GB Sciences Resets: Licensed Cultivator and Biopharma
Ryan Allway
January 23rd, 2017
News, Top News
GB Sciences Inc. (OTCQB: GBLX) recently completed a pivot away from developing agricultural technologies and toward medical marijuana cultivation and cannabinoid biopharmaceutical development. By doing so, the company aims to generate near-term revenue to help offset the cost of developing cannabinoid-based biopharmaceuticals with blockbuster potential. Investors may want to take a closer look at the stock given the new focus.
In this article, we will take a closer look at the company’s change in focus and why shareholders may want to consider the stock for their portfolios.
Medical Research Focus
GB Sciences believes that cannabinoid-based biopharmaceuticals represent the largest opportunity for the industry. Under the leadership of Chief Science Officer Dr. Andrea Small-Howard, the company has already filed the first of several patents covering complex cannabinoid-containing mixtures capable of enhancing dopamine secretion and protecting neurons from mitochondria-induced free radical damage from neurological disorders.
Dr. Small-Howard is uniquely qualified to bring cannabinoid-based drugs to market with fifteen years of experience studying cannabinoids and the endocannabinoid system, as well as immunology and cancer treatments. She has been instrumental in securing regulatory approvals from the FDA and international regulatory bodies and has been intimately involved in helping states develop medical cannabis regulations.
Cannabinoid-based pharmaceuticals – like all pharmaceuticals – enjoy a combination of exclusivity and patent protection. New patents are often valid for a 20-year period from the point of application, while exclusivity periods can last between six months and seven years depending on the indication. The company enjoys these benefits along with a lower cost since they are using cannabinoids that have already generated a lot of related data.
Cultivation Cash Flow
The drug discovery process is often very expensive and takes several years to complete. According to the Tufts R&D Cost Study, the average cost to develop and gain marketing approval for a new drug was about $2.6 billion. The development of cannabinoid-based compounds is expected to be significantly cheaper given the nature of the drug, but the process is still both time-consuming and potentially expensive.
GB Sciences plans to mitigate these costs by generating near-term cash flow from the sale of medical marijuana. Recently, the company opened its Las Vegas production facility and anticipates generating initial revenue this quarter. The company also acquired two other Nevada licenses that will be folded into the production facility and expand the scope of its business to include oil extraction/production and other services.
The company hopes to expand its footprint throughout the United States. Currently, the team is actively applying for a cultivation and production license in California that it hopes to secure within the next 12 months. This license could produce significant long-term revenue for the company given California’s status as the largest cannabis market in the country. Other opportunities are being explored in Texas, Pennsylvania, and Florida.
Looking Ahead
GB Sciences Inc. (OTCQB: GBLX) trades with a market capitalization of just under $30 million despite generating near-term revenue and developing a robust clinical pipeline. After raising $6 million in fresh capital, the company has opened its cultivation facility in Nevada and is set to generate near-term cash flow while pursuing its ambitious cannabinoid-focused R&D.
For more information, visit the company’s website at www.growblox.com or visit CannabisFN’s profile at www.cannabisfn.com/mdc/growblox-sciences-inc/.
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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