Liberty Leaf (LIB.C) seeks to be a major player in the CBD-based pet therapeutic market and made a definitive move in that regard when the company announced today that it had inked a research agreement with Esev R&D LLC, a New York City-based research and development company.
According to the news release, the agreement lasts for three years and has an option to extend for an additional one-year.
During that time, Liberty Leaf will pay an aggregate amount of US$160,000 for up to four proprietary CBD formulations.
Esev will organize and oversee clinical trials of each formulation to gauge the efficacy of a non-psychoactive, phyto-cannabinoid therapy for pets diagnosed with specific common pet ailments.
For its efforts, Esev will receive a 5% royalty for six years on gross sales for each successfully commercialized CBD formulation.
Company President and CEO, Will Rascan, commented, “Veterinarians have been quietly recommending CBD derived supplements to pets and we view this as an untapped market to position Liberty Leaf in. CBD pet products such as oils and chews are quickly gaining traction with pet owners to treat suffering from a variety of ailments such as arthritic pain associated with age, anxiety issues and the side effects associated with cancer treatments. Just as we’ve seen the use of cannabis and CBD grow in popularity to treat people by using natural products versus pharmaceuticals, it only stands to reason that the same approach will be used for the pets we all care about.”
Giving CBDs to pets is easy if you have a dispensary within walking distance and you are a card-carrying member, but getting a veterinarian to legally prescribe them is impossible for two reasons: Law, and as a result, Science.
In December, the US DEA quietly went and classified CBDs as a Schedule 1 drug with no medicinal use.
In many states in the U.S., veterinarians aren’t even allowed to discuss CBDs with pet owners. This won’t change until the DEA gets its head out of its ass and reclassifies the drug.
However, even if the DEA finally uses some common sense, veterinarians will still be hesitant to write up a CBD-based treatment for your aging Bassett Hound.
CBDs’ legislated connection to cannabis kept it out of the lab. As such, there is a dearth of FDA-accepted clinical research on effects, dosage and safety of CBD-based therapies in animals.
So even though more veterinarians agree that CBD-based therapies in specific instances appear to have beneficial effects for animals, they aren’t willing to gamble your pet’s health on a jumbled collection of anecdotal data given to you by the dude at the dispensary.
So, what does this mean for the space?
Nutriceuticals are big, especially for pets. I mean, the pet industry in the U.S. alone was worth US$60.28 billion in 2015 and US$14.28 billion of that was spent on supplies and over-the-counter medicine.
Liberty is by no means a first mover. Companies like Treatibles, Canna-Pet and Auntie Delores are all counting on the growing popularity of CBD-based wellness and medical therapies for pets, but the space is so new and fraught with both legal and scientific challenges, it’s hard to tell how this will all play out.
Therefore, Liberty Leaf has its work cut out for it if it intends to penetrate and dominate this evolving nascent market.
Teaming with Esev is a significant move in the right direction, though, as Rascan affirmed, “On a corporate level, this latest transaction furthers our ongoing efforts to partner with leading researchers in the fast-growing CBD market place. One needs to look no further than Esev’s recent genetic research partnership with Aphria, a leading Canadian-licensed cannabis producer, as to the quality of Esev’s team. Together with Esev, we look forward to commercializing our proprietary CBD formulations to market through a network of pet care manufacturers and distributors of the highest caliber.”
Now all that’s left is the execution.
FULL DISCLOSURE: Liberty Leaf is an EQUITY.GURU client.