Posts, updates and videos about cannabis – updated automatically.
I have a new article on the Canadian Cannabis market and the idea of adding value in the marijuana space up at Seeking Alpha.
Go read the whole thing here.
I like Anthony Durkacz. I’ve interviewed him several times for motherlodetv.net and he is very straightforward and tells the HUGE story well.
This is a long Q&A interview with questions coming from the viewers. Grab a cup of coffee and watch the whole thing.
An interesting chart with the top performing cannabis stocks of 2018:
We’d like to congratulate our client FSD Pharma (C.HUGE) for a strong second place finish and our client Canntab (C.PILL) for an excellent fifth place overall performance.
Reality has set in for the cannabis space. Strong management, a serious vision and an international outlook are all factors which will propel cannabis stocks to new heights in 2019. Just growing pot is not going to be enough. There has to be a real value add and a real sense of where cannabis is going in the next decade.
The pharma side, with its promise of serious, cannabis-based medicines seems to us where the real growth opportunities lie.
*Check out today’s HUGE press release: FSD Pharma Completes Harvest and Passes Analytical Testing of Second Lot
While you are at motherlodetv.net…check out Yukon Gold explorer White Gold’s CEO David D’Onofrio’s Q&A on its Betty discovery.
The Canadian Cannabis market peaked – using the Canadian Marijuana Index – in early January of 2018. The Index topped 1000. It dropped a bit from there and, the Monday before legalization on Wednesday, October 17, touched 858. The index is now hovering around 500. Reality has caught up with the recreational marijuana business and the market caps of many of the producer stocks are adjusting downward to reflect that reality.
However, legalization was not just about recreational cannabis and large-scale grow shows. Legalization also created a framework in which innovative companies could work towards scientifically sound cannabis medicine.
While some producers saw the “pharma” end as an “add-on” to supplying the recreational market, other companies like Canntab Therapeutics (C.PILL) entered the cannabis space with strong bio-medical credentials. For these companies, legal cannabis offered the opportunity to explore a whole new family of molecules which, up until legalization, had very little serious research done on their medicinal potential.
“We grew from an earlier life sciences company,” said Richard Goldstein, Canntab’s CFO. “That company licenced two non-cannabis extended-release drugs to a large US pharmaceutical company.”
As suggested by its ticker symbol, PILL, Canntab understands how to make tablets and capsules to deliver the various molecules which can be extracted from cannabis. This is no small thing. Because marijuana was illegal, research into its potential medicinal properties was difficult if not impossible. That meant that the nuts and bolts of drug delivery are not well understood in the cannabis business. Basic things like dose control are being invented from scratch by some of the Canadian Cannabis companies.
Canntab enjoys a huge head start. It already knows how to make pills and capsules. It has scientists working for it who have spent their careers dealing with dose control.
In a recent shareholder update Jeff Renwick, CEO of Canntab, stated, “Canntab is leveraging its first mover advantage and developing an important IP portfolio to actively pursue other high-level discussions for partnerships with industry leaders. CBD and THC in tablet form is an important category with few worldwide players at this time and Canntab believes that it is well positioned to build significant shareholder value by aggressively pursuing these opportunities.”
That first-mover advantage means that Canntab is ideally positioned to act as a contractor to cannabis companies which want to offer products like cannabis oil in capsule form. As Goldstein puts it, “A lot of the big guys are contracting out oils.”
Perhaps the best news for PILL investors contained in the update is that the company has a strong intellectual property portfolio with 13 patents pending in the United States and Canada pertaining to the formulation of tablets including instant release, extended release, flash melt and bi-layered. The products will be available in 2.5mg, 5mg and 10mg tablets.
“We’re preparing to file with Health Canada for instant release tablets,” said Goldstein. “This is just one of the many products Canntab is able to produce.”
Essentially, Canntab will be able to offer varying levels of THC and CBD in tablet form. So, for example, a particular person may need an all CBD formulation in an extended release form and another may want an instant release of THC with an extended release CBD. Canntab can make those pills in various micro doses.
“Right now we’re looking at 9 SKUs per product,” said Goldstein. “But we also are only able to sell through a Licenced Producer or a Licenced store. And we need Health Canada approval on the products.”
That Health Canada approval means that each of the potential products has to go through independent third-party testing. Which, even though it is essentially confirming that the PILL product is what it says it is, takes time.
Which may be frustrating for Goldstein but it is a part of the medicinal marijuana business. So is the fact that cannabis based products, at the moment, can only be sold through Health Canada licencees.
These are bumps on the road for Canntab. The company is well funded and is entering into agreements with licenced producers to provide technical expertise and pharma experience. It is also looking abroad. Canntab signing of a non-binding Letter of Intent with NewCanna S.A.S of Bogota, Colombia for the establishment of a significant bi-lateral relationship covering the sale and distribution of Canntab’s products in Colombia, Chile, Paraguay and Spain with a one-time, non-refundable license fee ($2 million US) payable to Canntab by NewCanna. Along with the cash, the Colombia deal gives Canntab exposure to Columbian marijuana growers. Growing marijuana in Colombia makes a lot of sense because the plant can be grown year round without power-hungry lights.
Coming at the new world of legalized Canadian cannabis from a pharma background means that Canntab brings an entirely different set of skills to the table. In a crowded market, those skills set Canntab apart. While everyone else is growing cannabis, Canntab is already on the road to creating high value-added medical products.
The Financial Post has an excellent article on cannabis IP. It’s long, but here’s a quote,
“I don’t think the industry has fully embraced the role that intellectual property of the cannabis plant will play in the next phase of growth,” said John Kagia, chief knowledge officer at New Frontier Data, a cannabis-focused data and analytics firm based in Washington, D.C. “For so long, there had been so little research on the plant. Now we’re seeing many products that are too similar across the market. Companies that secure unique IP first will have a competitive advantage.”
In a recent conversation with FSD Pharma (C.HUGE) Founding Director Anthony Durkacz, the intellectual property potential of cannabis was front and centre.
“We’re staying with the pharma/medicinal model,” said Durkacz. “Our takeover of NASDAQ listed Therapix Biosciences is one step. We expect a lot more action.”
“Where’s the action?” asked Durkacz. “We think cannabis biotech.”
Durkacz does not dismiss the recreational marijuana market but notes, “Recreational was just not ready on October 17,” said Durkacz. “The government needs more product. Quebec stores are operating three days a week because they can’t get supply. Alberta is sold out.”
HUGE would like to help. But it, like many other Canadian cannabis companies, is waiting for the “sales licence” it needs to legally sell its product. [As I write this, FSD Pharma has announced that it has received its sales licence.]
“We have a dedicated focus on indoor growing,” said Durkacz. “In the recreational market, the results to date show that the highest prices per gram are being received for top quality, indoor grown, product. It’s what sells the fastest and there is a very limited supply.”
That limited supply is something FSD Pharma wants to change. “Our build partner, Auxly, is full steam ahead building out our Coburg facility. Right now we have 25,000 square feet built and licenced. We have four grow rooms in production and with our recent expansion licence will add another 4 grow rooms by the end of the year.”
The business challenge is that while legal recreational pot is scarce a month out from legalization, that situation is not likely to last long. While the Canadian grow industry was not ready for October 17, there is little doubt that supply will meet demand in Q1 of 2019. Then what? [Durkacz says, “It will go longer than Q1, it will be sometime end of 2019.”]
“The market caps of the straight producers,” said Durkacz, “will be hard to maintain.”
Which is a very polite way of saying that straight producers will face very stiff, very smart, competition in a market which will go from scarcity to glut in a matter of months. Putting all a company’s eggs in the recreational marijuana basket is a potentially disastrous move if, as predicted, and demonstrated in the US, the wholesale price of marijuana, even indoor grown marijuana, is driven down by competition and oversupply.
“We’re committed to pharma,” said Durkacz. “The real action is going to be on the medicinal side. The discovery of treatment and cures.”
Durkacz is referring to the huge potential of cannabis as a source of active agents which actually cure disease and treat symptoms. Because cannabis has been largely illegal until very recently, very little research has been done on exactly what cannabis and its derivatives can do to alleviate disease and chronic conditions. The research has been, effectively, illegal.
While there has been a great deal of anecdotal evidence about how cannabis, and molecules derived from cannabis, have helped people, the actual science is very minimal. In fact, the whole “medicinal marijuana” meme has been a stalking horse for legalization, not for medicine. Simple, but basic issues such as dose, strain, and actual molecules have not been addressed with any sort of scientific rigour. FSD Pharma wants to change that. And Durkacz sees the resignation of US Attorney General Jeff Sessions and Trump’s wanting to win the next Presidential election as keys to the legalization of medical marijuana at a US Federal level.
“Right now, 34 of 50 US states are legal for medicinal marijuana,” said Durkacz. “There is a polling majority in favour of legalization. Trump needs an issue and legalization might be that issue.”
If there is even a hint at federal legalization of cannabis for medicinal purposes, marijuana stocks which trade in the US will soar. “If cannabis is legalized for medicinal purposes at a federal level,” said Durkacz, “it will be like the Internet in the nineties.”
“We want FSD Pharma to be positioned for that,” said Durkacz. “We want to own valid IP, legitimate pharma. We want to use industry experts to build an exciting portfolio of molecules.”
“There are very few experts on the science side,” said Durkacz. “Because, up until now, even the research has been illegal. We’re uniquely positioned.”
Today’s announcement of the appointment of David Urban, a well-respected Washington Republican lobbyist and Trump campaign mensch, to the HUGE Board of Directors, is a big step forward for FSD Pharma as it approaches the US cannabis market.
In the release Durkacz is quoted as saying, “Our vision for FSD Pharma to become a global leader in medicinal cannabis is beginning to solidify. David’s legislative acumen will be of vital importance as we embark on a quest to affect the conversation on this very important topic in the US capitol.”
In this same release HUGE Co-Founder and President Zeeshan Saeed said, “David’s joining the Board as an independent Director is an important milestone for the Company and we welcome his expertise in advancing education and awareness about the potential contribution that cannabinoids can have in addressing the opioid epidemic.”
Urban has the sort of political ability which any company seeking to enter the US cannabis market absolutely needs to guide it through the regulatory swamp lands of Washington, DC.
HUGE is looking to the US market as both a growth area for cannabis pharma but also as the very best place to list a cannabis driven stock.
“Right now, we’re in the process of being listed on the NASDAQ,” said Durkacz. “There are different ways it can be done and we’re looking for the best option from a regulatory and a tax perspective. But we’ll be listed in the next five months.”
There are two scarcities in play here. First, investable, US-listed cannabis shares. Second, the scientific talent to develop a portfolio of cannabis-derived, pharmaceutical, products which meet the health needs of ordinary people. In many ways, the scientific talent is the real bottleneck. There are just not that many scientists with much experience with the molecules you can derive from cannabis and even fewer who can create, develop and test those molecules as drugs.
Through acquisitions and alliances, HUGE is aiming to build out its pharma molecules portfolio and become an industry leader in real medicinal cannabis.
It is also deadly serious about being listed on the NASDAQ so that when real research into cannabis biotech becomes legal in the United States it will be positioned to take on the 1990’s Internet levels of investment Durkacz foresees.
There are a lot of reasons to be delighted that Trump has fired his do nothing Attorney General. From the Canadian cannabis sector’s perspective, Sessions was a major road block to federal legalization efforts. Given the size of the potential US market as well as the difficulties created by the federal law in terms of investment, reasearch and even cross border travel, federal legalization would be a huge plus for the Canadian cannabis industry.
FSD Pharma (C.HUGE) Director, Anthony Durkacz discussed US legalization on The Midas Letter:
MGX Minerals Inc. (“MGX” or the “Company”) (CSE: XMG / FKT: 1MG / OTCQB: MGXMF) is pleased to announce its wholly owned subsidiary ZincNyx Energy Solutions Inc (“ZincNyx”) has signed a Strategic Partnership Agreement with Braingrid Corporation (“Braingrid”) to co-develop and market a packaged energy management product offering for the cannabis cultivation market. The partnership will leverage Braingrid’s software and technology, which uses proprietary sensing and control hardware and ZincNyc’s modular energy storage systems, which provide scalable regenerative zinc-air flow battery for mass storage of energy, to provide cannabis cultivators with renewable solutions for cultivation. ZincNyx and Braingrid have agreed to sign a Definitive Agreement within the next 60 days.
As noted by Braingrid, cannabis cultivation sites are growing exponentially in cultivation square footage. The electrical grid is incapable of supplying the demand or storing excess renewable production, especially in rural areas. Ideal cultivation zones which have inexpensive land and low community impact do not have access to the electrical grid to support the operation. Energy efficiency is too complicated and costly but at the same time, low cost energy solutions are required. Cannabis cultivators intending to survive the upcoming oversupply and the resultant “race to the bottom” will need to become extremely rigorous in reducing the cost per gram. Therefore, cultivators who have a fiscally driven understanding of their energy “footprint” and are independently autonomous from utility market prices through local storage and cogeneration will ensure their viability now and into the future.
Cannabis cultivation and energy facts:
- Cultivation is very energy and resource intensive:
- Most growers/operators are unfamiliar and disconnected with energy pricing and unfocused on energy efficiency due to high market cannabis prices.
- New laws are emerging in certain geographies which mandate farmers/cultivators employ real-time monitoring of water/electricity use.
- There are many government and utility incentives available to encourage a reduction in environmental impact.
- Electricity prices range from ~7￠/kWh(CAD$) to more than 15￠/kWh(CAD$) with more than ⅔ of cannabis cultivators paying ~14￠/kWh(CAD$) base. Peak demand charges greatly increases these costs.
- Electricity prices have outpaced inflation however renewable energy sources are mostly par with conventional energy sources (i.e. natural gas)
- Cultivators will be forced to utilize on-site cogeneration and peak shaving technologies such as solar, diesel, gas turbine (syngas/natural gas) to offset energy costs and make up for the utility grid stability.
- Energy overproduction often occurs for solar systems requiring energy storage for maximum benefit
Braingrid Executive Team
The Braingrid team is made up of a diverse group of executives and engineers including founder and CEO Michael Kadonoff, who previously worked as a professional hardware designer at General Electric Grid IQ on the premier design team for energy grid automation and control products. President & COO Matthew Skynner has over 25 years of high-tech experience, including leading a global, $1B technology business as Corporate Vice President and General Manager at AMD.
Braingrid Corporation is a global technology company that provides an affordable, versatile and quick-to-install cannabis cultivation intelligence system. Braingrid captures real-time data needed to increase revenues, reduce costs, risks and energy while connecting cultivators to their grow on a microclimate level.
About ZincNyx Energy Solutions
ZincNyx has developed a patented regenerative zinc-air flow battery that efficiently stores energy in the form of zinc particles and contains none of the traditional high cost battery commodities such as lithium, vanadium, or cobalt. The technology allows for low cost mass storage of energy and can be deployed into a wide range of applications.
Unlike conventional batteries, which have a fixed energy/power ratio, ZincNyx’s technology uses a fuel tank system that offers flexible energy/power ratios and scalability. The storage capacity is directly tied to the size of the fuel tank and the quantity of recharged zinc fuel, making scalability a major advantage of the flow battery system. In addition, a further major advantage of the zinc-air flow battery is the ability to charge and discharge simultaneously and at different maximum charge or discharge rates since each of the charge and discharge circuits is separate and independent. Other types of standard and flow batteries are limited to a maximum charge and discharge by the total number of cells as there is no separation of the charge, discharge and storage components.
The ZincNyx mission is to provide cost effective, long duration and reliable energy storage systems for markets involving renewables firming, peak shaving, diesel generator replacement, telecom facility back-up, electrification of ferries and tug boats and electric vehicle charging support. With a portfolio of 20 granted patents and an experienced management team, ZincNyx has begun mass production (see press release August 9, 2018). To learn more about ZincNyx technology visit www.zincnyx.com.
About MGX Minerals
MGX Minerals is a diversified Canadian resource and technology company with interests in global advanced material, energy, and water assets. Learn more at www.mgxminerals.com.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking information or forward-looking statements (collectively “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: “believe”, “expect”, “anticipate”, “intend”, “estimate”, “potentially” and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the Company’s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the Company’s profile on SEDAR at www.sedar.com.
Contact Information Jared Lazerson President and CEO Telephone: 1.604.681.7735 Web: www.mgxminerals.com
In the wake of FSD Pharma (C.HUGE) stunning all share takeover of NASDAQ listed Therapix Bioscience there is some analysis posted at Seeking Alpha.
You can read it at A HUGE step forward
Anthony Durkacz is just fun to watch.
Here he is on The Midas Letter.
A good, short, video overview of Cantab Therapeutics (C.PILL) on Investment Pitch.
Canntab has developed an extended release cannabis delivery system, a hard pill, which allows the dosage of cannabis products to be controlled precisely. It is a patentable technology and critical for the effective medical use of cannabis and cannabinoids in therapeutic settings.
The company has achieved a full-on licencing arrangement with a company in Colombia which will mean that Canntab’s products will be distributed in Colombia and a number of other Spanish speaking markets. As part of this arrangement, Canntab will receive an initial payment of 2 million US dollars. Hard cash for real intellectual property.