Did Ascent (ASNT.C) just unlock a money vault?

Ascent (ASNT.C) is a brand-new weed company with market cap of about $220 million.

We first wrote about ASNT on August 8, 2018 – 24 hours before the stock starting trading.

“I invested in this group years before it came to the market,” wrote Equity Guru’s Chris Parry, “Because that’s how good they were. These were young, smart, driven, no bullshit guys who didn’t take the easy money early but instead insisted on laying the foundation for something epic.”

After walking through ASNT’s oils extraction and formulation facility Agrima Labs, Parry declared it “a monster”.

October is coming, and with it will come new rules, presumably allowing many more things that Ascent has either already developed, or will develop. They also plan to create IP for sale in the US and other parts of the world, where things like edibles may be more legal than here.

The next day, August 9, 2018 – the stock starting trading.  It’s been steadily gathering investor interest since then – but hasn’t experienced the vertiginous multiples of many other junior weed plays.

[Let’s stop for a moment.  Breathe in an out.  Acknowledge the fact that in this investor feeding frenzy – a 60% gain in 6 weeks is considered “modest”.]

On Sept. 20, 2018 Ascent announced that its 100% owned subsidiary, Agrima Botanicals “has developed proprietary methodology for producing a variety of discrete, water-soluble cannabinoids, both in powder and liquid form.”

This is the geeky end of the weed business but it can be dramatically profitable.

Case in point: in 1856 a French microbiologist named Louis Pasteur discovered that heating wine stopped it going bad.  Pasteur figured out the optimum time and temperature to kill the malevolent microbes – while retaining the wine’s flavor and smell.

‘Pasteurization” is now used in the production of milk, butter, cheese, wine, yogurt, beer etc.  Global yearly sales of pasteurized products are now $1.4 trillion.

“Cannabinoids in their natural state are oil-based and non-water soluble, making it challenging for beverage makers and edibles manufacturers to evenly suspend and standardize their product mixtures,” stated the Ascent press release, “Water-soluble cannabinoids emulsify evenly, allowing both beverage and edibles makers to completely standardize their product mixtures, giving end-consumers a consistent, high quality product experience.”

Ascent already has an international platform to launch the new tech into.

CANADA

Production Capacity – additional cultivation and manufacturing space, with the acquisition of Agrima Meadows, a 600,000 square foot greenhouse, closing Q3 2018, with expected operational readiness in Q4 2018.

Agrima Labs – manufacturing facility, is expected to be ready to commence operations in Q4 2018.

Licensing – anticipated receivin a Sales Licence and second site LP licenses for Agrima Meadows and Agrima Labs over the next several months.

USA

Licensed Operations Expansion – Sweet Cannabis is actively pursuing cultivation and extraction opportunities in various states, with a strong focus on California opportunities.

Hemp/CBD – Invested in Agtech Scientific, a Canadian corporation based in  Kentucky that develops hemp-derived, CBD-based medicinal formulas to be used in various  health and wellness applications. Agtech is partnered with major universities to produce clinical research supporting the benefits of CBD-based products.

EUROPE

Denmark – Agrima Botanicals has applied for a level 10 controlled drug license in Denmark, and made applications under the medical cannabis pilot program with the Danish Medicine Agency, including applications for the approval of eight cannabis derivative products that are currently in formal review.

Buried in the September 20, 2018 press release is another important subplot.

“Water-soluble cannabinoids have a faster activation time of approximately 10-15 minutes in the human body, compared to 30-45 minutes generally for oil-based delivery methods. These effects generally wear off within two hours compared to 4-6 hours with traditional oil-based products.”

Did you catch that?

What that means is you can eat a water-soluble Agrima Labs product over lunch – head back to work and not be a blithering idiot.

The lunch-time weed chillout could gain cultural acceptance in the same way you see executives in Paris downing a bottle of red wine at noon any monday-friday.

This tech expands ASNT’s IP footprint, and moves Ascent closer to become “a leading provider of cannabinoid formulates”.

Ascent anticipates that it can “provide large quantities of water-soluble formulate to beverage and edibles manufacturers as an input ingredient.”  The discrete cannabinoids will include THC, CBD, CBN and CBG distillates.

“Ascent continues to be at the forefront of cannabis extraction and formulation technology,” stated Philip Campbell, CEO of Ascent, “We are well positioned to be a leader in providing our water soluble and other bulk formulates to product manufacturers around the world.”

Aurora Cannabis (ACB.T) signed a supply deal with ASNT in June.

Under the terms of the Agreement, Agrima will supply Aurora with up to 20,000 kg of dried cannabis flower and up to 6,000 kg of cannabis trim per year from its Canadian cultivation facilities. The Agreement is effective for a term of five years, subject to a 12,000 kg per year minimum.

Ascent is now adding the water-soluble IP to its patent portfolio.

On September 20, 2018 the stock was up 7% (.70-.75) by mid-morning.

Full Disclosure: Ascent is an Equity Guru marketing client, and we own stock.

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.

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4 Comments on "Did Ascent (ASNT.C) just unlock a money vault?"

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Randy
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I was highly intrigued by Chris’s June 22nd article and introduction of Ascent. Since that time I’ve positively wanting to buy-in but waiting for an optimal entry point. With the highest resect Lukas; why no mention or comparison of Sproutly / Infusion Biosciences who (reportedly) developed water soluble cannabinoids first? It now seems there are two companies on the planet which have this prized technology. In my view this was the precise uniqueness of Sproutly who owned a proprietary (patented) process or at least an end product in which no one else (had)…and many companies would likely want to assimilate… Read more »
Lukas Kane
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Randy, Sproutly CEO Keith Dolo, did address this in an August 1, 2018 article: “We can’t say that no one will ever try to replicate or discover what IBS has achieved…it will be difficult for anyone to replicate, and if they do, our patent covers the process and the reagents together.” I’m not a chemist, and can not make a qualitative comparative judgement on the two technologies, but my understanding is that they are working in slightly different niches. Both companies have diverse business models. It’s powerful when a company can say, “We are the only company who can do… Read more »
Randy
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[ EDIT ] I was highly intrigued by Chris’s ”August 8th” article and introduction of Ascent.

Randy
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Lukas, Thank you very kindly for the quick response and the great explanation! All understood. This answered the core of what I seemed to be missing and was mostly concerned about. Specifically, if Ascent had developed the same (or virtually the same) tech & science. I’m so glad the science and niches are different. It occurred to me after my post, the possibility of a legal battle over the encroachment of Sproutly’s patent(s). There’s little doubt on what this could do to the share price of both. I’ll still be doing that ongoing research & have that eagle eye on… Read more »