VIDEO: Canntab Therapeutics Ltd (CNSX:PILL) Valuation Double

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Canntab Therapeutics Ltd (CNSX:PILL) (OTCMKTS:TLFTF) (FRA:TBF1) CEO Jeff Renwick and CFO Richard Goldstein talk about the recent doubling of Canntab’s valuation. Canntab creates pain management products by utilizes resins to produce cannabis hard tablets for the medical market. Under current ACMPR rules, bud and oil are the only Health Canada-approved delivery methods but the pair is confident in the near future, hard tablets will also be declared an acceptable oral dose delivery mechanism. They compare hard tablets to softgels and Renwick indicates that the advantage of the hard tablet is it protects the cannabinoids from degradation. They discuss Canntab’s revenue model and Goldstein indicates the company expects to see revenue from product sales in 2019.

Transcript

James West:   Well, welcome back. My guests in this segment are Jeff Renwick, CEO, and Richard Goldstein, CFO, of Canntab Therapeutics Ltd., trading on the CSE under the symbol PILL. That’s P-I-L-L, if you haven’t already figured that out. Gentlemen, welcome back.

Jeff Renwick: Thanks, James.

James West:   This is the second conversation that we’ve had, and the last conversation we had, your stock was about half the price that it is today. So, what has happened to create this doubling of your valuation in such a short period of time?

Richard Goldstein: I think several things have happened. The stock, if I’m correct, actually was even less than a dollar when Jeff was last on the show, but the reality is, we did one thing really, really well and one thing really, really bad, and they were the same thing. We raised $5 million on our own, pretty much, at $1 a sub-receipt, if you will; $1 a share. And at the same time, we raised $5 million on our own, meaning that we didn’t go out on any road shows and tours, and frankly, we were probably not very well known in the marketplace out of the gate.

We’ve tried to enhance that by retaining a variety of people, including yourself, and more importantly, we did a great job with FSD finally getting that transaction closed, and that’s well under construction. And I think people are saying, Hey, these guys truly are a game-changer in the medicinal marijuana marketplace.

James West:   Yeah, you bet. Well, so, give us an overview and a reminder of what the whole business is all about, again.

Jeff Renwick: Yeah, basically, James, we take the cannabis resins and we do a little bit of chemistry on it. We get it in a pill format, and we do the clinical studies and get it moving forward in the marketplace.

James West:   So basically, a new way to get high. [laughter]

Jeff Renwick: Manage your pain –

Richard Goldstein: Well, we treat illnesses and conditions, we prefer to say, absolutely. You know, as you know, bud and oil are the approved delivery methods today, and we’re hopeful that, in the not-too-distant future, that Health Canada will approve hard tablets as an oral dose delivery mechanism under the current ACMPR rules.

James West:   Yeah, so now we’ve got, some companies have already done softgels, and I mean, what is the significance of having a hard tablet relative to a softgel?

Jeff Renwick: Well, basically, a hard tablet protects the cannabinoids from degradation, and it’s a little bit easier to deal with, and there’s better stability on it.

James West:   Okay, interesting. So what point are you at in the path to profitability, at this point?

Richard Goldstein: Well, profitability, I guess, first you have to have revenue, and we have had some revenue.

James West:   Details, details, details.

Richard Goldstein: We’ve generated a couple of license fees through our deal with Emblem, and there are several more still to collect on. But true revenue through product sale would be likely in 2019. We have two areas that we’re pursuing: one is the THC medical side, if you will: euphoric, you know, get the buzz, deal with –

James West:   Oh, you don’t have to explain it to me, believe me. [laughter]

Richard Goldstein: The other side, and we might see revenue out of that side even faster, is the CBD side, which is, you know, all the benefits of the cannabis plant and/or industrial hemp, without the THC, without the euphoria. And actually at Canntab, we do have a Health Canada approval NPN number for hempseed oil in a capsule, so we could be on the shelves generating revenue right now. But you know, truthfully, hempseed oil really isn’t much of a CBD carrier, and so, I don’t want to call it snake oil for those of you out there who are selling it. At the same time, if your focus truly is on CBD, you want full spectrum oil, and the government has, in the latest rules, approved grow from this summer crop 2018 to be used in full-spectrum hemp oil, which we will also encapsulate and tablet and market.

James West:   So, is that suggesting that the hemp plant is not a good source for broad-spectrum cannabinoids?

Richard Goldstein: The seed isn’t, and up until now, only the seed was allowed. You couldn’t use the stalk and the flowers.

James West:   Oh, I see. Oh, okay.

Jeff Renwick: So yeah, post-legalization, you’ll be able to use the full flower – the full plant, root and all.

James West:   Root and all? Okay, that’s interesting. Interesting. Do you have any sense that the evolution of these companies that are producing cannabinoids through biosynthetic methods represents any kind of a threat to the long-term viability of a business that focuses on growing the plant?

Jeff Renwick: Well, interesting you say that, because we’ve got a lot of people coming up to us over the last couple of months offering different methods in producing CBD. One of them was through algae, which would be a single-molecule CBD, which was very interesting, because from the pharma business, that’s typically how you would derive one of your products that you worked with – not from a natural plant, or not a plant with several molecules in it, but having one pure molecule. So as we go down the road in the pharmaceuticals and we get a little bit more technical, you’re going to see some of these new methods of producing CBD come up.

James West:   Yeah, you bet.

Richard Goldstein: I would just add to that, too, you know, for those companies, that is another grow method, if you will. At the end of the day, whether you grow it in plant or grow it in, you know, in a laboratory, really, if it’s more effective cost-wise, that’ll be great. But at the end of the day, you have to have a delivery mechanism, irrespective of how you came out with the CBD, through algae or through plant. And so, we have the delivery mechanism. The best delivery mechanism, we believe.

Jeff Renwick: I think one of the reasons why we’ve had a little success recently is, I think a lot of people are becoming aware that our cannabis tablet is a global product. We don’t need to acquire real estate in South America or in Portugal or in any of these places; we can ship tablets around the world from our plant that we’re building out in Coburg, with FSD Pharma.

James West:   Interesting. So will you be participating in the recreational market with these pills?

Richard Goldstein: Well, we like to call it adult use segment in our industry.

James West:   You can call it whatever you want.

Richard Goldstein: Right now, the maximum dose is 10mg by Health Canada, and truth be known, that’s not a lot of drug at the end of the day. And so if you’re really just looking to get high, we’re probably not the solution for you. If you ended up taking, you know, three or four tablets, then maybe we are.

It’s not our focus. Edibles, as they become available, could be an area where people will get access on a recreational side, and even that’s obviously still at least a year away. Our focus, I think for now, will just be on the medical side, and really trying to help people.

James West:   Right, okay. That’s the low-hanging fruit for you guys.

Richard Goldstein: Absolutely.

James West:   Interesting. Okay, let’s leave it there for now. We’ll come back to you in another quarter’s time and see where your stock price is then, because if it keeps going, great!

Richard Goldstein: Thanks, James. Absolutely.

James West:   Thanks for joining me.

Richard Goldstein: Thank you for your time.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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