This month, Canada’s Prime Minister Justin Trudeau fulfilled a campaign pledge to legalize recreational marijuana, becoming only the second country outside of Uruguay to make it a fully legal consumer product. The move by Trudeau, and the 26 American states that have also legalized marijuana to various degrees, underscores the developments made toward legitimacy and liberalization across North America.

However, the legalization of marijuana in Canada will not immediately cascade into an open market because Health Canada wants to protect consumers with regulatory thresholds, while the United States federal government is waiting for science to prove without a doubt that cannabis can provide medical benefits. There are few companies in the booming cannabis field that can actually back their health claims with empirical facts, but Veritas Pharma Inc. (VRT: CSE) and its research arm Cannevert Therapeutics Ltd. are working to break this barrier.

Veritas continues to excel toward supporting the claims around medical marijuana with standardized investigations into cultivars and chemically profiling those cultivars to combat diseases pharmacologically. The company’s research teams are building a body of evidence and clinical developments that offer insight into marijuana’s effects on treating chronic pain, nausea and vomiting, muscle spasms, epilepsy and Post-Traumatic Stress Disorder (PTSD). This pursuit will put the company in a position to be a gatekeeper for factual information for doctors and practitioners. Veritas’ recent closing of its acquisition of Cannevert is an important milestone in implementing this growth plan.

Finalizing its Acquisition of Cannevert and the Importance of Sechelt Organic

On April 21st, Veritas announced that it paid the final installment to acquire an 80% stake of Cannevert. The deal is significant because Cannevert could soon be one of the few laboratories in Canada with a dealer’s license, which would enable it to run analytical tests and biological screenings of cannabis and hemp. In addition, cannabis strains analyzed by Cannevert will eventually come straight from Veritas’ conditional acquisition of Sechelt Organic Medicine, which is in the process of obtaining a commercial grower’s license.

Sechelt has had an application pending with Health Canada since July 2014 for the establishment of a 10,000-square foot growing facility in Sechelt, British Columbia. Furthermore, the deal with Sechelt represents a significant development for Veritas and Cannevert because they are one of the few companies in the final review stage for an ACMPR license.

In March, Veritas offered an update on the Sechelt facility and their experienced grow team. The plans for this facility include 6,800 sq. ft. of budding rooms, 3,000 sq. ft. of cloning rooms including a small testing lab and secure storage room. The building and the security requirements have been designed and implemented in compliance with Canadian government requirements.

“I am confident that with our strategy, which combines organic growing practices, industry leading testing standards, and scientific approaches to growing methods, we can produce the highest quality strains required for the branding of our proposed products,” Dr. Lui Fraciosi, CEO of Veritas, stated in March. “Good business allows for good revenue and good revenue allows for good profit and this too, is a goal for Veritas.”

Veritas’ completed growth plan would allow for well-tested cannabis cultivars to come to market quickly with scientific profiles supporting each strain, allowing for a unique market focus. Another aspect of Veritas’ plan is to reach the growing medical marijuana market in the United States and a recent deal with AlphaPheno Inc. is advancing that goal.

Entering the United States Market with an Important Partner

In March, Veritas and AlphaPheno Inc. of the state of Washington announced an agreement to collaborate and strategize in the area of research and development. As a Tier 3 cultivator and processing licensee, AlphaPheno has the ability to apply for a Marijuana Research License. AlphaPheno will moreover be able to conduct research on the effectiveness and safety of marijuana as part of medical treatment. In support of this endeavor, Veritas will supply the R&D thesis, programs, equipment and laboratory protocols. Veritas will also institute the important qualified personnel requisite to execute these programs. A new laboratory will be constructed within the existing AlphaPheno’s facilities.

“Veritas is excited to expand into the United States market. Marijuana Business News estimates that the national US market is in the multi-billion a year range, while Huffington Post estimates the market is around $35 billion a year,” Franciosi stated in the announcement. “Despite the range of estimates, it is very clear that the market opportunity is extremely substantial. We have the science, the experience, the team, and have an economic business model. Our team has created over a billion dollars of shareholder value in their past ventures and now is very excited to be involved in this new venture which is poised to be a very lucrative industry.”

Veritas and its team continue to be a benchmark of quality in the industry of medical marijuana research and development, filling the critical need for a company that can assess and verify cannabis claims with real science. Besides bringing cannabis strains to market expediently, the company’s ambition is that this quantitative approach could develop into a platform allowing for coverage through insurance carriers in Canada and the United States.


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