Cannabis R&D Firms See Wild Growth Curve

Cannabis R&D Firms See Wild Growth Curve

USA News Group News Commentary

PR Newswire

LOS ANGELES, September 12, 2017

LOS ANGELES, September 12, 2017 /PRNewswire/ --

USA News Group - Canada's cannabis boom is in full swing in anticipation of removal of road blocks that will make way for massive production of weed in a post prohibition economy. Companies making moves in the industry include: CanniMed Therapeutics Inc. (TSX: CMED) (CMMDF), Supreme Pharmaceuticals Inc. (TSX-V: FIRE) (OTC: SPRWF), Lexaria Bioscience Corp. (CSE: LXX) (OTC: LXRP) and Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF).

The country's health administration is scrambling to deal with the onslaught and the rush is having unexpected side effects. Namely, Health Canada is increasing licenses for Access to Cannabis for Medical Purposes Regulations (ACMPR) licences. This shift is positioning several Canadian R&D and testing companies at the forefront of the greatest growth industry in the country.

Markets are keen on the trend and it's reflecting in these company's share values.

Atop the list is Abattis Bioceuticals Corp. (CSE: ATT) (OTCQB: ATTBF), which is set to make some major inroads with its licensed testing and timely extraction capabilities - one of very few public companies with this profile.

Also noteworthy is CanniMed Therapeutics Inc. (TSX: CMED) (CMMDF) that reached a high of $13.35 in early 2017 and has currently pulled back to the $9.00 range. The company has made real progress in cannabis plant-based extraction technology.

CMED is just one of the Cannabis industry related stocks feeling the direct impact of the massive research, development and testing demands.

Other candidates who stand to benefit from this hockey stick type growth curve are Supreme Pharmaceuticals Inc. (TSXV: FIRE) (OTC: SPRWF), and Lexaria Bioscience Corp. (CSE: LXX) (OTCQB: LXRP) who have both seen major price rises since their IPOs.

Growing too Fast? 

The legal cannabis industry is growing at what can only being described as phenomenal rate.

The overall optimism led researchers at New Frontier Data to project that the cannabis industry will have created a whopping 283,422 jobs, grow to and generate $2.3 Billion in tax revenue-both by 2020.

The same study predicted that the sector as a whole will grow to $24.1 Billion by 2025.

Legal in all 50 US states and Canada, the American CBD market hit $170 million in 2016, and is projected to hit $1 billion by 2020.

What's not widely seen is the boom in the infrastructure to support these many products that are providing the industry's value. Things are developing so fast that the industry is just now beginning to figure out how to accommodate that hyper growth.

To reach these kind of massive numbers, the industry is going to need a lot of independent labs doing research and coming up with new and better extraction methods, formulations and major testing capacity.

ATT in the Crosshairs 

All the growth and attention being paid to testing have put ATT squarely in the crosshairs. The company is quickly establishing multiple assets to become Canada's cannabis testing, formulation and extraction facility of choice.

As a cooperative arm of the company to run in conjunction with Northern Vine Labs, Abattis has formed another subsidiary under the name Vergence, which will market and sell natural, safe, and effective health products.

Those products will target reducing pain caused from inflammation, boost immunity, and increase nutrient absorption. As natural remedies, these products will likely reach the market faster than a pharmaceutical product would, without the lengthy and costly clinical trials.

Building Infrastructure 

Many of the companies in the cannabis space have entered through the producer's side of the business in cultivation or harvesting. Certainly the big three in Canada have focused on production.

However, there remains a very large and potentially profitable opening for those companies applying bioscience and technology to the business.

Early frontrunners in this field are companies like CanniMed Therapeutics, which offers GMP-compliant production process and world class research and development platforms with a wide range of pharmaceutical-grade cannabis products from its base in Saskatchewan.

But, even significant players have yet to tap into an even greater potential resource… one that's at the center of up and comer Abattis Bioceutical Corp.'s agenda.

Abattis Bioceuticals and its majority-owned subsidiary Northern Vine Labs have merged efforts to create a state-of-the-art testing and research company, supported by its fully licensed labs that provide for legal cannabis testing and formulations.

These combined operations will be one of the most sophisticated, Health Canada licensed operations in the country with the potential to handle virtually all forms of Cannabis testing and extraction development.

Cannabis Testing a Must 

The global cannabis testing market is expected to grow at a compound annual growth rate of 11.5%, culminating towards a $1.42 billion market by 2021.

In order to hit the shelves, producers will need to have an accurate depiction of the drug's potency, including the levels of the most sought after medicinal components of cannabis, THC and CBD. To achieve that, even the mega producers will require a third party to test their product before it goes to market.

That's where Abattis is smartly staking its place as the gold standard. Their first order of business was to build a full spectrum lab and staff it with industry experts to ensure the quality standard they promise the sector.

The company's Northern Vine Labs facility will not be limited for testing, however. Another major component to the facility will be in extraction and formulation.

This means that the company will be involved in innovation of methods to extract medicinal components from cannabis on a massive industrial scale, and to formulate them for consumer products.

Through its unique position as one of only very few labs granted the licensing needed to test cannabis, ATT is securing its future in the cannabis sector. With the addition Northern Vine Labs for research and products through Vergence, the company is also opening its services to a very broad spectrum.

As it stands, Abattis looks like it could easily leap frog the progress of the CanniMeds, Supreme Therapeutics and Lexarias in this space. While those have seen huge increases in value, Abattis Bioceuticals appears undervalued at a mere $24 million market cap.

ATT has diversified its operations into several segments, from research and certification in its testing and lab facilities, to formulations and extracts exclusive to Northern Vine Labs and to products provided by its Vergence subsidiary.

Although relatively new as a fully operational cannabis sector company, ATT has managed to bring together valuable assets and tripled its price since one year ago. With the early interest and pent up demand for services, Abattis Bioceuticals looks like a real potential leader as this sector continues its major momentum drive.

Potential Comparables

CanniMed Therapeutics Inc (TSX: CMED.TO) (CMMDF)

CanniMed Therapeutics Inc. is a Canadian-based, international plant biopharmaceutical company and a leader in the Canadian medical cannabis industry. CMED has an active plant biotechnology research and product development program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications. Its subsidiary CanniMed Ltd., was the first producer to be licensed under the Marihuana for Medical Purposes Regulations (MMPR), the predecessor to the current Access to Cannabis for Medical Purposes Regulations (ACMPR). The company also owns strategic assets to service the potential medical cannabis market in the United States.

Supreme Pharmaceuticals Inc. (TSX-V: FIRE.V) (OTC: SPRWF),

Supreme Pharmaceuticals, through its wholly owned subsidiary, 7ACRES, is one of the first 40 federally licensed Canadian producers of medical cannabis pursuant to the ACMPR. The company operates inside a 342,000 sq. ft. Hybrid Greenhouse facility located in Kincardine, Ontario. It is the largest facility of its kind to grow with advanced HVAC and C02 enrichment using the full-spectrum sun. The company has commenced its first sales of dried cannabis to Aurora Cannabis, possibly the largest and most trusted retail brand in the Canadian industry.

Lexaria Bioscience Corp. (CSE: LXX.CN) (OTCQB: LXRP)

Lexaria Bioscience has developed and out-licenses its proprietary technology for improved taste, rapidity, and delivery of bioactive compounds, including cannabinoids. Though boasting a wide range of health benefits, cannabinoids are traditionally poorly absorbed by the body's gastrointestinal tract. To achieve higher effectiveness, consumers usually default to smoking. Lexaria provides a superior administration method by delivering hemp oil ingredients - or through locally licensed partners, cannabis oil ingredients - through a patented process within food products.

For a more in-depth look into ATT you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/09/11/biotech-sector-poised-to-deliver-more-health-and-wealth-2-2-2

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