Canntab Therapeutics Ltd (CSE:PILL, OTCQB:CTABF) has provided an update on several matters impacting the company, including plans to move its manufacturing operations following expiry of its lease at the Markham facility.
The company, which is a leading innovator in cannabinoid and terpene blends in hard pill form for therapeutic applications, said it has undertaken a strategic review in recent months of its domestic operations in the context of the global market.
As previously announced, it concluded that in the absence of a complete pivot away from its core competencies into a crowded consumer market for pre-rolls and vaporizer devices, focusing exclusively on tablet manufacturing for the domestic market is not financially viable, and that it is repositioning its production capabilities to a small batch special order basis, with management focusing its business development efforts to establish licensing partners in non-Canadian markets to exploit the valuable patents held by the company.
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Additionally, Canntab said it received a notice from its landlord on November 17, 2022, indicating that the lease for its Markham manufacturing site will not be extended when it expires on December 31, 2022. Despite its long tenure at the Markham location, the landlord has declined to extend Canntab's lease, the company said.
It said it has contacted Health Canada to engage in discussions to determine how it may retain its various cannabis licenses.
"Canntab has already begun the process of contacting several other Canadian license holders with the intent of moving approximately $600,000 of cannabis inventory to other licensed facilities made up primarily of finished bottled products, bulk tablets, and some cannabis distillate. Canntab expects to realize ongoing revenues from this asset," said Richard Goldstein, co-founder, CFO, and interim CEO of the company.
Canntab said it will also immediately seek to move its production, testing and manufacturing equipment to establish its tablet manufacturing process at another licensed facility in Canada or elsewhere.
As previously announced, the company has already been pursuing a new strategy of focussing on international licensing arrangements, coupled with a royalty regime based on its proprietary and patented technologies.
Canntab received its fourth issued patent and second in Australia on October 6, 2022, entitled ‘Modified release multi-layer cannabinoid formulations’.
The company said it anticipates receiving a similar patent approval sometime in 2023 in both the US and Canada.
Canntab said its intention is to license its proprietary technologies to other parties that will manufacture its tablet formulations in their respective jurisdictions. It intends to transfer the technology and know-how to each licensed entity and discussions spanning several months are well underway with arm's length third parties in Europe, Scandinavia, Africa, Australia, South America and the US.
In addition, Canntab said it is speaking with privately-owned cannabis companies who are looking to secure liquidity through the public markets or otherwise grow their businesses in a merger transaction.
Goldstein added: "We will no longer need to spend the money necessary to maintain Canntab's licensing status at the Markham facility which has not proven to be profitable. We can now operate in a very low overhead environment and focus on licensing and monetizing our intellectual property.”
Contact the author at jon.hopkins@proactiveinvestors.com