After a week of putting the boot to a company that was making promises I (still) don’t think it can deliver on, was great just now to sit down with a company that plans to keep things manageable, smart, professional and potentially extremely profitable.
Meridex Software (
TSX:V.MSC.H,
Stock Forum) isn’t a company we’ve written about much since they switched into the ganjasphere, mostly because there wasn’t much of a plan to hang on to and nobody really knew who they were.
But as of the opening of trading Wednesday, Meridex becomes Cannabis Technologies Inc, jumps to the CSE, and hits the ticker symbol
C.CAN.
And it does that with a business plan that, unlike many in this sector, seems to have all the pieces in place.
GW Pharmaceuticals
(NASDAQ:GWPH,
Stock Forum) is a $2b market cap company on the NASDAQ. It's a beast in the space. And Cannabis Technologies is looking to run off their bow like a pilot fish tagging a Great White.
They’re not legitimizing a Langley grow op. They’re not setting up a lab. They’re not branding a range of infusers and inhalers or trying to become the Paypal of weed or selling weed vending machines that can’t legally contain weed.
They’re going pharma.
Now, before you start mumbling about eight year timelines to production and endless phases of drug testing and millions of dollars to set up huge research facilities and nine-month periods without news releases, take a step back and listen up because I’m about to lay some sage wisdom on you.
Cannabis Technologies is, essentially, Sazzad Hossain. You may recall him as an advisor to Affinor Resources (
CSE:C.AFI,
Stock Forum), and formerly the Group Leader of In Vivo Pharmacology at the National Research Council of Canada Biotechnology Research Institute.
Hossain has developed a "
Cannabinoid Drug Design Platform" that “allows bioinformatics tools to identify individual chemical compounds from the cannabis plant which can be targeted to develop therapies for specific diseases and conditions.”
What does this mean in layman’s terms?
You know the four years it takes, say, GW Pharma to grow, isolate and identify chemical compounds in medical marijuana so that it can then start pre-clinical trials in the hope that it can then move to Phase I clinical trials on its way to a three-phase process to actually get permission to get a drug to production over, say, 15 years or so?
The Cannabis Tech platform, according to Hossain, will utilise existing knowledge with some proprietary tech to get you to Phase I in 12-18 months.
Investors lover pharma plays because they make bank (should they get through the decade plus of clinical trials unscathed), but they take so long to come to fruition that they can make developing a rare earths mine seem like a fun thing to do over a drunken weekend.
Cannabis Technologies’ plan is to use that platform to isolate compounds they can direct at a specific ailment, then outsource the early stage research and trials to third party labs to get to Phase I quickly and inexpensively, without forking out huge bucks to set up their own pharma facility.
From that point forward, they’ll shop it to Big Pharma to take from there.
Still confused?
In short: They’re going to rocket through the early part of a drug’s development on the cheap, using a platform only they have access to and knowledge others spent big money developing over several years, raising maybe $2-3m in a private placement in the coming months which should cover operational costs right through to proof of concept in around 18 months. From there? The highest bidder gets to run through Phase II.
The platform also allows the company to run more than one product through the pipeline, through multiple third party research partners, so they can walk and chew bubble gum at the same time. Unlike most biotech plays, which are all-in on one product trial and can crash at any stage if approval is delayed or denied, Cannabis Technologies can be running a deep playbook of products from one small office, without massive overhead and machines that go ‘bing’, and because Hossain is an advisor to Affinor Resources, both of those companies can exploit synergies to benefit each other from the tech in both directions.
Let’s be clear: I’ve liked Affinor for a while now, and part of the reason why has been they have gathered several guys like Hossain to their team.
But in Cannabis Technologies, you get Hossain concentrate.
They’re jumping from the TSX to the CSE to keep costs low, they’re expecting an OTCQB ticker this Friday, with any luck, so the American investor crowd will have access to them, and the licensing fee potential alone once the company proves the worth of the platform would be worth the price of admission.
I want to be clear here – Cannabis Technologies is a Stockhouse Publishing client, so by all means be a cynic and assume we’re in the bag for the company if you want to.
And it’s likely that a large segment of the dot.bong world will not have a lot of interest in a company that could take 18 months to pop, when it’s getting 1200% returns on companies that want to make weed-flavoured Red Bull.
But I sat with these guys for two hours and pressed them hard on detail and did not find them wanting. No questions dodged, no ‘we hopes’ or ‘with any lucks’ or ‘biggest in the world’s.
I asked, straight up, is there any aspect of this platform that is undeveloped or uncertain or you hope will do what you want or is dependent on something else happening… the answer was “No. It works. It is 100%. This is a tool that does what we say it does.”
I would love to say a lot more than I have here, but there’s a LOT of proprietary information in this platform that I can’t talk about publicly right now. I’ll just say this: It’s really quite a simple idea that only a handful of people have the experience to put together, and Hossain is one of them.
And CEO and President Craig Schneider, a 15-year mining man, got him (and the platform) cheap – for 4 million shares at around $0.30.
Here’s where it gets interesting: Right now, there are only 36m Cannabis Technologies shares out there and an $11m market cap. Assume that might rise to 50m shares out in the private placement with no further dilution necessary for the next few years and you’re looking at a tight little unit that will stay tight until it has proved its potential.
This is not a company that’s going to get people high. This is a biotech company in the plainest sense, one engineered to skip a lot of the slower and more expensive parts of that world.
No distribution chains to worry about. No heavy operating costs. No exorbitant set-up. No promises that require the roulette wheel to hit black five times to pay off.
I don’t bang the drum for many companies. I’ll bang the drum for what I’ve seen of this one. It lists on the CSE tomorrow.
IN OTHER NEWS:
Windfire Capital (
TSX:V.WIF,
Stock Forum) is trade halted “
at the request of the company pending news.” Windfire is the company that
got into some stickiness with the lease on a grow facility a few weeks back. No insight beyond that.
Green and Hill Industries (
OTO:GHIL,
Stock Forum) continues to roll out dba Ross’ Gold CEO Ross Rebagliati
to anything where a person may be standing.
They’ve done a deal with cannabis.ca to get
Rebagliati content prominently featured, which is actually a decent bit of cross promotion. Added bonus: The two press releases the company put out today and Friday were decidedly free of claims to be the world’s best everything.
The market cap is still nutty and they have a long way to go to prove concept, but the branding play they’re enacting doesn’t suck and the market responded positively to the new grown-up news release strategy, something that hasn’t happened for some time.
Also, management and I have spoken briefly on Twitter and they took no (public) issue with me calling them out on their over-promotion last week, nor on my positioning Rebagliati as a D-list celeb who should be stuck in a back office with a bag of cheesies and an apple core bong and not let near the news releases.
“Thanks for the coverage,” was where they respectfully left it.
Always happy when a company take criticism well and improves their game as a result.
Creative Edge Nutrition (
OTO:FITX,
Stock Forum) is in free-fall right now. CEO has been put in cotton wool after
tangling with me last week. For the last five trading days, the company has opened trading down 5-10%. Some are pontificating that insiders may be dumping shares, but that’s pure speculation. We did hear from the CEO that the majority of the paper that is coming free-trading this month, and there’s a lot of it, is in the hands of his friends and family. He says they’re strong hands. No indication they’re not, but someone is dumping from go every morning.
Either CEO Chabaan has a problem keeping his family strong in the face of a share tumble, or the company is being hit by big time shorters. Either way, it’s a horror show at the moment.
FITX’s board announced they would cease allowing Chabaan to post updates to the company Facebook page earlier this week, though the company posted an open letter to the SEC from Chairman of the Board John Germinario today, taking it to task for warning investors against gambling on weed stocks.
From
the letter:
While I am not a proponent of the OTC markets, it is the least resistant means of public trading in the United States Capital Markets and represents an opportunity for securities fraud to exist however, the targeting of Marijuana based investments as described in the Commissions recent submission to investors has unilaterally fueled paid stock bashers and other fraudulent activity to further exacerbate the demise of company's and investor values for self profit. The investor alert targeting the Marijuana industry has caused my company's share price unjustifiable reduction of over 50% in a few days. This is unacceptable!
[…]
During the past 5 weeks of my appointment as Chairman, I have uncovered a serious level of securities fraud from the help of current shareholders of several of the industry's company's of which my team is preparing Whistleblower claims to be submitted to the Commission.
Heady stuff. One wonders if pressing the SEC’s buttons is a smart business decision in light of that groups’ tendency to trade halt anything that moves in the MMJ space, but clearly management needs to do something to level off the tumble.
Meanwhile, video of the town council of Lakeshore deliberating FITX’s plans has emerged, and it doesn’t appear they’re all that happy. Company is “pushing the envelope” according to one participant.
See more here.
I continue to get email from all quarters about the Creative Edge situation, with some damning me for what they consider bashing and (many) more offering their insight into why they think the company is teetering and/or saying it was due.
I’ve said a few times, I think the company has a business under the covers. A good little business that can emerge and grow, at that, if it isn’t over-promoted to the point of silliness.
But it’s not at the point where I’d see it as value just yet, mostly due to all that paper dropping and the company’s inability to finance through its sharebase. The share price is now under $0.05, which puts it in a place where a consolidation may be necessary to stem the bleeding, which would mean going to the shareholders for a vote, which would probably include a request to expand the shares allowed.
But that needs to happen. CEO Chabaan is just too tied down right now to properly fight back against a concerted short attack.
Papuan Precious Metals (
TSX:V.PAU,
Stock Forum) is doing a lot of business on the
mining end of their company, presumably to keep the TSX Change of Business gnomes at bay.
Supreme Pharmaceuticals (
CSE:C.SL,
Stock Forum) has gained the big mo-mo from the ‘I want to own a grow op’ crowd, ramping up a nice share bounce as they rolled out a grow op tour for the hoi polloi.
Growlife (
OTT:PHOT,
Stock Forum) showed
substantially increased revenues, up 213% year over year in Q1, to $2.3m. Gross profit up 108%, or $270k. So why is the stock down? More
class action lawsuits,
regulators cracking down on weed stocks on the OTC, customer challenges in terms of getting credit and banking, and, well, a $56m market cap that was a $560m market cap two months ago and that is still probably inflated going by current profits. The company may need to spend some dough defending itself legally in the months ahead and is in a terrible place to be raising money to do so. Down 12.3% today.