Xanthic Biopharma

Using Proprietary Technology to Enhance Cannabis Product Portfolios

This profile is part of a paid investor education campaign.*

Overview

Xanthic Biopharma (CSE:xTHC) is a premium cannabinoid life sciences technology brand that has developed a patent-pending technology to make the two key active ingredients in cannabis—THC and CBD—soluble in water. By targeting a gap in the cannabis marketplace—cannabis molecules have so far only been dissolved in oils—Xanthic Biopharma has designed an innovative approach to cannabis consumption that addresses the needs of medical and recreational cannabis consumers.

This proprietary technology offers benefits to consumers which include increased bioavailability, precision-dosing, cost effectiveness and convenience. Without affecting the habits or behaviors of its customers, Xanthic Biopharma provides its premium products—flavoured THC or CBD-infused drink powders—as effective and health-conscious alternatives to current cannabis consumption methods.

Xanthic’s business model is designed around a highly-scalable licensing approach under which the company enters into strategic partnerships with licensed producers (LPs) across various jurisdictions. In exchange for production space, the THC and CBD and distribution of its products, Xanthic provides its proprietary technology, branding support and associated advisory services.

Under these partnerships, LPs can make a capital investment of just $100,000 to increase their product offerings and margins. This also allows Xanthic to enter into multiple regions, taking advantage of current legislations in the US under which cannabis consumption is state-legislated. This gives Xanthic a first-mover-type position as a national cannabinoid technology brand and allows the company to consistently provide shareholder value.

Xanthic is led by a management team with extensive experience in capital markets, brand development and corporate development. This includes CEO Tim Moore, who brings vast experience in branding and marketing, having been the president of the Clorox Company of Canada and having led Brita’s North American consumer and foodservice water filter businesses, amongst various strategic roles. Management is also notably invested in the company, holding approximately 11 percent of shares.

Company Highlights

  • Designed proprietary technology that makes THC and CBD water-soluble
  • Deploying a licensing business model that extends footprint across multiple jurisdictions
  • Low capital cost for LPs to deploy Xanthic’s products is $100,000
  • Provides producers with ability to increase product portfolio
  • Three proprietary CBD and THC-infused drink powders
  • Entering the market through Oregon, with plans to continue through Colorado, Washington, Nevada and California
  • Strong management team with vast experience in developing premium brands holds 11 percent of shares

Xanthic’s Technology

Under the mantra of driving value through innovation, Xanthic’s proprietary technology is unique in that it is able to powderize active ingredients in cannabis (i.e. THC and CBD) and make them soluble in water. This approach is quite innovative as cannabis molecules are are usually only oil-soluble in their standard form.

Benefits of the technology

In transforming the cannabis molecules, the technology is also able to significantly increase the bioavailability of active ingredients, meaning that the cannabis molecules are more easily and efficiently absorbed, making the onset of their effects much quicker. In powdered form, THC and CBD can also be dosed effectively, making it easier for medical practitioners to prescribe the drug.

Focused on addressing the needs of the consumer, Xanthic’s portfolio of THC or CBD-infused powdered drinks provide a number of benefits that go beyond their healing, energizing or rehydrating properties. To start with, in powdered drink form, cannabis consumption can be a discreet process that is not linked to any negative stigma, such as there is with smoking. As they can be precisely dosed, powdered drinks also relieve users of the potential for damage to the respiratory system from smoking cannabis and of the potential for accidental over-administration from edibles.

Patent application

In March 2018, Xanthic announced that it had filed a patent application for its proprietary processes and for the drink powders produced with the technology.

“Xanthic is extremely excited to have developed this industry-leading technology,” said Xanthic CEO Tim Moore. “The Company’s technology provides a competitive advantage in the marketplace and we have taken the logical step of seeking  patent protection for the Company’s proprietary processes and products. Our break through process allows for full spectrum cannabinoid water solubility with maximum bioavailability. This is an industry first and will add a great deal of value for our strategic partners.”

Product Portfolio

Aimed at providing users managing emotional and physical afflictions with relief through easy, innovative and contemporary product offerings, Xanthic has so far developed three cannabis-infused, flavoured drink powders that can instantly dissolve in water. Created to easily integrate within active and natural lifestyles in a very discreet manner, the products include a premium THC-infused drink powder, a THC-infused energy drink and a CBD-infused recovery beverage.

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Xanthic Hi-Dration Drink

To be taken at any point before, during or after a workout, the Xanthic Hi-Dration drink powder is designed to deliver anti-inflammatory muscle relief, while also stimulating the metabolism. The drink also replenishes electrolytes and reduces fatigue through the use of branched chain amino-acids, which also accelerate recovery and improve the use of fat for energy.

Xanthic Energy Drink

The Xanthic Energy drink is a THC-infused beverage that contains both L-taurine and green tea extract to give the user an energy boost. To be taken before exercising or when mental focus is required, the drink replenishes electrolytes and restores the system, while also providing a cerebral high.

Xanthic Rescue Drink

Xanthic’s CBD-based recovery drink is designed to address the symptoms associated with THC overconsumption, bringing the high down, so to speak. The drink combines CBD and terpenes, which are assisted by branched chain amino-acids that allow rapid absorption and recovery. The drink replenishes electrolytes and stimulates muscles to relieve discomfort, all the while helping the body to regulate hydration.

Deploying a Licensing Business Model

A strategic part of Xanthic’s business model revolves around entering strategic partnerships with LPs across key jurisdictions in the United States. Under this model, Xanthic licenses its proprietary technology and associated branding and advisory services to the LP, in exchange for less than 500 square feet of manufacturing space, provision of the active ingredients and distribution of the product.

From a cost perspective, the capital cost for Xanthic’s powders to enter a market is approximately $100,000, and this is complimented by low distribution and labor costs. This is a small investment when compared to infused beverages, for instance, which require a bottling plant, a large workforce, steep distribution costs and specific storage requirements.

Partners in this model include Nutritional High (CSE:EAT), which saw a 27 percent increase in its stock price following the announcement of the partnership, and Avitas CBD Water, an Oregon-based company that will produce and distribute CBD-infused water co-branded with ‘Powered by Xanthic Solubles’. As part of the agreement with Avitas, Xanthic has also acquired a 45 percent ownership position in the company, subject to performance metrics over the next 12 months.

Not being a LP themselves, this licensing approach allows Xanthic to strategically extend their footprint over a variety of states, giving it a unique position as a national cannabis-focused company. In addition, Xanthic’s team is developing a strong skill-set for developing agreements that are favorable to both parties while also taking into account the unique regulations tied to the LP’s place of business.

As the company continues to grow and expand, it plans to continue entering various states in the US, including Oregon, Colorado, Washington, Nevada and California. Looking beyond the American border, Xanthic also anticipates future engagement in the Canadian market once edibles and alternative forms of cannabis consumption are legalized and regulated. Further on in the future, the company plans to develop a more international footprint by using its existing skill-set to adapt to differently-regulated jurisdictions.

Management

Tim Moore, MBA—CEO

Tim Moore has over 30 years experience in Fortune 500 leadership roles in Canada and USA. Former President of The Clorox Company of Canada and COO and Synnex Canada. Led Brita North America Consumer and Foodservice water filtration businesses. Experienced with mergers and acquisitions. Progressive positions in Marketing, Sales, Operations and  General Management. Has led organizations ranging from start-up to over $1 billion in size. Extensive experience in the launch and growth of premium branded products across a broad range of categories.

David Bhumgara CPA, CA—CFO

David Bhumgara has over 20 years of senior management and capital markets experience, over 15 years of experience as CFO for TSX (Dundee Energy) and TSX.V listed companies in resources, oil and gas, and technology. He has extensive experience in finance, accounting, corporate finance, and mergers and acquisitions.
He has proven track record working with small to medium size organizations.

Gary Galitsky—President

Gary Galitsky has been producing craft cannabis for designated use for 7 years, proficient in all forms of extraction techniques. He was one of the earliest applicants to receive the MMAR license for both personal and designated production. He consulted for a number of Licensed Medical Cannabis Producers to develop both scaled plant production growth strategy as well as extraction and secondary processes.

Derrick Welsh – Director of R&D

Started in healthcare in 2008 working alongside physicians and allied healthcare professionals formulating treatment plans for ABI and chronic pain patients. Consulted for multiple ACMPR approved laboratories for extract formulation development & premarket formulation of edibles. Adviser to Synergy Health Services – one of Ontario’s first Cannabis Clinics.


 

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