With the growing adoption of legal medical marijuana across the United States, the pressure is hopefully starting to build on regulators to encourage research on cannabis. Thousands of years of medicinal use have resulted in plenty documentation on potential therapeutic benefits, but much of it is anecdotal or evidence collected through small-scale, trial-and-error research.
That’s by no means to discount the value of the data or ignore the fact that some studies have been much more extensive than others, but FDA oversight would lend a lot to silencing critics.
Until then, the battle will rage on between medical marijuana proponents and naysayers over the safety and efficacy of pot and hemp until hospitals’ doors are allowed to be opened for clinical studies.
A particular soft spot that needs clinical answers is in the growing use of cannabinoid-based products in animals. Some of the most well known brands in this business are Canna-Pet, Canna Companion and Treat-ibles, companies kept in private hands until recently when Cannabis Therapy Corp. (OTCQB:CTCO) acquired the rights to Canna-Pet products.
The marketed products of these companies are able to fly under some regulatory scrutiny because they utilize hemp to formulate supplements that only contains trace amounts of tetrahydrocannabinol (THC), the constituent in cannabis that is responsible for the "high" feeling. THC and cannabidiol (CBD) are the two most well known of the more than 85 identified cannabinoids. CBD is reported to promote a broad spectrum of health benefits, including reducing seizures, inflammation, risk of artery blockage and more. Yet, opposition to cannabis use argue that CBDs, which are used in the aforementioned pet products, have not been researched enough to fully discern their safety and clinical benefit.
Obviously, this is a bit of a "chicken and egg" argument because unless the federal government relaxes its rules on use, in vivo studies are limited and if research can’t enter the clinic, then the data can’t be collected and the circle continues, providing fodder for those against use of cannabis in any form.
Through its proprietary plant strains and CBD-based products, Cannabis Therapy is initially focused on products specific to inflammatory and autoimmune diseases. Going the route of ultra-low THC nutraceutical products for humans and animals, the company can shave
years and tens of millions of dollars off research and development compared to a traditional biotechnology methodology.
Early in July, Cannabis Therapy said it is commencing exploratory lab research to establish a series of inflammation assays and models to serve as the first layer of scaffolding in developing a hemp-extract profiling platform. The company is looking to answer the call to a growing number of voices demanding the implementation of high production standards for the booming cannabis industry both on its own and as a segment of a global nutraceuticals market that is forecast to reach $207 billion by 2018. Considering the massive market size, there is the potential for a clinically proven nutraceutical to reach blockbuster status, but it starts with defining and categorizing cannabis strains and creating gold standards that parallel those in the biotech space.
Cannabis Therapy has now taken the first step in penetrating the pet industry, one that the American Pet Association showed generated $55.72 billion in U.S. sales during 2013 and forecasts to hit $58.51 billion this year. Last week, Cannabis Therapy announced acquiring worldwide license and rights to the technology and products developed by Canna-Pet in exchange for sales royalties. This brings a small portfolio of products, including Canna-Pet capsules and Canna-Biscuits that are sold exclusively online, under the company’s umbrella.
The products, which are manufactured in Seattle, are gathering strong support, with more than 200 veterinarians in the U.S. and Canada recommending them as a daily oral food additive. This has led to more the 10 million capsules being sold, even with the limited market exposure and sales channels. The Canna-Biscuit line was just launched in April and there are plans to introduce a new pet food additive called Canna-Pet Max CBD later this year, according to a company statement on Monday.
In the release, Cannabis Therapy said that they are analyzing data and formulating a plan to target key market segments in a bid to raise current monthly sales. This new strategy is expected to include advertising, conferences, trade shows and expanded distribution opportunities.
No outlook has been provided as to how much the company believes it can pull down in revenue each month or how much goes to Canna-Pet in royalties, but that will come out soon enough in regulatory filings. In the meantime, generating revenue will help legitimize the company in a young industry that has its fair share of wishful thinking by many small firms trying to get investors’ attention. In the broad scope, the cash flow should help Cannabis Therapy with its other initiatives to develop new products for humans as well, which hopefully will be able to find some new regulatory support for research.
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