Looking to add to its product lineup, Calgary-based health and wellness company Kanabé Corp. has penned a letter of intent to utilize the assets of Abattis Bioceuticals Corp. (CSE:ATT) (OTC:ATTBF).
Kanabé currently has a product bag that includes topicals, sublingual oils and various skin-care products. Per the LOI, Abattis will provide Kanabé with cannabinoids, as well as formulations, manufacturing, analytical and regulatory services to support the development and commercialization of full suite of cannabis-based products.
The goal of the partnership is to scale Kanabé's manufacturing capacity to allow it to reach new distribution channels, including those overseen by provincial commissions. Kanabé says it is currently in negotiations to land distribution agreements with major retailers for its existing products, one of which has over 100 locations throughout Canada.
Cannabinoids are a broad group of over 100 active chemicals found in the cannabis plant, the two most famous being cannabidiol (CBD) and tetrahydrocannabinol (THC). CBD differs tremendously from THC as it doesn't deliver the "stoned" feeling often associated with marijuana, as THC does.
Many scientists trumpet the medicinal benefits of CBD, but others argue it is purely anecdotal because clinical trials (the gold standard for testing safety and efficacy of drugs) have been limited due to marijuana largely remaining illegal at federal levels globally.
Canada has a robust cannabis market due to medical marijuana being legal for years and recreational adult-use marijuana expected to become legal later this year.
Utilizing Abattis' downstream cannabis solutions, the new Kanabé product line will be directed towards the pending adult-use market. "This is the latest example of our fully-integrated suite of services supporting manufacturers of cannabis- and hemp-infused products from formulation to distribution," said Rob Abenante, President and CEO of Abattis, in today's statement.
Shareholders are apparently liking the news, carrying shares of ATT up four cents, or 12.7%, to 35.5 cents as of 2:30 p.m. in Toronto