Written by Ryan Allway
Abattis Bioceuticals (OTC: ATTBF) (CSE: ATT) recently announced the receipt of a Controlled Substance Licence from Health Canada for Northern Vine Laboratories, a company in which Abattis has a 75% stake. The Northern Vine lab site is built, security is in place, and all of the government inspections are complete. Once the lab’s equipment is properly calibrated, Northern Vine will be open for business.
The question to be answered involves the specific nature of that business, the niche it will fill now and going forward, and how the laboratory can benefit Abattis as a whole.
Northern Vine’s Current Business
Initially, Northern Vine will be providing independent, neutral testing services to Licensed Producers as well as to individuals using medical marijuana under the current regulations. This will be the primary revenue source, and market indications show no shortage of demand for the services. Located in Langley, BC, Northern Vines is in the heart of the Vancouver-area market and will be one of the only testing facilities on the Lower Mainland.
This summer, the Globe and Mail conducted an investigation that found one-third of the samples collected had failed an independent test. In essence, the lack of certified testing labs, and the fact that consumers were not legally allowed to employ testing services, had led to an unsafe and untested black market. Health Canada quickly responded by allowing certified labs to test product brought in by consumers. Concurrently, Health Canada has been cracking down on uncertified testing services.
The new rules create a much larger testing market, and the crackdown has been decreasing the number of places where testing is offered. Northern Vine is stepping into the void with a service that is crucial to both the public safety and to the Licensed Producers looking to offer approved products without investing heavily in their own labs.
Potential Going Forward
Along with the safety testing services, Northern Vine can act as an incubator for product formulations and Intellectual Property development, either contractually for outside companies or for Abattis itself.
Basically, the lab is licensed to handle a controlled substance in Canada, play around and experiment with it, come up with formulas for edibles or medicinals, patent those formulations and introduce them to allowed markets.
Along these lines, Abattis recently announced an MOU with Global Damon Pharma of South Korea. The agreement is initially focused on the distribution of Abattis’ existing PhytoNOS™ and Sassy™ Tonics in South Korea. But establishing this relationship now lays the groundwork for Asian distribution of further products formulated in Canada, in Northern Vine’s lab.
Northern Vine’s long-anticipated federal license has moved the company from the hypothetical world into the real one. Combined with Abattis’ ownership of its LP application in Quebec called Biocell Labs Inc., and its announcement of an agreement to acquire up to 100% of Experion Biotechnologies Inc., a Licensed Producer applicant in the Vancouver area, these developments reflect a comprehensive long-term plan. If any of the current or future LP applications go through, Abattis will have a production and distribution operation to complement Northern Vine’s testing and product development capabilities.
Abattis’ other established business, Vergence Sales and Marketing, already offers bioceutical products to consumers. With distribution in place and the groundwork being laid for additional Asian channels, Vergence completes the full circle of Abattis’ plan to become a full service legal cannabis operation. From seed to sale, Abattis is putting together a comprehensive business right before our eyes. The market should be noticing these developments long after the pre-election hype dies down.
Source: High Finance Report