CBD Focus for Ex-LifeLock CEO

Todd Davis, co-founder and former chairman and chief executive of Tempe, Ariz.-based identity protection firm LifeLock Inc., has set his sights on a new industry: CBD. 

Davis has joined Newport Beach-based Kadenwood LLC as chairman of the board, and invested $3 million in the upstart company, which was formed this year with plans to sell a variety of cannabidiol-based consumer products.

That investment is part of a Series A round of more than $10 million that Kadenwood—based in Newport Center—has raised so far this year, Davis told the Business Journal.

The money is being used to jump-start the company’s ambitious marketing plans for its forthcoming line of products, the first of which is a CBD-infused sports cream.

Cannabidiol, or CBD, is a naturally occurring compound found in hemp plants and its proponents say it has many potential therapeutic benefits. It is non-psychoactive—meaning it does not induce any feelings of being “high,” the company said.

$2.3B Exit

The $3 million personal investment is the largest in a company that Davis has made since stepping down as CEO of LifeLock in 2016. His company was bought by cybersecurity firm Symantec Corp. for $2.3 billion in 2017; Davis’ stake in the company at the time of the sale hasn’t been disclosed.

Other former LifeLock execs have joined the team at Kadenwood, along with those who’ve count high-level experience in a variety of consumer product sectors.

Much of the executive team already lived in the area, hence the Newport Beach headquarters.

Kadenwood is a far cry from Davis’ other investments in software companies such as consumer privacy startup Anonyome Labs Inc. in Salt Lake City and SaaS-based personalization platform Persosa, based in Phoenix.

“It’s an extremely unique opportunity because there is a large, addressable market and no brand leadership in the [CBD] space—and certainly not on a national scale,” Davis told the Business Journal last week. 

According to cannabis researchers Arcview Market Research and BDS Analytics, CBD sales in the U.S. will surpass $20 billion by 2024. 

Kadenwood officials said they are expecting to spend upward of $50 million on advertising to educate the public on CBD and the company’s products over the next two years. It has already lined up a handful of endorsers including ex-Dodger Steve Garvey, former NFL (and Santa Margarita Catholic High School) quarterback Carson Palmer, and basketball hall of famer Ann Meyers Drysdale, an Olympic gold medalist and San Diego native.

Experienced Team 

Davis isn’t shy about promotion; while with LifeLock, he famously posted his social security number in advertisements for the company. It was later reported that the publicity stunt resulted in his identity being stolen a dozen or so times in 2007 and 2008.

Similar to his transparent approach as the leader of LifeLock, Davis will tell you almost anything you want to know about Kadenwood’s plans, “because we’ve got guys on our team who were successful at selling bread and water.” 

“I’ll tell you exactly what we’re doing,” Davis added. “If you can out execute us, you deserve to win.” 

The company is led by Chief Executive Erick Dickens, who was selected as an inaugural Forbes “CMO Next” list of 50 top marketers for his overhaul at Torrance-based King’s Hawaiian, where he brought the bakery company’s sales to about $500 million in a five-year period.  

He also served in the U.S. Army before taking on marketing roles at Henkel, Kraft Foods Group, and LifeLock.

Joining Dickens is co-founder and Chief Operating Officer Doug Weekes, who has launched products at Henkel and Kraft Foods Group, and ran Kraft’s beverage divisions; and co-founder and General Manager Brian Newberry, the former chief executive at Myplash for MasterCard.

Set to Scale 

Kadenwood produces its own THC-free hemp on 300 acres of farmland at Stenzil Farms in Minnesota through its partner Canabanix, a privately owned company that Newberry shares a stake in.

Being vertically integrated is one of the company’s key advantages, according to Dickens. He likens it to an airline with its own gas—with the ability to control pricing and supply. 

In addition, the company has a licensing agreement with San Francisco-based Purity Organic in personal care, food and beverage, and pet product categories. 

Dickens described Kadenwood as having “close partnerships that could turn into more” with Canabanix and Purity Organic.

Next Steps 

Kadenwood last week launched its first product, a performance-based CBD sports cream with three levels of intensity, under the brand Level Select. Pricing ranges from about $40 to $90.

The company aims to have the travel-sized products in 5,000 retail locations by year’s end, before entering national retailers early next year. Kadenwood will also add sports tape and patches to its Level Select product line next year. 

Longer term, Kadenwood plans to enter food and beverage and pet product categories, in addition to personal care products. But the company is treading carefully.

“We entered the personal care category first because we have the regulatory green light,” said Dickens. “We’re ready to go with food and beverage, but we’re waiting for FDA approval. We won’t launch until then.” 

In the past, cannabis companies such as Massachusetts-based CuraLeaf have run into trouble by jumping the gun. Following a warning letter from the FDA, CVS Pharmacy pulled CuraLeaf’s products off its shelves for its misleading medical claims. 

To avoid similar issues, Kadenwood has added the former Surgeon General Richard Carmona as an adviser acting as the company’s internal watchdog, according to Dickens.