Abattis Addresses Key Shortcomings in Canada’s Cannabis Industry


Ryan Allway

February 8th, 2017

News, Top News


The Canadian cannabis industry could see $4.9 billion to $8.7 billion in annual sales after recreational legalization in enacted, according to Deloitte, with ancillary goods and services pushing that figure to between $12.7 billion and $22.6 billion. These figures have attracted a growing number of companies and investors to the lucrative market and even minted the first cannabis ‘unicorn’ in Canopy Growth Corp. (TSX: CGC) (OTC: TWMJF).

But, the industry’s rapid growth hasn’t come without growing pains. Two licensed producers (LP’s) voluntarily recalled hundreds of grams of dried marijuana in recent weeks after traces of controversial, banned pesticides were detected in their supplies. On Feb 7th, 2017, yet another Globe and Mail article highlighted the immediate need for testing and Health Canada is now preparing to introduce random testing on the licensed producers in an effort to clamp down on the problem. When asked why mandatory testing was not yet implemented for all LP’s, a Health Canada senior official stated he believed “there is only about three labs in Canada that could perform such testing, and there would be a backlog.” As cannabis prices are expected to drop due to continuous supply hitting the market, companies with licensed testing abilities may represent the first sign of profitability for Canada’s fiery cannabis landscape.

In this article, we will take a look at Abattis Bioceuticals Inc. (CSE: AT) (OTC: ATTBF) and its efforts to help licensed producers avoid these issues through its Northern Vine Labs subsidiary that provides comprehensive testing services.

Rules & Testing Requirements

Health Canada has released three different versions of the regulations governing the production and sale of medical cannabis over the past couple years. The latest iteration of the regulations – known as the Access to Cannabis for Medical Purposes Regulations (“ACMPR”) – was released in August 2016 to replace the Marijuana for Medical Purposes Regulations (“MMPR”). These new regulations resolved several key issues, but loopholes in the system remain.

The health agency has approved 13 pesticides for use on cannabis, which are all low-toxicity products including some approved for use in ‘organic’ production. Licensed producers that use only the 13 approved pesticides – or no pesticides at all – do not need to test for pesticides since there are no established maximum upper limits, according to Anandia Labs. In essence, this means that LPs should not require any testing at all if they’re in compliance.

Of course, many licensed producers still conduct pesticide analysis as a precautionary measure to catch any problems before they become large problems. The issue is that most pesticide tests are based on USB or EB lists – which are commonplace among other cash crops – and don’t test for banned pesticides like bifenazate, myclobutanil, or imidacloprid that were found in recalled dried marijuana products earlier this year.

The industry has become increasingly proactive about the matter over time. The Cannabis Trade Alliance of Canada, for example, which represents licensed producers, recommended that new laws provide for mandatory testing, saying, “mandatory laboratory testing of all cannabis products (potency and contaminants) [is] a clinical step in the seed-to-sale process when considering public health and should be the main objective”.

Better Laboratory Testing

Licensed producers looking to avoid issues with pesticides must therefore seek out high-quality laboratories that run comprehensive testing on approved and banned pesticides. These labs should also be capable of running required tests on cannabis edibles and extracts designed to assess cannabinoid concentrations, bioavailability of capsules, and other aspects of the drugs. And of course, third party testing provides a greater level of transparency than in-house options.

Abattis Bioceuticals Inc.’s Northern Vine Labs subsidiary focuses on providing high-quality, independent testing for licensed producers, consumers, and others within Canada’s cannabis industry. With a Controlled Substance License (“CSL”), the company is one of just 18 approved laboratories in the country that offers product certification and quality assurance programs that incorporate best practices and procedures.

Northern Vine appears well positioned in the market as one of just a handful of approved testing facilities in BC. In particular, the company could benefit from the Canadian Cannabis Task Force’s recent recommendation calling for mandatory product testing to “minimize the risk of contaminated products entering the market and to verify the information on labeling”, which could be a cornerstone of the recreational legalization framework.

If successful, the company could also potentially enter the United States market in the future, where cannabis testing has become equally important. While the U.S. market remains less developed on a national scale, there may be opportunities in states like California where management can lean on its past experience running Phytalab – a Washington-based testing provider that once captured nearly 10% of the testing market in the state.

Looking Ahead

Abattis Bioceuticals Corp. (CSE: AT) (OTC: ATTBF) is uniquely positioned to capitalize on Canada’s $22+ billion cannabis industry over the coming years. With the recent recall notices from two licensed producers, pesticide and residue testing has become increasingly important to both companies and consumers. The company’s Northern Vine Laboratories is one of only 18 approved laboratories in the country and could benefit from new upcoming testing regulations.

For more information, visit the company’s website at www.abattis.com or visit CannabisFN’s Company Profile.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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