Why investing in Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS)one of the largest U.S. patentholders for cannabis extraction, distillation, and delivery could be your next portfolio win.
“In markets like technology, intellectual property (IP) is pretty well understood. Create a unique invention, patent it, and then enforce it against anyone who tries to copy you. In the nascent cannabis industry, IP is critical for creating true differentiation between companies.”
– Kevin Murphy, Founder of Acreage Holdings
Big Tobacco and Big Alcohol poured Big Money into the Canadian cannabis industry, focusing on licensed producers, brands, and intellectual property.
International alcohol giant, Constellation Brands (NYSE: STZ), invested $4 billion USD in Canadian cannabis producer, Canopy Growth (TSX: WEED, NYSE: CGC).
U.S. tobacco giant, Altria Group (NYSE: MO), invested $1.8 billion USD in Canadian cannabis producer, Cronos Group (NASDAQ: CRON, TSX: CRON).
UK tobacco giant, Imperial Brands (LON: IMB), invested $93 million USD in Canadian cannabis company, Auxley Cannabis Group (TSX.V: XLY, OTCQX: CBWTF).
Jazz Pharmaceuticals (Nasdaq: JAZZ) acquired GW Pharmaceuticals (Nasdaq: GWPH) for $7.2 billion USD. GW Pharma owns 57 U.S. patents and is one of the largest global cannabis patent holders.
British American Tobacco (LON: BAT, NYSE: BTI) the world’s largest tobacco company, announced a strategic investment of $175 million USD into Atlantic Canada-based Organigram (TSX: OGI, NASDAQ: OGI) to form a product development collaboration agreement. The companies are creating a Center of Excellence focused on creating and sharing IP around cannabis products.
These examples demonstrate that multinational corporations look for acquisition targets that own intellectual property and operate in federally legal jurisdictions.
Nextleaf has been issued over 70 patents globally including 13 U.S. patents and validates its technology through their operations in Canada, the world’s largest federally legal cannabis market, where patent rights can be both enforced and leveraged over their 20-year lifespan. Nextleaf is one of world’s largest cannabis patent holders.
The Patent Arms Race
“Despite marijuana’s illegal status in most countries, the patent arms race for cannabis has already begun. Seven of Canada’s top ten cannabis-patent holders are multi-national pharmaceutical companies, including Ciba-Geigy, Pfizer, GW Pharmaceuticals, and Merck.”
The landgrab to secure cannabis patents has started. Companies that leverage their technologies developed through their IP by generating revenue via licensing and monetizing that IP, will have a distinct advantage as other jurisdictions, like the U.S. and Mexico, take steps toward federal legalization.
Canopy Growth – the world’s largest cannabis company – and their acquisition of a small Colorado-based hemp research company, Ebbu LLC., is a prime example and illustrates the degree of difficulty in turning IP into issued patents.
Ebbu’s intellectual property was touted as the primary reason for the $330 million USD stock and cash deal. However, three years later, the company is struggling to turn that intellectual property into issued patents.
“The difficulties Ebbu has faced in securing patents point to a broader issue in the pot sector, where many companies tout their intellectual property, but few have successfully obtained exclusive rights to their inventions.”
– Kristine Owram, Bloomberg News
With this foresight, Canadian extraction and technology company, Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS) set out four years ago to secure intellectual property and develop a patent portfolio. Nextleaf validates its IP in Canada and has become its most efficient cannabis oil refinery through its multi-patented automated, closed loop extraction plant that produces high purity, low cost distillate.
In 2019 Nextleaf became the first publicly traded company to be issued a U.S. patent for industrial scale extraction and distillation of cannabinoids. Nextleaf currently owns 12 U.S. patents and has been issued over 70 patents globally
Nextleaf has a 99% success rate obtaining issued patents from its pending patent applications, compared to averages of less than 50% for life science companies. Nextleaf owns over 70 issued patents in the United States, Canada, Mexico, Israel, across Europe, Australia, New Zealand, Columbia, Brazil, and Asia. Nextleaf’s patents cover what its team of Ph.D chemical engineers and scientists believe are the most efficient methods for producing high-purity THC and CBD distillated oils. Mexico has approved an adult-use bill that, once signed, will make it the largest legal cannabis jurisdiction in the world. Nextleaf trails only GW Pharmaceuticals (NASDAQ: GWPH) for the most issued patents in Mexico.
In the race for IP development and patent issuances, Nextleaf owns one of largest patent portfolio of any cannabis company in the world. Firmly ahead of many of the industry’s leading cannabis companies.
| CANNABIS INTELLECTUAL PROPERTY LEADERS | ||||
|---|---|---|---|---|
Nextleaf | Canopy | Aurora | GW |
|
| U.S. Ticker Symbol | OTCQB: OILFF | NYSE: CGC | NYSE: ACB | NASDAQ: GWPH |
| Market Cap ($Millions USD) | $22 | $12,037 | $1,777 | $6,774 |
| Commercial Scale Extraction Techniques | Proprietary Ethanol and Distillation Plant | Off the Shelf Co2 and outsource 3rd parties | Off the shelf Co2 and outsource to 3rd parties | Off the shelf Co2 |
| Issued Patents | 13 | 45 | 0 | 57 |
A crucial catalyst for IP focused cannabis companies arrived in dramatic fashion in December 2020.
On December 22, 2020 Canopy Growth (TSX: WEED, NYSE: CGC) filed the industry’s first cannabis patent infringement lawsuit, against GW Pharmaceuticals (NASDAQ: GWPH) pertaining to its patented C02 extraction process.
The lawsuit validates the value of IP in cannabis. With the U.S. moving towards federal legalization, experts believe U.S. patents will become as integral to cannabis, as they are to the pharma and bio-tech industries. The lawsuit is positive for Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS) , which owns one of the largest portfolios of cannabis patents after Canopy Growth and GW Pharma.
British American Tobacco’s (LON: BAT, NYSE: BTI) strategical investment in Organigram (TSX: OGI, NASDAQ: OGI) for 19.9% equity interest is a major catalyst and continues the M&A theme for 2021.
Further evidence supporting the expert’s theory that large multinational companies are eyeing cannabis companies with IP and patents operating in federally legal jurisdictions as M&A targets, arrived when BAT and OGI announced their agreement. As part of the deal, a Center of Excellence will be established in Canada so the companies can share and collaboratively develop IP in a space that will also allow them to globally commercialize their products and technologies.
Source: MJ Biz https://mjbizdaily.com/british-american-tobacco-buying-stake-in-cannabis-producer-organigram/
The next wave of M&A Appetite for IP-Rich Companies is here and it is just getting started.
M&A transactions in the industry, involving IP-rich companies have come to the forefront in 2021; validated technology that can be immediately commercialized will be essential as large markets like U.S. and Mexico federally legalize.
Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS) has positioned itself to be appealing to suitors by focusing on developing disruptive IP around the extraction of standardized CBD and THC molecules. Add in the recent M&A activity and it is not hard to imagine the company a prime target for a takeover attempt by a large multinational company looking to acquire one of the largest global patent portfolios in cannabis. With this vision in mind, Nextleaf proactively adopted a shareholder rights plan, otherwise known as a “poison pill”, intended to ward off hostile take-over bids, and to maximize shareholder value if a take-over bid is made.
Although Nextleaf has been proactive in their patent strategy and protecting itself from unwanted takeovers, the company’s overall IP strategy is defensive. Nextleaf believes they have developed the most efficient method of processing cannabis biomass into THC and CBD molecules. By patenting their technology in emerging jurisdictions such as the U.S. and Mexico, the company will be able to operate themselves or find partners in these markets without the fear of litigation for using inferior technology widely used throughout the industry.
“We’re not here to use patents as a way to attack others. I think it’s the opposite, it’s more as a defensive tool. I see it as a moat around our technology.” – Paul Pedersen, CEO of Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS)
Nextleaf’s owns two high-profile patents around the production of THC and CBD prodrugs known respectively as THC-O-Acetate and CBD-O-Acetate. The patents issued in the United States and Canada enables the production of a more potent analog of THC and CBD, an alternative option to experience the unique medicinal benefits associated with targeted drug delivery. The Canadian patent represents the best opportunity with the fewest barriers to entry for pharmaceutical firms, but the U.S. patent may unlock their potential to become a billion-dollar business.
Through automation innovation, Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS) is playing a leading role in revolutionizing extraction and purification to enhance cannabis oil economics across the globe.
Currently, most cannabis oils used to infuse edibles, beverages, topicals, and other non-smokable forms of cannabis is extracted using off the shelf, small-scale Co2 extraction equipment. This technology is at the center of the patent infringement lawsuit on GW Pharmaceuticals put forth by Canopy Growth.
The two primary problems for cannabis and hemp processors that rely on Co2 extraction are:
- The process stops at a less refined crude oil causing undesirable flavor and smells due to the chlorophyll, fats, and waxes that aren’t removed initially.
- There is no ability to efficiently scale production, leading to a significantly higher cost of producing CBD and THC oils produced using this and other off the shelf extraction methods.
Nextleaf’s automated, closed loop extraction plant is 8-10 times as efficient as most traditional Co2 extractors.
Nextleaf’s patented technology and economies of scale rely on automation that is nonexistent in off the shelf technology like Co2 machines or other alcohol extraction methods. This advantage enables the production of a truly standardized, high purity distillate at a fraction of the cost.
Nextleaf’s automated, closed loop extraction plant goes beyond crude extraction to advanced molecular distillation where low-grade cannabis or hemp biomass is processed into a highly refined oil.
The largest cannabis companies in the world are “right sizing”. The industry is pivoting from the vertically integrated business model to a more sustainable approach featured in most established industries. Example: Coca-Cola does not grow its own sugarcane; it purchases the ingredient from a supplier.
That’s why pureplay companies like the undervalued Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS) stand out.
This is what has landed Nextleaf on many analyst watchlists:
- A focus on one part of the cannabis supply chain
- Their automated, proprietary, closed loop extraction plant
- Technology to transform failed crops of cannabis or hemp into a standardized high purity product
- Formulations to manufacture a patented THC derivative
- Supplier of vape pens, CBD oil, and bulk ingredients for ingestible products
Protecting the process of producing a high-purity, cannabinoid-rich distillate is the first step, but developing and protecting formulations for THC and CBD products is just as important.
“Growing in a greenhouse to sell a beautiful, dried flower is great. Dried flower sales will always be a core part of any market. But efficient patented extraction technology and put into IP-protected delivery formats like beverages or vape products is even better.”
– Mark Zekulin, Co-Founder, Canopy Growth
Cannabis edibles and beverages on shelves today have issues with bad taste and slow onset time. In some cases, feeling the effects of these products can take up to two hours.
To combat the industry’s toughest challenges around odor, taste, and onset time, Nextleaf acquired a water-soluble cannabinoid formulation with a rapid 10-minute onset time.
Andrews talking about our Rapid Emulsion Technology by OILS™
The largest cannabis markets in the world are preparing for legalization. Mexico recently announced a bill to legalize recreational cannabis, and it’s not a question of if markets like the U.S., Mexico, and Europe legalize, it’s a question of when?
The election in the U.S. suggests the U.S. will legalize cannabis this term. On Dec 2nd, 2020 the United Nations rescheduled cannabis. As a result, the UN greenlighted medicinal cannabis and the European Commission announced CBD would not be regulated as a narcotic.
Paul Pedersen, Nextleaf CEO talks about developing unique processing in cannabis extraction
Nextleaf Solutions has outperformed the world’s largest companies when it comes to developing issued patents and intellectual property around cannabis extraction, distillation, and delivery. Validating its I.P. in Canada before the U.S. is a federally legal jurisdiction is an advantageous strategy to attract large multinational corporations waiting for that specific catalyst and is a key driver of market cap in the next oil boom!
Register and download the company’s special investor kit (includes a demo video of their patent-pending water soluble technology) to learn more about the world’s most innovative cannabis extraction technology company, Nextleaf Solutions (OTCQB: OILFF | CSE: OILSOTCQB: OILFF | CSE: OILS)
Visit nextleafsolutions.com to keep up to date on corporate news and follow OILS across social media platforms: Twitter, LinkedIn, Facebook, and Instagram.
IMPORTANT NOTICE AND DISCLAIMER This website is owned and hosted by Market Tactic Media Ltd. Articles appearing on this website should be considered paid advertisements. Market Tactic Media Ltd. and its owners, managers, employees, and assigns (collectively “the Publisher”) is often paid by marketing companies to host websites on which articles profiling public companies are published. The Publisher has not been compensated by any of the profiled companies. The Publisher’s compensation for articles appearing on this website is as follows:
- The Publisher has been paid approximately $500 per week while the advertisement campaign was active by Think Ink Media as compensation to host the article profiling Nextleaf Solutions.
