"We are moving rapidly ahead in a sector where seemingly benign therapies, such as fish oils, can become billion dollar brands in very short order," said Cannabis Therapy Corp. President & CEO Soren Mogelsvang. "We have no intention of underestimating the potential value that cannabinoids can mean to both the medical community and to the public at large."
Cannabis Therapy differs from many other publicly traded cannabis companies, like GW Pharmaceuticals plc (NASDAQ: GWPH) or Cannabis Sciences Inc (OTC: CBIS), in that it is focusing on nutraceuticals rather than pharmaceuticals. In contrast to pharmaceutical drug development’s lengthy, high risk, and expensive pathways to commercialization, the company’s nutraceutical approach aims to shorten the regulatory process and significantly speed up the commercial timeline.
In particular, the company plans to work with hemp, a low THC cannabis variety that is free of the psychoactive effects associated with marijuana and can be legally grown in several states under the recently passed Farm Bill. Long-term, the company aims to develop new, proprietary hemp strains with improved medicinal potential. With its planned ISO-compliant extraction and characterization processes, the company targets strict quality control and manufacturing standards, which aims to eventually benefit end-users across the nation.
The company may also offer laboratory purification and testing services, along with third-party product development, to a select group of industry partners in the future. By working with other groups, management could further expedite the commercialization of innovative, new cannabis-based nutraceuticals. The larger portfolio would also reduce any risks associated with individual products.
The hemp plant, which can be legally grown in many states, contains over 450 different compounds offering significant medicinal benefits without any meaningful psychoactive THC content. Cannabis Therapy plans to leverage these substances to create a diverse portfolio of nutraceutical products. By protecting the resulting innovations with patents, the company could build a sizable IP portfolio within the industry. This dynamic could create licensing opportunities in the future, particularly as cannabinoids and related substances become more widely accepted.
"Nixon Peabody has strong experience in the pharmaceutical sector and in the development of new intellectual property," added Dr. Mogelsvang. "We look forward to working together to advance our business objectives."
Cannabis Therapy has been moving quickly to execute its business plan and move closer to commercialization. In may 2014, the company signed a commercial agreement providing an exclusive land lease and crop management services with Rocky Mountain Hemp Inc. in Springfield, CO. The agreement is aimed at growing the hemp necessary to create its line-up of THC-free, cannabis-based nutraceuticals.
"This is a major step forward and a key component of our strategic plan to become a vertically integrated manufacturer of safe, pharmaceutical grade cannabinoid products," said Dr. Mogelsvang in a prior press release. "It is critically important that we control the cultivation and processing of our crops, and we are extremely pleased to partner with Rocky Mountain Hemp Inc."
The vertically integrated nature of the company’s operations mitigates other key hazards, such as supplier issues associated with hemp sourcing. By owning its own supply chain, from seed to sale, shareholders benefit from lower overall costs, potentially higher margins, and reduced risks. These factors make the company worth watching over the coming quarters as management executes its plans.
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SOURCE: Emerging Growth, LLC