Canada’s flourishing cannabis industry is already having one desirable effect: the country’s research around cannabis is booming and it’s expected to have long-term impact on everything from farming to new medicine.
Cannabis companies helping to fuel the new research and development include Aurora Cannabis (TSX: ACB) (OTC: ACBFF), Aphria Inc. (TSX: APH) (OTC: APHQF), Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF), and Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF).
Canada, which has taken the early lead in the move towards legalization of marijuana, has created another booming industry that is applying hard science and rigorous review to the effects and potential solutions offered by marijuana.
Initial research has led to more and more need for data and is driving massive investment, most of it coming by way of the companies leading the charge to produce medicinal and recreational pot.
Some of the first-movers have also incorporated research and laboratory testing as a part of their integrated approach to developing cannabis operations. Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF), based in western Canada, has been gathering momentum by incorporating research, Health Canada approved licensed testing and extraction development. Abattis is right on the leading edge.
Licensed producers are also adding to the knowledge base by funding development of strains, optimization of CBD and THC, and research into potential health remedies. The major players include Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF), now the largest LP and cannabis company, Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), which follows as a close second in growing capacity and Aphria Inc. (TSXV: APH) (OTC: APHQF), an established LP that supplies medical marijuana and has experienced strong growth in 2017.
AN INDUSTRY SEEKING ANSWERS
With the legalization of recreational pot looming next year, and the massive expansion of licensed medical marijuana producers, leading Canadian scientists say more organizations are turning to researchers for help growing better plants.
Recently, a team of two environmental science professors and a graduate student at the University of Guelph, Ontario, published a research paper about optimizing the growth of medicinal cannabis indoors.
The study looked at the rate of organic fertilizer in soilless products holding cannabis before it flowered and the optimization of tetrahydrocannabinol — the primary psychoactive part of cannabis — and cannabidiol, which is already under investigation as a potential treatment for certain forms of epilepsy.
"There is hardly any scientific information on how to produce these plants and now there is so much interest in this area," said Youbin Zheng, who led the study funded by a licensed medical marijuana producer, as well the federal government.
Zheng and his team say that their study is the first of its kind and the first of many to come.
BUILDING ON ANECTODAL INFORMATION
It’s hard to imagine with the hyper-focus on marijuana, but there is little clear data in all areas of cannabis, from cultivation to quality control.
Zheng’s fellow researcher Mike Dixon says, "Much of the work now is largely based on anecdotal (information) from people who think they have it all figured out and did all their research in their basements".
The idea now, Dixon explains, is to take the medicinal marijuana world from the backwoods to pharmaceutical-grade production.
Dixon has been part of pioneering research into the growth of plants in space. He is now applying that knowledge and technology to help grow better medicinal marijuana.
This is a perfect example of how researchers are using their research funding coming in from cannabis companies for vital work.
"I'm shamelessly taking advantage of the cannabis industry sector's investment," he said.
"The bottom line is we're developing technologies that will allow Canadians to exploit production systems in harsh environments."
THE FUTURE RELIES ON R&D, AND TESTING
It seems that the cannabis industry will have a lot of money to contribute to R&D.
Even at this relatively early stage, the sector is experiencing nearly unprecedented growth. The value being generated as a result is exceptional – heading for CAGR projected as high as 25% through 2025.
The global cannabis testing market is expected to grow at a CAGR of 11.5%, culminating towards a $1.42 billion market by 2021.
This makes sense, since in order to deliver on the anticipated bigger volumes, producers will need accurate readings of the drug’s potency, including the levels of the key medicinal components of cannabis, THC and CBD.
Producers all recognize that this will require a skilled and specialized third party to test their product before it goes to market.
This is right in Abattis Bioceuticals’ wheelhouse.
The company is built around a full spectrum lab and expert staff to ensure the quality standards now being demanded. It also facilitates the company’s ability to innovate methods to extract medicinal components from cannabis on a massive industrial scale, and to formulate them for consumer products.
Through its unique position as one of only very few labs granted the licensing needed to test cannabis, Abattis is fortifying its future in the cannabis business.
Abattis is also building strong alliances with strategic suppliers. They just recently announced a partnership with Emerald Health Therapeutics, a highly respected and research-driven Licensed Producer that is poised to become one of the largest LP's in terms of production capacity.
In this way, Abattis can be one of the key contributors from supply to research and right through to marketing needs.
It’s apparent that research will become a critically important part of the cannabis industry as it grows. The results of research on marijuana from company-driven research could also be applied to other areas, Dixon explains.
"The funding isn't coming from food, which has the lowest possible margin as a commodity, but pharmaceuticals," he said.
"But we can use this research to develop life-support technology, as in food, which can become an economic engine for a country like Canada that will carry us for the next 300 years."
This has created a large and potentially very profitable opening for those companies applying bioscience and technology on the leading edge of the cannabis business.
Although only recently established as a full spectrum R&D cannabis sector company, ATT has managed to bring together very valuable assets while ramping up its capabilities in under a year.
POTENTIAL COMPARABLES
Aurora Cannabis (TSXV: ACB) (OTC: ACBFF)
Through its wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., Aurora Cannabis is a major LP, operating a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta. Aurora made waves when it announced the construction of its 800,000 square foot “Aurora Sky” facility second 800,000 square foot production facility at the Edmonton International Airport. Aurora’s also involved in Quebec, with its third 40,000 square foot production facility set to be completed in Pointe-Claire, Quebec, on Montreal's West Island. Aurora also holds a minority stake in leading extraction technology company Radient Technologies Inc., based in Edmonton, and a minority stake in Australian company Cann Group Limited, which was the first in Australia to conduct research on and cultivate medical cannabis. Aurora also owns German wholesale importer, exporter, and EU medical cannabis distributor Pedanios.
Aphria (TSXV: APH) (OTC: APHQF)
Aphria Inc., boasts itself as one of Canada's lowest cost producers, that produces, supplies and sells medical cannabis. Located in the greenhouse capital of Canada, Leamington, Ontario, Aphria provides pharma-grade medical cannabis, and quality patient care. Aphria was the first public LP to report positive cash flow from operations, and the first to report positive earnings in consecutive quarters.
Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF)
The granddaddy of the corporate cannabis sector, Canopy Growth is the world’s largest diversified cannabis company. Canopy boasts a wide offering of distinct brands and curated cannabis varieties in dried, oil and capsule forms. Most widely recognized is Canopy’s subsidiary Tweed which is the world’s most recognized marijuana production brand, as well as an industry educator. Accompanying Tweed in Canopy’s portfolio is medical-grade cannabis producers Bedrocan Canada. In total, Canopy Growth’s numerous state-of-the-art production facilities total over half a million square feet of GMP-certified indoor and greenhouse production capacity.
For a more in-depth look into ATT you can view the in-depth report at USA News Group:
http://usanewsgroup.com/2017/11/06/the-upside-to-biotech-and-cannabis-3-2-2/
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