When I was running the editorial show at Stockhouse, I had reason to look over a lot of messageboards for a wide variety of public companies. Almost without fail, you could bet that any given messageboard would be faced with two problems.
- An almost total lack of communication between the company and it shareholders.
- Short sellers and stock bashers slipping into that communication vacuum to hijack the narrative for their own needs.
This is how good companies end up with bad stock charts. They lose control of the message and, once the negators take hold, they don’t let go. See Golden Leaf Holdings (GLH.C) for much of the last year as a great example.
Thankfully, some companies understand this truth and fight back hard to ensure they don’t fall victim to it. Veritas Pharmaceuticals (VRT.C) today released a corporate update that, for mine, is a study in how to get it all out there.
They’ve outlined recent news, their business strategy, their all-star lineup of pointy headed academics, and how they hope to turn all that into doughbucks. Frankly, it’s refreshing to have too much information on a company.
Let’s roll through some highlights from the release:
On April 19th, 2016, Veritas Pharma’s Board of Directors was strengthened by the appointment of Dr. Donald R. Carlow. He was the former president and CEO of the British Columbia Cancer Agency as well as principal administrator of various other cancer organizations in Canada.
It might not seem like it at first glance, but this is a ‘holy shit’ piece of news, because Carlow is legit. You don’t get more legit. When you walk into cancer wards at hospitals across Western Canada, you’re likely to pass by a portrait of Carlow because he’s been the guy for as long as there’s been a guy. If your goal is to work with cancer agencies to provide the perfect strain of weed to aid cancer patients, having Carlow making the calls to said agencies cannot be overstated in terms of importance.
Veritas Pharma, through two tranches of non-brokered private placement, accumulated aggregate gross proceeds of $1,116,000. The Company is investing these funds in Cannevert Therapeutics Ltd., a Vancouver, BC company made up of academics at The University of British Columbia. Their goal is to discover new Cannabis strains for specific disease conditions. Cannevert is also attempting to match much of this money with the help of academic-industry grants as well as scientific tax credits.
Important. When Veritas raises cash for its research arm, those dollars invariably land on research grant applications and are either matched dollar-for-dollar or matched several times over.
Non-dilutive capital, baby. It’s what’s hot this summer.
On May 3rd Veritas announced that Cannevert Therapeutics received a Health Canada exemption to legally purchase cannabis from a designated supplier for research purposes. This was a significant event for Cannevert in that it could now fully conduct chemical and pharmacological screening assays to determine the therapeutic potential of a variety of cannabis cultivars.
In the US, and most of the world frankly, you might have a notion to study the effects of marijuana on humans, but getting your hands on enough to study with is problematic. For a start, it’s federally illegal, and even if you can theoretically jaunt down to an Oregon dispensary and buy a bunch of weed over the counter, if you’re at all concerned about your academic future, you actually can’t.
And even if you did, knowing where that weed came from, how it was grown and processed, what pesticides were tossed on it, and whether it’s actually one strain or a couple tossed together is of extreme importance. If you can’t follow it back to its gene pool, it’s not of use.
Veritas is working with organic licensed BC grower, Whistler Medical Marijuana, in selecting strains, having access to data through it growth, and being able to know every single detail of the crop before it lands on a UBC desk.
Then, VRT’s folks are putting Ph.D candidates on the case.
Once the pharmacological tests are completed, the next step is to take the cannabis strains with the best therapeutic potential and proceed to human clinical trials. This step would firmly establish the clinical utility of each cultivar compared to standard medical treatment. Success of these clinical trials will provide doctors and patients with scientific evidence to recommend and use Veritas proprietary medical marijuana strains with confidence.
We’re talking animal and human trials. Real world testing, the absence of which right now has my own personal doctor refusing to engage with weed. Yes, he knows it works with some things. But what things? And what strain? And what dosage? And what medications might it not work so well beside?
Until someone like VRT proves all this info out, he’s out of the game completely, and that’s marijuana’s big failing right now. It’s just not been put through that FDA-level wringer yet, so hundreds of millions of potential patients will not touch it.
[Veritas] is amongst the first in Canada to scientifically investigate the claims made about the therapeutic benefits of the whole cannabis plant. Veritas’ mission is to discover and develop new proprietary strains for specific disease conditions and to provide patients and physicians with the necessary scientific evidence to use medical marijuana with confidence.
The ganj’ enthusiasts out there are rolling their eyes right now, saying “we already know it works, just start prescribing it”, and while that’s true, the devil can often be in the details. There was a time when people boiled peaches, until it was discovered that boiled peach pits emit cyanide. St John’s Wort is a herb with anti-depressant qualities. It’ll also kill a cow and turn your cat into a tweaker. Chocolate is tasty as all get out. But it will kill your dog.
This is why we test things. ‘May cause paranoia’ or ‘may reduce reaction times when driving’ are things that matter, and need to be laid out properly, in full, so that doctors can do their jobs effectively. Even if that means it takes a few years for weed to become accepted by the medical establishment, which it needs to be if it’s to become accepted by insurance companies, which it needs to be if you’re going to be permitted to have it in your blood stream at work.
Part of the potential bonanza for medical marijuana as an industry is its benefit in treating children for some conditions. But, right now in Canada, that’s not permitted. And until companies like Veritas get their hands into this and figure out the harm/benefit profile, and what strain works, and why, and how much of it… kids will continue to suffer seizures.
while the Jodie Emery’s of the world rush out to hand out free samples and open dispensaries and hope the cops bust their door down so they can claim they’re being persecuted, the reality is they’re in the way of real progress. They make acceptance harder. While Veritas is doing what’s necessary to break the walls down.
1.First, we aim to chemically profile different marijuana cultivars.
2.Subsequently, those same cultivars will be pharmacologically profiled in the search for disease-specific strains.
3.Finally, we aim to perform clinical trials to establish the clinical utility of each cultivar administrated as a dried leaf or an oil extract.
My only complaint about the Veritas situation is that last one. Nobody needs to smoke their medicine, and while oils would be great, there’s not a lot of pharmacies out there handing out oils to treat patients. Pharma-produced tablets are the obvious best option, but due to Health Canada restrictions, Veritas has to work within what’s allowable, and that means dried leaf… for now.
Another hesitation for a lot of potential investors in research stocks is, who the hell is actually doing the research? We’ve all seen a host of weed companies without grow licenses claim they’re going to ‘open a lab’, and when one of them does, you invariably find a bunch of equipment sourced from eBay that is surrounded by white coated guys holding clipboards looking very seriously at the machine that goes ‘ding’.
This is not that.
To achieve above goals, Veritas Pharma is investing in Cannevert Therapeutics, which consists of a team of chemists, pharmacologists and anesthetists with a successful track record of drug discovery and development. Veritas CEO Dr. Franciosi commented, “Investing in Cannevert will enable Veritas to be at the forefront of this evolving industry. These scientists have the rare skills necessary to discover new medicines, with a history of generating over $1 billion worth of investor value. They will likely repeat their success again, this time through development of new and unique strains of medical cannabis for a variety of unmet medical needs.”
Two things: First, there’s an obvious track record here. This is a team of researchers that has runs on the board. They’ve already been through this process with other treatments, proved them out, and monetized them.
Second thing, If Veritas was to do its own research, it’s shut off from grant money. By investing in Cannevert instead, they’re investing in a group that has access to potentially millions in government and grant money – non-dilutive capital, once again.
I’m not going to go into the lethal lineup of Ph.D’s attached to this outfit, but you can look at them all here. It’s a long list. These are the guys you go to when you really want guys you can go to.
Veritas was one of my first site sponsors. I own stock in it. And in the time I’ve been working with them, not only have they impressed me with their strategy, their ability to hit milestones, and their honesty in what they’re doing, but they’ve also held value in a public company that, traditionally, is the sort of company that daytraders would pick on.
Gaps in news, a stock that’s halfway to a buck, timelines to revenue that may be longer than some others – it’s a situation that, frankly, you’d expect short sellers to fuck with. But the Veritas team has held strong and I can only put that to the idea that they’ve brought in solid long term investors rather than the usual network of vancouver stock flippers.
There’s some way to go yet. But they’re receiving strains from Whistler and they’ve got Tilray set to do the extracting, as I understand it, so they’re not exactly putting hype over substance.
Keep watching. I expect there’s action to come.
— Chris Parry
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.