Lexaria Targets Cannabinoids, Tobacco, Hemp, and Pharma Markets with New Subsidiaries
November 13th, 2018
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The cannabis industry is projected to generation hundreds of billions of dollars of revenue over the coming years, driven by the legalization of medical and recreational cannabis across North America. While many investors are focused on cultivation or dispensary operations, drug delivery technologies may represent an even bigger opportunity. These companies have an opportunity to license their technology and earn high-margin royalties from the industry.
Lexaria Bioscience Corp.’s (OTCQX: LXRP) (CSE: LXX) DehydraTECH drug delivery platform could deliver a three-fold improvement to the bioavailability of cannabinoids, which could be compelling for both medical and recreational companies. In addition, the company believes that the platform has even wider implications across the pharmaceutical and tobacco industries—potentially unlocking billions of dollars in market potential.
Divide and Conquer
Lexaria recently announced the creation of four wholly-owned subsidiaries, each focused on distinct customer bases and business applications. By establishing different subsidiaries, the company will be able to better-focus its research efforts in each area and different financing structures can be used depending on the situation. These different market opportunities could also be spun off much easier down the road.
The four new subsidiaries include:
- Lexaria CanPharm Corp.: Lexaria CanPharm Corp. is a Canadian company focused on providing DehydraTECH technology and other enhancements to the global cannabis industry. Currently, the company is in active discussions related to licensing its technology to companies located in Canada, the U.S., and Europe.
- Lexaria Nicotine Corp.: Lexaria Nicotine Corp. is a U.S. company focused on providing DehydraTECH technology to the global nicotine and tobacco industries. Since 2017, the company has had discussions with several leading tobacco companies around the world and will continue to work towards healthier consumer outcomes.
- Lexaria Hemp Corp.: Lexaria Hemp Corp. is a U.S. company focused on providing DehydraTECH to the rapidly growing hemp-based food and supplements industry. Currently, the company is in discussions with many companies regarding the use of CBD-from-hemp products in the U.S. and Canada.
- Lexaria Pharmaceutical Corp.: Lexaria Pharmaceutical Corp. is a U.S. company focused on licensing DehydraTECH to the large and diverse pharmaceutical sectors, including pain relief, vitamins, PDE5 inhibitors, hormone treatments, CNS conditions, and many other medical conditions.
The company’s growing patent portfolio – already 10 patents granted and over 50 pending – will be divided across these subsidiaries to maximize potential licensing revenue.
Lexaria’s proprietary DehydraTECH drug delivery platform is designed to improve the bioavailability of active pharmaceutical ingredients (APIs), as well as make dosing more predictable across patient populations.
By combining APIs with fatty acid oil, applying food carrier particles, and performing a dehydration procedure, the technology masks the taste of underlying ingredients and ensures quick and effective transportation into the bloodstream without degradation in the stomach or liver (e.g. first pass metabolism). Early animal studies have shown that the approach could significantly improve the bioavailability of a wide range of APIs—including cannabinoids.
In a recent clinical study, cannabidiol (CBD) absorption rates were more than three-times higher than the control at the 30-minute mark and continued to significantly surpass control blood level concentrations through the 360-minute measurement. Interestingly, the CBD absorption was even better than GW Pharmaceuticals’ (NASDAQ: GWPH) Mount Sinai study, which used much higher doses of 400 mg and 800 mg to achieve lower blood concentrations.
Lexaria Bioscience Corp.’s (OTCQX: LXRP) (CSE: LXX) decision to establish four new subsidiaries will help it capitalize on different market opportunities.
In addition to these developments, the company announced that it will utilize its wholly-owned Poviva Tea Corp. to advance existing ViPova Tea and Coffee consumer brands. Recent legislation in the U.s. supports the possibility of renewed distribution for these brands. These developments could help improve revenue over the intermediate-term.
For more information, visit the company’s website.
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