Canntab: All about the Cannabis Pill

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.




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