Emerald Health Expands Capabilities with Northern Vine Labs

Ryan Allway

Ryan Allway

November 1st, 2017

Exclusive, Feature Stories, News

Emerald Health Therapeutics Inc. (TSX-V: EMH) (OTCQX: EMHTF) and Abbatis Bioceuticals Corp. (CSE: ATT) (OTCQB: ATTBF) recently announced a deal to grow Northern Vine into a thriving center for analytical testing, genetic research and development, tissue culture, and proprietary medicinal and therapeutic formulations. As a Licensed Dealer, Northern Vine will also be able to export and import cannabis oils around the world, unlike ACMPR licensed producers.

Under the agreement, Emerald Health will invest $2.5 million to acquire 53% of Northern Vine and appoint three of four directors. Abattis will continue to hold the remaining 47% equity stake in Northern Vine and benefits from the deal in a variety of other ways. Meanwhile, Emerald Health plans to utilize Northern Vine for cannabis testing, product innovation, and potentially import/export capabilities for cannabis oils.

In this article, we will look at some of the benefits of the transaction for both parties and why investors may want to take notice.

Broadening Licensing Capabilities

Emerald Health benefits from a Licensed Dealer that has much broader capabilities than a Licensed Producer when it comes to carrying out research and development, importing and exporting cannabis oils, and related activities. Northern Vine also provides exposure to the cannabis testing industry, as it currently provides LPs and registered patients with complete microbiology and chemical analyses to ensure product is safe and efficacious.

“Our acquisition of control of Northern Vine will set the wheels in motion on a number of strategic business opportunities that we have been nurturing,” said Emerald Health Executive Chairman Avtar Dhillon, MD, in a press release announcing the deal. “We see tremendous synergies and opportunities to work with Abattis both on extraction and research and development of medicinal and therapeutic products.”

In addition to the Northern Vine transaction, Emerald Health has been working to dramatically expand its cannabis production capacity with a new facility on its 32-acre property in Metro Vancouver and its partnership with Village Farms, which utilizes an existing 25-acre greenhouse complex that is being retrofitted to grow cannabis. The company is focused on high-quality product innovation particularly for wellness and medical benefit to set it apart from many licensed producers in the space that are focused on scale.

Opening the Door to the Future

Abattis Bioceuticals benefits from Emerald Health’s wealth of scientific knowledge, pharmaceutical connections, and access to capital, as well as a $2.5 million capital infusion into the subsidiary. The strong relationship between Abattis and a rapidly growing and respected licensed producer in Canada also paves the way for future joint ventures for its extraction technology and adds credibility to its ability to create laboratories – which is essential to its business model moving forward.

“This is an important turning point for Abattis,” said Robert Abenante, President and CEO of Abattis and Northern Vine. “The company has always desired a strategic partner for its laboratory and has now partnered with one of the most experienced LPs in Canada. As we commence rolling out our business model for extraction, attracting a partner like Emerald is proof that we have an extremely talented team.”

In addition to Northern Vine, Abattis has licensed a proprietary extraction technology with a patented counter-current layering system that yields 98% of cannabinoids – 18% better than today’s leading methods. A continuous system of columns can either remove impurities and pesticides from full spectrum oil or individual cannabinoids and terpenes to 99% purity levels. And, it’s at a lower cost than traditional CO2 extraction methods.

Abattis believes that a major growth area of the industry moving forward lies in the extraction of active ingredients from cannabis to create products such as edibles and the company’s previously announced CBD-based sunscreen. The new relationship with Emerald Health should provide the company with products to test and biomass to convert to those products, utilizing the patented extraction tech to further the company’s stated goal of becoming a key downstream service and products provider.

Looking Ahead

Abbatis Bioceuticals Corp. (CSE: ATT) (OTCQB: ATTBF) and Emerald Health Therapeutics Inc. (TSXV: EMH) (OTCQX: EMHTF) both represent compelling investment opportunities in Canada’s cannabis industry. With Emerald Health’s investment in Northern Vine, both companies are better positioned to execute their long-term vision in an industry that Deloitte expects will exceed $22.6 billion over the coming years following adult-use legalization.

For more information about Emerald Health, visit the company’s website or investor presentation.

For more information about Abattis Bioceuticals, visit the company’s website or investor presentation.

About Ryan Allway

Source: CannabisFN