WHITEFISH, MT / July 15, 2014 / The North American medical marijuana market has experienced unprecedented growth over the past few quarters, driven by full legalization in both Colorado and Washington states as well as loosened restrictions in Canada as a result of that country’s newly implemented Marijuana for Medical Purposes Regulations (MMPR) program.
Investors seeking exposure to the multi billion-dollar marijuana market are seemingly presented with a multitude of options, but many companies in the space remain a long way away from significant commercialization. Cannabis Therapy Corp.
(OTC: CTCO), a development-stage company focused on the research, development, and commercialization of safe, all-natural, THC-free cannabinoid-based medicinal therapies and supplements, recently announced
the actual commencement of exploratory laboratory research aimed at the development of cannabis-based products to set the stage for near-term commercialization.
In this article, we’ll take a closer look at the company’s unique business strategy, existing hemp cultivation, and why their laboratory research could be a significant catalyst for the stock over the coming quarters.Research Driven Product Development
Cannabis Therapy’s researchers will initially focus on potential applications specific to inflammatory and autoimmune diseases, such as inflammatory bowel disease, arthritis, and psoriasis. After an astonishingly short lead time, the company is currently planning laboratory assays and experiments to study cannabidiol (CBD) and other cannabinoids from hemp.
Management is currently establishing a series of assays and models with the goal of developing a hemp-extract profiling platform to identify and characterize strains that are ideal for specific medical conditions. They also aim to determine the most cost-effective processes to manufacture consistently safe, high quality compounds under commercial conditions.
"Inflammation plays a significant role in a multitude of diseases and hemp based, anti-inflammatory products could potentially have widespread applications," said Cannabis Therapy President & CEO Dr. Soren Mogelsvang. "We have long held the belief that cannabinoids have enormous medicinal potential and are eager to apply our extensive R&D backgrounds in this critical phase of product development."
An important point to make in regards to Cannabis Therapy’s timeline to commercialization is that they plan on having their cannabinoid-based products available as an over-the-counter nutraceutical, which is a product class not subjected to clinical trial processes and this in itself assures much faster timelines to production and sales.
A major component that is sorely lacking in the marijuana industry is the lack of standardization of current product ingredients. As the industry stands today, high quality lab research is limited to companies like GW Pharmaceuticals (NASDAQ: GWPH) whose research is focused on FDA clinical trial work for the treatment of Epilepsy (Epidiolex(R)) and pain management in late-stage cancer patients (Sativex(R)).
An example of the current commercial fragmentation of the sector is that cannabis strains are identified through a litany of names, any of which could be made up on the spot or are simply borrowed from the latest cannabis cup headlines. Imagine if you had a headache while traveling to Chicago and went to get some Aleve, but you had no idea if that particular batch of Aleve was the same product that you have come to trust back home in Seattle, or if it was some cheap knockoff from overseas. Federal guidelines provide those assurances with pharmaceutical products, but not as yet with cannabinoid-based products, and this is something that Cannabis Therapy Corp clearly aims to address.
It is highly probable that future federal guidelines will be written to tackle the current regulatory ambiguity, which underscores the importance of early-stage high-quality research and product development. The research that Cannabis Therapy Corp aims to undertake should contribute greatly to the cornerstone of a growing cannabis knowledge base that will hopefully lead to treating this plant like the medicine it is.. By holding their laboratory research to the gold standards of current pharmaceutical practices, Cannabis Therapy Corp is aligning itself to be at the forefront of change leadership when the federal government updates their regulations.World Class Research & Development Team
Leading the research behind the company is a trio of world-class scientists.
President & CEO of the company is Dr. Soren Mogelsvang, who has a PhD in Biochemistry from Cambridge University, an MSc in Plant Molecular Biology from the University of Copenhagen, as well as having authored several patent applications, grants and publications.
Dr. Cohava Gelber has over 25 year’s of experience in the discovery and development of immune therapeutics and diagnostics for cancers, allergies, autoimmune and infectious diseases. Dr. Gelber has the honor of holding both a PhD and a MBA; this has led to a distinguished career with positions at Duke University, ImmuLogic Pharmaceutical Corp, and Molecular Discoveries amongst others.
Ms. Vered Caplan, who holds a variety of degrees ranging from a M.Sc. in bio-medical engineering (Tel-Aviv University) to a B.Sc. in mechanical engineering (Technion Institute) is currently the CEO of Orgenesis, Inc, a development stage company offering therapeutic technology as a treatment for diabetes.
The research team is fully qualified to determine the optimal yield, quality, and potency of different cannabinoid extracts, while simultaneously focusing on expanding the company’s intellectual property. This expansion of intellectual property as a commercially viable product mix is a key aspect of the company’s plan for a short-term path to monetization.Strategy
As we have mentioned above, the focus on research is aimed at supporting the development of pharmaceutical-grade, cannabis-derived products for the nutraceutical sector.
Nutraceuticals are nutritional or ‘functional foods’ that are demonstrated to have a physiological benefit or provide relief from chronic diseases and ailments. Nutraceuticals range from isolated nutrients, dietary supplements, and herbal products to specific diets and processed foods and beverages.
Once the company is able to establish scientifically validated assays, they plan on immediately establishing a twofold strategy including potentially partnering with existing product manufacturers. This strategy will allow Cannabis Therapy Corp to start driving revenues on a shortened timeline.
The company also has plans to produce their own line of proprietary products and to eventually become a vertically integrated organization, optimizing quality, consistency, cost, and ultimately unlocking shareholder value.
The added benefit of launching the product line as over-the-counter nutraceuticals allows for distribution in all 50 states. This is possible because the product is derived from the Hemp plant, which contains very little THC and is now able to be grown legally across the US with the passage of the 2014 Farm bill.Hemp Cultivation
Cannabis Therapy is supporting their research and development activities with its own partnered hemp production. On June 25, 2014, the company announced
that their initial crop of hemp cultivars are exhibiting normal growth characteristics and looking very healthy. These crops are being grown and managed by their experienced partners at Rocky Mountain Hemp Inc, and will be harvested in approximately 60-75 days.
"Working with a fourth generation Colorado farmer has provided us with a real advantage towards reestablishing the domestic hemp industry over many other growers … Given the pace of growth and potential yield of our crop, we currently believe this initial acreage will adequately deliver a regional source of natural, low-THC cannabinoids," added Dr. Mogelsvang in a separate press release.
What many people do not realize when discussing CBD products is that these can be based on hemp, which with its low THC level makes it possible to formulate virtually THC-free products rich in cannabinoids.
It’s also worth noting that Cannabis Therapy Corp decided not to wait for the field crop to mature and has already obtained a supply of analogous hemp material necessary to start their research, enabling them to jumpstart the process of developing their research protocols and initiating the modeling required to maximize their research efforts.Near-term Catalysts
The commencement of laboratory research represents one of the most important steps in bringing this type of product mix to market over the near-term, and sets the company apart from competitors in the industry like Cannabis Sciences Inc. (OTC: CBIS) or Hemp Inc. (OTC: HEMP). And for investors, nearer term results could translate to a greater present value for the company’s stock, particularly as the market realizes the potential.
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