Abattis Bioceuticals Expanding Downstream Cannabis Business into Ontario


Robin Lefferts

July 24th, 2018

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Abattis Bioceuticals Corp. (CSE: ATT) (OTCQB: ATTBF) has been solidifying and growing its vertically integrated cannabis operations in British Columbia for the last few years. With a licensed producer applicant, cannabis-based product development programs, and a mature product distribution network, Abattis is positioned to control and profit from the highest growth sectors of Canada’s cannabis industry. The company’s recent agreement to develop a new laboratory in Ontario represents a major expansion into Canada’s most populous province.

The Importance of Heading East

Abattis has national aspirations, certainly for its own lines of cannabis-related products but also for its lab services. Laboratories holding dealers licenses offer a host of important services, including: R&D, formulation, and manufacturing of cannabis products; extraction of cannabis oils; and testing and analytics for licensed producers. Having a lab in Ontario greatly expands the company’s reach.

Ontario is home to almost 40% of Canada’s people, and a staggering 60 out of the 112 total licensed producers currently approved in the country. When combined with BC’s 24 current licenses, Abattis will be offering critical lab services (contingent on completion and licensing of the Ontario operation) in provinces with 75% of the nation’s licensed producers and about 50% of the total population.

The lab will be located in Belleville, between Toronto and Ottawa, in a 320,000 square foot building judged to be suitable for a medical cannabis research laboratory by an outside consultant. The plan is to build the initial 10,000 sf operation in the building and expand as needed. The joint venture, with XLABS Therapeutics (ONT) Inc. (XLABS), is intended to create an extraction, purification, formulation, and production giant in the heart of Canada’s population and LP center.

Abattis recently completed the sale of its remaining interest in Northern Vine Labs, the small operation in British Columbia. Northern Vine was an excellent pilot lab for Abattis and a useful launching point for greater ambitions. Using the lessons learned over the last few years there, the company is focusing its efforts on the highest margin and highest upside aspects of the laboratory business in its new Ontario venture. Basically, the name of the new game is industrial scale extraction and consumer product development.

How It All Fits Together

Abattis has been busy over the last few months, developing and advancing all aspects of its comprehensive business plan. The company’s 100% owned subsidiary, late-stage licensed producer applicant Gabriola Green Farms, is constructing a cultivation and extraction facility in a final push to secure licensed producer status. Controlling its own raw material production is an important step for Abattis, both from a financial/bottom line and a product development/quality control standpoint.

Through its wholly-owned subsidiary Green Tree Therapeutics, Abattis has introduced three new cutting edge, Abattis branded vaporizers to the retail market. These types of products, along with other alternative methods of cannabinoid delivery, represent a fast growing segment of the cannabis market. Consumers are moving away from smoking, for health reasons and for reasons of convenience and public perception, and toward vaping, sublinguals, creams, and oils. Going forward, through Gabriola’s pending license to produce, Abattis would be able to load its vaporizer line with its own cannabinoid formulations and sell directly to consumers.

Many of these product categories are in their infancy, and Abattis is developing and distributing them using all arms of its operation. Products can be formulated for other companies on a white-label basis, or they can be developed for in-house brands. The company is developing a variety of cannabis-based beverages in partnership with other companies, and offers its own CBD sunscreen.

Abattis’ Vergence Naturals subsidiary is key in the company’s distribution model. With an established network of retail distribution, and a recently-launched marketing campaign to increase sales both through distribution partners and through the company’s own e-commerce site, Vergence plays a large role in monetizing Abattis’ expanding product line.

Additionally, Abattis is invested in one, and has a strategic partnership with another, blockchain technology company to help it keep track of product development history, sales, testing results, and similar data. The technology provides completely reliable records to the satisfaction of regulators and customers alike, and saves the company time and money by streamlining Abattis’ processes.

All of these initiatives together show a company constantly widening its reach into the most profitable and high growth sectors of the cannabis industry. Abattis is not racing the mega-producers to see who can grow the most cannabis flower. Instead, it is supporting these producers with critical lab services and product development capabilities. Meanwhile, Abattis is building its own empire, from seed to sale, of cannabis derived products across a wide variety of  industry niches.

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