Naturally Splendid (TSXV:NSP) announced an update on the cannabinoid regulatory environment in Canada.
The recent news that Health Canada is beginning to grant Authorized Licensed Producers under the Marihuana for Medical Purposes Regulations the approval to produce cannabis oil is a significant step forward in the cannabis industry as regulations continue to evolve. This latest development allows patients to have access to new formulations of cannabinoid-infused products, which are viable alternatives to smoke-inhalation.
While NSE remains focused on the industrial hemp industry, this movement creates the opportunity for the company to license formulation technology acquired in an earlier transaction with Full Spectrum Laboratories Limited (FSL), to Licensed Producers and eventually, infused product manufacturers providing the platform to develop unique and innovative cannabinoid-infused products for the medical and recreational marijuana markets.
Naturally Splendid is positioned to capitalize on these emerging markets as in an earlier news release it was reported it’s 100% owned American subsidiary, Naturally Splendid Enterprises USA Limited (“Naturally Splendid USA), had secured a suite of cannabinoid extraction and formulation technologies from FSL.
FSL invested well over $10 million developing the technologies covered in the license with Naturally Splendid USA.
The license grants Naturally Splendid USA worldwide rights to a suite of advanced cannabinoid technologies, including the first issued USPTO patent for water-soluble cannabinoids, essential for the development and manufacturing of cannabinoid-based nutraceutical and pharmaceutical products and therapies. The license allows Naturally Splendid USA to create products and industrial solutions in those countries and jurisdictions that allow for the manufacture and distribution of cannabinoid based products.
The license allows Naturally Splendid USA to sub-license these cannabinoid technologies to approved third party companies in countries that allow for the production and distribution of cannabinoid-based products and solutions.
The current American market for cannabinoid-based products is estimated to exceed $300 million this year and is expected to show significant growth year after year for the foreseeable future as regulations continue to evolve and additional states amend their marijuana and industrial hemp laws.
Naturally Splendid CEO Craig Goodwin states, “We want to maximize revenue opportunities relating to cannabis sativa, which includes industrial hemp and marijuana. Through our worldwide licensing agreement with FSL we are positioned to capitalize on the exploding demand for cannabinoid-based products and solutions. Currently, we remain focused on the American market where our hemp extracted cannabinoid products supplied by our strategic partner, Medropharm GmbH, are legal in all fifty states. And we will continue to monitor and position the company to capitalize on the evolving regulatory environment in Canada.”
In Canada, NSE will continue to support the Canadian Hemp Trade Alliance (CHTA) and its continued push for deregulation of industrial hemp and de-scheduling of hemp-derived cannabidiol (CBD). In recent months, the commercial market for hemp-derived CBD products has seen significant growth in the United States despite the fact that domestic hemp cultivation remains illegal in most states. Canada was scheduled to harvest over 100,000 acres of hemp in 2015 and continues to be a global leader in this sector. The Hemp Business Journal estimates that consumer sales of CBD-infused products are projected to reach $85M in 2015.
There are in excess of 80 cannabinoids within industrial hemp and marijuana, many being associated with health benefits. Two of the more recognizable cannabinoids are Tetrahydrocannabinol (THC) and cannabidiol (CBD). The technology from FSL allows us immediate access to commercial ready CBD products.
Cannabidiol (CBD), present in both industrial hemp and marijuana, is arguably becoming the most sought-after cannabis compound due to its medicinal and nutraceutical properties:
These new market segments offer NSE new revenue opportunities both from a licensing standpoint and direct retail sales.