The merits of medical cannabis are quickly being realized, with 23 U.S. states and the District of Columbia having legalized the drug. With broader acceptance of cannabinoid-based therapies throughout the U.S., the medical cannabis industry has grown at a 16.2% compound annual growth rate to reach $2 billion in revenue between 2009 and 2014, according to IBISWorld estimates.

While companies like GW Pharmaceuticals plc (NASDAQ: GWPH) have been pioneers in the industry, there is a shortage of legitimate research and development amid a growing number of micro-cap reverse mergers attempting to capture their piece of the industry’s growing momentum. Many of these companies have very little in the way of scientific backing or the funding necessary to compete.

GROWBlox Sciences Inc. (OTCQB: GBLX), a biopharmaceutical research and development company, stands out from the crowd with its state-of-the-art technologies in plant biology and cultivation. Led by Chief Science Officer Dr. Andrea Small-Howard, the company has an impressive scientific team that includes big data expert Dr. Long Nguyen and botanical expert Dr. Ulrich Reimann-Philipp.

In addition to the core team, the company’s scientific board consists of immunologist expert Dr. Helen Turner, small molecule expert Dr. Tony Ortiz, clinical investigator expert Dr. Daniel Chueh, orthopedic expert Dr. Alfredo L. Axtmayer, and liver disease expert Dr. John Abroon, who are all committed to advancing cannabinoid research into multiple different areas of medicine.

Leveraging Big Data

Many companies within the cannabis industry have simply administered generic forms of THC or CBD in an attempt to elicit a desired response. By contrast, GROWBlox Sciences is focused on correlating the profiles of active ingredients within cannabis – including cannabinoids and terpenes – with the symptom and disease specific improvements in patient outcomes.

Based on an analysis of preclinical and clinical data from thousands of peer-reviewed studies, the company has identified the most effective cannabinoid and terpene profiles for the treatment of conditions within seven therapeutic categories, including cancer treatments, cardio protection, metabolic syndrome, pain management, neurological disorders, and inflammation.

These categories represent hundreds of billions of dollars in potential value, with markets like the neurological disorder market alone accounting for $952 billion in value. By taking a targeted approach that leverages research already done, the company’s strategy could dramatically improve the odds of success, whilst cutting down on the costs associated with hit-or-miss early stage testing.

The approach is similar to new initiatives at many established biotech companies focused on other areas of research. For instance, Quest Diagnostics (NYSE: DGX) recently teamed up with LabCorp (NYSE: LH) in a program called BRCA Share to contribute de-identified clinical testing data on BRCA1 and BRCA2 to gather and curate gene data in the Universal Mutation Database and uncover treatments.

Accelerated Strategy

GROWBlox Sciences’ proprietary drug discovery program has several strategic advantages that promises to accelerate drug development to three to five years instead of the traditional 15 to 20 years, while significantly reducing development costs from more than $1 billion that’s typically spent on pharmaceutical commercialization by Big Pharma to less then $10 million.

By using a proprietary smartphone app, the company coordinates strain profile information with symptom relief, acting as a drug discovery engine. The company’s regulatory strategy is then focused on leveraging existing cannabis safety profiles, fast-track approvals, and orphan drug designations to reduce clinical timeframes and costs by several orders of magnitude relative to traditional programs.

The research partners contributing these data points, including biotechnology companies, universities, and clinical research organizations, are incentivized with equity in proportion to the value of the data they contribute with kickers in place whenever contributions become part of a patent, IND filing or NDA filing with the U.S. Food & Drug Administration or other regulatory bodies.

In essence, the company is focused on the initial discovery of promising compounds, while universities handle pre-clinical trials, CROs handle clinical trials, and pharmaceutical partners handle distribution. The discovery phase provides the greatest return on capital and diversification relative to other areas of the development process that are much more capital intensive.

Short & Long-term

GROWBlox Sciences has clear long-term potential with its innovative approach that leverages big data to produce lower-risk clinical trial candidates. With 188 human cannabis trials registered with the National Institute of Health and more on the way, the company has an excellent starting point of about a thousand potential combinations within the cannabinoid-related therapy space.

In the nearer-term, the company plans on earning revenue from the sale of certified raw materials through dispensaries. These plans were solidified in May when it announced the formation of Growblox Sciences Puerto Rico LLC, which will legally grow cannabis raw materials that will be exclusively sold to GROWBlox Sciences for distribution in the U.S. and other countries where it’s legal.

The company’s end-to-end operations, consisting of cultivation, post-processing, and manufacturing, create an ideal platform to execute these visions. On the cultivation side, its TissueBLOX, GrowBLOX, and CureBLOX platforms enable efficient growing of cannabis, while its ExtractionLAB produces proprietary blends for distribution as nutraceuticals, cosmeceuticals, and pharmaceuticals.

The nutraceutical and cosmeceutical formulations could also be sold in stores without approvals, since the CBDs are sourced from low-THC hemp plants. In some ways, the company could then compete with the likes of GNC Holdings Inc. (NYSE: GNC) or Nutraceutical International Corp. (NASDAQ: NUTR) in the provision of legal over-the-counter supplements designed to support health.

Looking Ahead

Investors interested in both the cannabis and pharmaceutical industries may want to take a closer look at GROWBlox Sciences given its unique business model, long-term potential in pharmaceuticals, and short-term potential in raw material sales. For more information, visit the company’s website at www.gbsciences.com.

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