I recently wrote about an increasingly popular but still mostly overlooked medical cannabis company that is innovating industry-leading transdermal and oral thin film drug delivery systems. (
https://stockhouse.com/opinion/independent-reports/2020/01/08/the-golden-bullet-for-drug-delivery). The company is called
XPhyto Therapeutics Corp. (CSE: XPHY) (FSE: 4XT).
By popular, I mean that more and more investors are getting on-board as the company’s share price has rallied about 40% so far this year, while North America’s best-known cannabis stocks have continued to trend either sideways or lower.
Business breakthroughs like this are establishing XPhyto as a pioneer on the global medical cannabis stage in solving two of the industry’s greatest problems – the inexact dosing of non-combustible cannabis products and the delayed onset of the therapeutic effects. The company’s buoyant share price suggests that investors are impressed with the company’s recent achievements on this front in Germany.
Now XPhyto is in the news again with another significant announcement, which read as follows:
“XPHYTO THERAPEUTICS ANNOUNCES STRATEGIC SUPPLY, IMPORT AND DISTRIBUTION AGREEMENT FOR THE GERMAN CANNABIS MARKET”
This importation/supply agreement offers XPhyto an early-market entrant competitive advantage in its mandate to be a standout brand throughout Europe in the emerging medical cannabis extracts market.
https://www.xphyto.com/wp-content/uploads/2020/01/200127-XPHY-PR-re-PCLO-Supply.pdf
Much like the rest of the Western world, European attitudes toward cannabis consumption have changed dramatically in recent years. Medical legalization is being adopted by most European nations and the writing of medical prescriptions is rising exponentially, especially in Germany.
Research by cannabis data experts, Prohibition Partners, has shown that Europe’s cannabis market is estimated to be worth up to €123 billion by 2028 and that Germany is already a major driver of this accelerating continent-wide growth.
(
https://prohibitionpartners.com/reports/#european-cannabis-report-fourth-edition).
XPhyto’s CEO Hugh Rogers is excited about his company’s opportunity to become a key importer of cannabis oil distillate, which will be extracted into formulated medicinal cannabis products, such as his company’s transdermal films, as well as other “finished” (value-added) products.
He says, “XPhyto has prioritized near-term revenue generation by way of import and distribution of medical cannabis products into Germany as a key corporate initiative for 2020 and beyond.
“Assuming all necessary regulatory approvals are in-place, Xphyto plans to commence the commercial import of cannabis oils and isolates in mid-2020 with a three-year minimum sales target of approximately 30,000 kilograms for a full range of extracted products. They include 99% pure CBD and THC isolates, broad spectrum CBD oils, and full spectrum THC oils.”
In terms of the big picture, the sale of 30,000 kilograms worth of extracted oils and isolates in the form of finished products could represent a very big payout with high margins for XPhyto for many years to come.
Having only listed publicly in August 2019 with a modest market capitalization and having navigated the recent downturn in public cannabis stocks remarkably well, XPhyto is now trading near its all time high. This is no doubt due to the bright prospects for its high-margin, technology-driven extracted medical cannabis products in Europe, especially Germany, which is expected to become the world’s largest medical cannabis market.
In early 2020, investors should look for value creation through more joint ventures and other high-impact initiatives to firmly establish XPhyto as an early-market entrant is a number of key market segments in Germany.
https://stockhouse.com/news/newswire/2019/08/23/xphyto-why-germany-right-place-right-time)
This includes the powerful competitive advantage of being one the first companies to be set up to import EU-GMP-certified cannabis oils at scale. This could go a long way towards alleviating Germany’s current shortages of pharmaceutical-grade medical cannabis oils. And it is an unprecedented opportunity for XPhyto to establish itself as a dynamic industry leader and innovator in Germany’s embryonic cannabis industry.
Keep an eye on XPhyto. It is already proving by far to be one of the best-performing cannabis companies in the capital markets so far this year. And the advent of plenty of positive news flow in 2020 should continue to build considerable real value into XPhyto’s ascendant share price.
ABOUT THE AUTHOR: Marc Davis has a deep background in the capital markets spanning 30 years, having mostly worked as an analyst and stock market commentator. He is also a longstanding financial journalist. Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, The Times (UK), Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post, AOL, City A.M. (London), Bloomberg, WallStreetOnline.de (Germany) and the Independent (UK). He has also appeared in business interviews on the BBC, CBC, and SKY TV.
Marc also owns shares in the companies that he writes about and his commentary reflects his enthusiasm for the companies that he covers.