AreaCode.com.
