Abattis (ATTBF) Targets Emerging Markets with Nutraceutical Business
Ryan Allway
November 27th, 2016
News, Top Story
Abattis Bioceuticals Corp. (OTCQB: ATTBF) (CSE: ATT) is best-known for its Northern Vine Labs™ subsidiary that aims to become a leading cannabis testing and formulation facility, but its Vergence Sales & Marketing Group subsidiary is expected to contribute just as much revenue next year. With the establishment of contractual relationships in Asia in Q3 and Q4 of fiscal 2016, the Vergence subsidiary dovetails nicely with its Northern Vine subsidiary as it moves into the formulation business.
In this article, we will take a closer look at Vergence and its critical role within the company, as well as some near-term catalysts that could propel revenue and profit higher.
Building a Marketing Arm
Abattis Bioceuticals’ Vergence subsidiary consists of a team of bioceutical marketing specialists focused on cultivating natural, safe, and effective health products. Initially, the company will focus on products that reduce pain caused by inflammation, boost immunity, and increase nutrient absorption. Natural remedies have the potential to address these issues without the need to resort to pharmaceuticals and lengthy clinical trials.
The company plans to build a portfolio of natural formulations and innovative brands that enhance quality of life. Currently, Vergence’s brands include Noxx™ Botanical Blends, Comfort White Willow Blend, Soothe Ginseng Root Blend, Sassy™, and Phyto[NOS]™ Nitric Oxide Production. Over time, the company plans to develop new products that it can sell into numerous end markets around the world.
Vergence complements the company’s Northern Vine subsidiary. With plans to formulate hemp-derived cannabinoids, Northern Vine will enable the sales and marketing arm to introduce innovative new products into a hot market. Hemp-based CBDs, for example, have become extremely popular as the medicinal benefits of the hemp plant become more apparent. According to The CBD Report, recently published by The Hemp Business Journal, the U.S. hemp-derived CBD market will total about $115 million this year. The report estimates the overall U.S. CBD market to grow to $2.1 billion by 2020, with $450 million of that accounted for by hemp derivatives.
Expansion into China & Korea
Abattis Bioceuticals recently announced an international co-branding and licensing agreement with Green Nature Health Care Products Inc. of China – a leading importer of dried fruit products. Green Nature supplies 200 food based supply chains including Shanghai Duty Free with five stores, Yangzhou Pharmacy with 20 stores, and Wal-Mart with 388 stores. Green Nature’s products are also found in Canada at TNT Markets and ~50 healthcare product stores.
Under the terms of the agreement, Vergence will capitalize on Green Nature’s local ingredient sourcing and import/export expertise by re-branding its existing products and partaking in its sales and marketing channels worldwide. The agreement also gives Abattis Bioceuticals the right to acquire Green Nature, subject to an independent valuation, by issuing common stock, which could open the door to further expansion into new markets.
The Green Nature agreement follows a recent memorandum of understanding with Global Damon Pharmaceuticals of South Korea to develop and formulate two products and distribute them under license in South Korea. Management plans to execute a definitive agreement with GD Pharmaceuticals by the end of the calendar year. The initial research and feasibility stage will expire on June 30, 2017 after which there will be an option to renew for 24 months.
The global nutraceutical market is expected to reach $250 billion by 2018, according to Nutraceuticals World, with the market consisting of dietary supplements, and functional foods and beverages. Asia and North America are two areas driving the majority of the growth, and these relationships with established Asian channel partners will only help Abattis grow its business in the coming years.
Looking Ahead
Abattis Bioceuticals Corp. (OTCQB: ATTBF) (CSE: ATT) may be best known for its Northern Vine subsidiary, but investors shouldn’t discount its Vergence Sales & Marketing business. With recent agreements in China and South Korea, the company is focused on building up valuable sales and marketing channels for wellness products. These channels can be leveraged by its Northern Vine subsidiary when formulating hemp-based cannabinoid products.
For more information, visit the company’s website at www.abattis.com.
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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