Through an agreement with Rocky Mountain Hemp Inc., a relatively known micro-cap cannabis company will produce the first U.S.-grown hemp used in a commercial product in over 60 years. The low-THC and CBD-rich hemp will be used to support near-term commercial endeavors.
Cannabis Therapy Corp. (OTC: CTCO), developer of phytocannabinoid-based medicinal products for humans and animals, recently announced that it passed pre-harvest inspection by the Colorado Department of Agriculture and subsequently harvested its first ever hemp crop. With less than 0.3% THC content, the hemp will be legally integrated into product development and commercial applications.
“We are very proud today to have this opportunity to launch into commercial activities within such a relatively short timeline and make a little history while we are at it,” said Cannabis Therapy Corp. President and CEO Dr. Soren Mogelsvang. “Our commitment to advance the science and medical applications of this extraordinary plant shows that real opportunities are achievable.”
Hemp’s unique advantages
The U.S. federal government still considers marijuana a Schedule I Controlled Substance – a designation it shares with drugs like heroin and cocaine, but hemp is exempt from the designation due to its low THC content. After all, THC is the psychoactive component of marijuana that gives users the “high”, whereas CBD and other cannabinoids are being studied more so for their medical benefits.
After a two-and-a-half year lawsuit, the Hemp Industry Association (“HIA”) was victorious in a lawsuit with the Drug Enforcement Administration (“DEA”) in 2004. The decision permanently blocked DEA regulations that attempted to ban nutritious hemp foods and paved the way for hemp-based supplements to be used in all human and animal markets without worry of regulatory crackdowns.
Cannabis Therapy Corp.’s U.S.-sourced hemp production and unique line-up of existing animal and upcoming human cannabinoid therapies present investors with very little regulatory risk compared to companies sourcing cannabinoids from marijuana plants or other sources that remain federally illegal. These reduced regulatory risks mean that the stock could enjoy higher long-term premiums.
Cannabis Therapy Corp. plans to process the harvested hemp for use in its commercial product development. On the human side, management plans to formulate proprietary anti-inflammatory and related nutraceutical products. On the animal side, some of the crop is slated for use as an ingredient in the recently licensed Canna-Pet™ product lineup of animal supplements.
“As the fastest growing provider of over-the-counter cannabinoid pet products in the world, Canna-Pet™ values our promising relationship with Cannabis Therapy Corp. which now allows us to product the first commercial products with American-grown hemp in over 60 years,” said Canna-Pet LLC President Dan Goldfarb in the same press release announcing the hemp harvest.
The American Pet Products Association, a leading trade association serving the interest of pet suppliers, estimates that overall expenditures in the pet industry climbed from $43.2 billion in 2008 to $55.72 billion in 2013. With about $22.6 billion spent on food and $13.7 billion spent on suppliers and OTC medications, Canna-Pet™ is uniquely positioned to capitalize on a largely untapped market.
Cannabis Therapy Corp. trades with a market capitalization of $41.8 million, according to OTC Markets. With a Canna-Pet agreement in place that’s already generating revenue, along with its first hemp harvest to provide raw materials for its other commercial activities, investors may want to take a second look at the stock as it transitions from development to commercialization.
Compared to medical-focused companies like GW Pharmaceuticals plc (NASDAQ: GWPH) or Cannabis Sciences Inc. (OTC: CBIS), Cannabis Therapy Corp. has no need for lengthy regulatory approval of its product line-up. The company also differentiates itself from MCig Inc. (OTC: MCIG) and Vape Holdings Inc. (OTC: VAPE) in that it has direct exposure to cannabinoids themselves instead of providing ancillary products.
The company’s Canna-Pet products alone target a multi-billion dollar market with a unique product in a rapidly growing niche. On the human side, the firm’s ability to immediately provide completely legal nutraceutical products that deliver the benefits of CBD without the risk of THC could hold even greater potential. Combined, the two segments yield a stock that’s worth a serious look by investors.
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