Canntab Therapeutics (PILL.C) has been around the block and then some. The Ontario-based pharmaceutical answer to medicinal cannabis, has pioneered a patented process to turn CBD, THC and terpene and other cannabinoid distillates into hard-pressed pills that reliably deliver accurately measured dosages with optimal bioavailability.
The company’s instant release and extended-release formulations round out a growing library of patented IP which Canntab has leveraged into a product pipeline of THC, CBD tablets including a line of oral dissolving THC, CBD tablets.
Legalized cannabis and the sector that surrounds it, has hit a reality trough and as such, companies like Canntab have taken a valuation beatdown, dropping 95.33% from its $15.00 per share high back in January 2018. You can check out an in-depth analysis of Canntab’s technical performance here.
Despite this the company continued to move ahead and during the pandemic, it commenced delivery in December 2020, of its hard-pressed pills to its partner Medipharm for sales and distribution.
It’s never easy
Unfortunately, this is where the company took some hard knocks that have left it to re-establish its footing. Near the end of May, company co-founder, director and president, Jeffrey Ward Renwick, succumbed to cancer after a 15-month long battle.
Then on May 31, 2021, the company was made aware that all the pills it had shipped to Medipharm, were going to be returned because their sales partner failed to sell.
This return caused the company to write down over $900,000 in recognized revenue while still owing over $200,000 to Medipharm for supplying the distillate for Canntab’s pills. Canntab can sell said pills themselves to offset costs and regain a portion of its lost recognized revenue.
Moving forward
In the face of these challenges, the company remade its marketing strategy by actively engaging the Ontario Cannabis Retail Corporation (OCS) and obtaining the necessary THC listing to introduce their tablets to the Ontario market. With a CBD listing expected on OCS’ next listing allotment, Canntab executed a Master Cannabis Supply Agreement with OCS that will see the company’s product on shelves of the 1,000 stores OCS regulates by November 9, 2021.
Canntab is also building on the export license it was granted by Health Canada back at the end of March by powering up to fulfill the $406,200 CAD purchase order it received from Cann Global Limited (ASX.CBG) of Australia. The company shipped 10% of the order in Q1 2022 and has received the necessary import permits from Australian authorities for the second part of the order.
As of May 31, 2021, the company was in the final stages of received the required amendments to its Health Canada License to sell 12 approved SKU’s directly to the consumer. Canntab management is also in advanced discussions to sell their products to established pharmaceutical and medical groups, First Nations Indigenous communities in Ontario as well as looking to build on its international successes by opening dialogues in England and New Zealand.
Besides products, Canntab is in discussions with European and US based groups to license its technologies.
Canntab’s bottom line still bleeds red with the company reporting a net and comprehensive loss of $2,304,324 for Q4 2021. This is substantially more that Q4 2020’s loss of $873,361. The difference can be explained with the company’s latest marketing push, but Canntab needs to start showing revenue. Admittedly this year was basically a write-off due to the Medipharm deal, so I am expecting the numbers to be markedly different and more positive if executives can reach their expected milestones. You can find a detailed fundamental analysis by our own T.K. Ndechena here.
One of the key factors that will make or break Canntab’s success is management. The August appointment of Larry Latowsky as CEO helps offset the void left by Renwick’s unfortunate departure. Latowsky brings necessary marketing experience and sizable industry connections to the company as he currently serves as chairman and CEO of Top Drug Corp., an independent pharmacy banner program for Ontario pharmacies. He also performed as the chairman for Well.ca, a Canadian e-commerce retailer that specializes in health, beauty, baby, home, green and natural products, and acted as president and CEO of Katz Group Drug Trading which was sold to McKesson Corporation in 2016 for $920 million.
Canntab announced another partnership with 36Eight Technologies on Monday, where 36Eight agreed to list, market, and support all of Canntab’s market-exclusive and patent-protected solid and exact dose products. Hopefully this pans out better than the Medipharm agreement.
So where does this leave you the investor?
Canntab has history, it has a library of patented IP, a novel and necessary offering, and a pathway for growth. Sure, legal cannabis isn’t the hot ticket it used to be, but its there and isn’t going anywhere. If Canntab can successfully navigate the next 12 months with sales and a relatively positive bottom line, it could cement itself into the foundation of medical cannabis – a market expected to reach $46.18 billion USD by 2026. All this remains to be seen, however. For more opinions on the company and its potential, check out the Investor Roundtable here. Good luck to all!
–Gaalen Engen
