KannaLife Sciences

The cannabis industry has been extremely compartmentalized, thanks to state laws enacted in the absence of wider federal legalization and direction. Although states have made a great effort to be thorough, legislation at the state level still imposes restrictions that limit business growth and offer forms of protectionism that promote the exclusion of large corporate consolidation. Entrepreneurs pioneering the industry have responded by maturing their products to better navigate the regulatory environment. What the future will hold is anyone’s guess right now, but national and worldwide cannabis legalization efforts bode well for the future of the industry.

Given that the two broad categories in the cannabis industry are recreational cannabis and medicinal cannabis, the logical conclusion is that products focused on health and wellness will receive the least amount of resistance at the national level. While the recreational market is extremely lucrative, a timeline for federal legalization that would collapse the underground market and open the door to legalized distribution is not on the visible horizon.

Entrepreneurs such as Jamen Shively—former Microsoft Corporate Strategy Manager and the founder of Diego Pellicer, a proposed ”premium” cannabis brand—are resigned to wait out the federal government. Shively, who is planning to open a chain of stores nationally (Citation 1), has met with much controversy. He’s often considered to be the voice of “big marijuana”, even as he represents only a small corner of the market. Some believe that the premium branding model won’t work with marijuana, but Shively is willing to wait as long as it takes to find out.

GrowLife, a company that markets hydroponics equipment for both large and small scale operations, is not handicapped by legalization. But GrowLife still has a significant amount of growth tied to the access that would be afforded by the removal of marijuana prohibition.

All roads to near-term significant growth seem to lead back to health and wellness products. This revelation is not one held by a perceptive few; the flood gates have opened and numerous public companies are looking to develop the next medical breakthrough.

Then there is Medical Marijuana, Inc (MJNA) that has focused on high caliber investments and manufacturing across the cannabis industry. The company’s subsidiary profile reads like a “who’s who” of the next generation of breakout companies that can be invested in on the open market.

A great example of one of these acquisitions is KannaLife Sciences, which holds the exclusive license agreement with the US National Institutes of Health – Office of Technology Transfer (NIH-OTT) for the commercialization of US Patent 6630507, “Cannabinoids as antioxidants and neuroprotectants” (the “‘507 Patent”). KannaLife is permitted to focus their exclusive license agreement on hepatic encephalopathy (HE), a disorder associated with reduced brain function due to various forms of liver toxicity.

Back in February 2013, Medical Marijuana Inc. created a synergistic relationship with CannaVest (CANV) through a licensing arrangement of its PhytoSPHERE assets. CannaVest is using those assets produce its new product lines—Real Scientific Hemp Oil (RSHO), Cibdex™, Cibaderm™—through its subsidiary, US Hemp Oil. These products are all infused with high quality, legal, hemp-based cannabidiol (CBD), the cannabis compound showing significant promise in the treatment of epilepsy, schizophrenia, and cancer. Unlike most of the cannabis products people hear about, hemp-based CBD is legal and can be consumed in all 50 of the United States. CBD doesn’t have the psychotropic effects that are associated with THC, the component in marijuana that produces the “high”. CBD was recently featured in CNN’s Chief Medical Correspondent Dr. Sanjay Gupta’s special documentary, WEED, which highlighted the compound’s ability to treat a form of severe childhood epilepsy known as Dravet Syndrome.

Medical Marijuana, Inc. and its family of companies are now in a transformational phase. Much of the company’s previous activities had been focused on acquisition, strategic partnerships and product development. Now the company is transitioning some of that focus to put the fruits of its labor into the hands of the consumer.

Both MJNA and CANV are now marketed by HempMedsPX, their portfolio and contracted marketing company. HempMedsPX recently turned up the “marketing heat” with its new focused marketing campaign and retention of the medical marijuana industry icon Cheryl Shuman. Ms. Shuman will be joined by Charles Vest, the HempMedsPX VP of Communications on the Ohio Rights Group (ORG) ten day and forty-stop tour.

It’s rare to see an industry that’s not based on information technology have so much potential for growth. While news about the next greatest smart phones dominate the media, the overwhelming evidence of the genuine health and economic benefits of cannabis are filtering into the national discussion like never before. Medical Marijuana Inc. and CannaVest have clear advantages in that they have developed a completely legal product line for those that have a need today and, as such, are already equipped to be trustworthy industry leaders when cannabis is fully legalized. With unique CBD-based products entering the market, and a pharmaceutical pipeline in development, their evolution to be the next company with household name recognition in the US and international markets might be on the horizon.

Disclosure: I am an investor in MJNA and (OTC: CANV) and this article was written on behalf of Medical Marijuana, Inc.

Citations

Citation 1 – Website link: http://video.msnbc.msn.com/msnbc/52723690#52723690

The DOJ Expands Markets for Medical Marijuana, Inc. and Subsidiaries! (mjmarketwatch.wordpress.com)
Can The Cannabis Component Cannabidiol (CBD) Cure Schizophrenia? (mjmarketwatch.wordpress.com)
Medical Marijuana, Inc. and Subsidiary Partners Offer Legal CBD Now! (mjmarketwatch.wordpress.com)
New Product – CBD Simple, Wins High CBD Award at the US Cannabis Cup Seattle 2013 (mjmarketwatch.wordpress.com)
Hemp Veteran Chris Boucher Shares His Insight on the Industry and the New Hemp CBD-Infused Cibaderm Product Line at Natural Products Expo East in Baltimore (mjmarketwatch.wordpress.com)
Medical Marijuana Inc.’s HempMedsPX Retains Medical Marijuana Industry Icon Cheryl Shuman as a … (biomedreports.com)

In the small borough of Doylestown 27 miles north of Philadelphia, lies the Pennsylvania Biotechnology Center of Bucks County. It’s a sprawling 112,000 square foot campus that houses non-profit research organizations and start-up companies. It’s also home to the research of KannaLife Sciences, a subsidiary of Medical Marijuana, Inc’s (MJNA. PK) and CannaVEST Corp (OTC: CANV). KannaLife has made some significant progress over the past year, which could prove very lucrative in the future for investors of MJNA and CANV. Could this small innovative company become the next undiscovered bio-tech play?

The Patent

KannaLife is a late stage bio-pharmaceutical and phyto-medical company that specializes in the research and development (R&D) of pharmacological products derived from plants. The company announced in July of 2012, that it had signed an exclusive license agreement with the “National Institutes of Health – Office of Technology Transfer (“NIH-OTT”) for the Commercialization of U.S. Patent 6,630,507, “Cannabinoids as Antioxidants and Neuroprotectants” (the “‘507 Patent”)” to focus on Hepatic Encephalopathy (HE) which is associated with reduced brain function due to various forms of liver toxicity.

The NIH-OTT website states that “The NIH Office of Technology Transfer evaluates, protects, markets, licenses, monitors, and manages the wide range of NIH and FDA discoveries, inventions, and other intellectual property as mandated by the Federal Technology Transfer Act and related legislation.” They further state that they “are committed to seeing that the public has ongoing access to newer and more effective health care products and procedures.” (Citation 1)

KannaLife is in a truly opportunistic position in that it has licensed from NIH-OTT on an exclusive basis the right to develop its intellectual property into a novel therapeutic treatment for HE with a market potential in the range of $500 million to $1 billion dollars. Kannalife’s proposed target drug candidate would be considered part of a new class of pharmaceuticals designed as neuroprotectants with additional potential therapeutic benefits in reducing oxidative stress.

Kannalife’s pre-clinical research being performed at the Pennsylvania Biotechnology Center located in Doylestown, PA. Kannalife’s R&D at Doylestown is focused on the use of Cannabidiol (CBD) and other potential cannabinoids analogs in selecting its target drug candidate for an Investigational New Drug Application (IND), and possibly an Abbreviated New Drug Application (ANDA) with the United States Food and Drug Administration (FDA).

Cannabidiol (CBD), used in Kannalife’s pre-clinical testing in Doylestown is, in its natural phyto emitting state, a compound which, aside from cannabis sativa and cannabis indica can be successfully derived from the industrial hemp plant seed and stalk. More can be found on CBD in my article Medical Marijuana Incs PhytoSPHERE Systems CBD – A Natural Evolution in Health.

Advancing the Research

In April of this year KannaLife signed a research and development agreements with Advanced Neural Dynamics, Inc. (AND) and IteraMed; both are collaborators with KannaLife located at the Pennsylvania Biotechnology Center in Doylestown.

Advanced Neural Dynamics is providing expertise in the pharmacology of small molecules and neuro-peptides focused on “novel small molecule neuroprotective therapeutics for the treatment of neurological diseases” and IteraMed “offers “value added” organic synthesis, medicinal chemistry consulting, and internal drug discovery” (Citation 2) according KannaLife’s press release. This is an impressive team that’s advancing the work of the government patent developers. Inventor’s of the patent is credited to the following doctors:

Dr. Aiden J. Hampson – National Institute of Mental Health (NIMH) Neuro-Pharmacologist
Dr. Julius Axelrod – Professor Emeritus, NIH Pharmacologist
Dr. Maurizio Grimaldi – Professor Neurology / Neuropsycopharmacology & Toxicology NIMH

Efficacy and Standardization

As KannaLife progresses its drug development, it is also taking steps to provide commercial and regulatory guidance and practices for producing and certifying organic botanical medicaments. Under Kannalife’s certification program it will seek to ensure it and others who subscribe and utilize Kannalife’s quality control (QC) and quality assurance (QA) protocols and processes does so to manufacture and sell quality products that can meet or exceed the standardization controls found in FDA’s Guidance for Industry Botanical Drug Products (June 2004). This guidance, in part, states:

“A traditional herbal preparation, which may have evolved over time, generally has the following characteristics:

• It meets official compendia or other published standards in terms of the botanical identity and plant part used for each botanical raw material.

• In the case of a multi-herb substance, it is composed of the same formulation as a historical formula, with the amount of each botanical ingredient falling within the range of traditional usage.

• It is prepared by the same processing methodology as traditionally used.

• It is used in the traditional manner in terms of therapeutic indication, route and schedule of administration, and quantities or doses.

For initial clinical studies on a botanical drug product that is not currently lawfully marketed in the United States or elsewhere but is prepared, processed, and used by humans according to an established methodology, sufficient information might be available to support the studies without standard nonclinical testing. In general, the considerations listed under section VII.C are applicable.” (the Act), 21 U.S.C. 355(b).

The company recently announced that it was entering into a Joint Venture (JV) with Biotech, Inc. through the creation of South Park Ventures, LLC. The JV taps into the expertise of Biotech in “establishing industry standards for phyto-medical products which includes providing certification, quality control and quality assurance standards for the growing of botanicals for use as medicine”.

As part of the deal, KannaLife also acquired the rights, titles and interests in Cannatol™ a phyto-medical compound produced from “highly standardized, consistent and high yielding organic Cannabidiol phyto stock, free from pesticide and mold contaminants” according the company press releases (Citation 3)

As part of its approach to standardization, KannaLife is marketing a proprietary packaging system to be marketed and sold as under the KannaPak trademark. This system provides for standardized testing, labeling and packaging that has already gained early and timely acceptance from several sizeable industry experts, licensees, and producers in Colorado, California, New Jersey and Connecticut.

Strategic Value

So now what you have with KannaLife is an extension of the over-the-counter (OTC) products of MJNA and CANV such as CanChew Gum and Real Scientific Hemp Oil (RSHO). KannaLife rounds out the health and wellness corporate profiles of both MJNA and CANV by adding a phyto-medical and pharmaceutical company to its portfolio of investments. It is likely that there will be dynamic and synergistic interplay between all of MJNA and CANV related entities, including but not limited to, quality and standardizations processes, which can flow between the various entities, thus reducing R&D costs and accelerating products to market.

Conclusion

KannaLife has assembled what looks to be a very strong advisory board as well as a team of well regarded scientific professionals with strong pharmaceutical experience. Through South Park Ventures LLC, KannaLife has positioned itself to provide expertise in efficacy and standardization of product development.

In light of these positive developments, it wouldn’t be surprising if KannaLife proved to be the next breakout pharmaceutical company. You may want to adjust your portfolios accordingly.

Disclosure: I am an investor in MJNA and (OTC: CANV) and this article was written on behalf of Medical Marijuana, Inc.

Citations

Citation 1 – Website link: http://www.ott.nih.gov/about_nih/about.aspx

Citation 2 – Website link: http://www.kannalife.com/kannalife-sciences-inc-signs-research-and-development-agreements-with-advanced-neural-dynamics-and-iteramed-in-the-discovery-of-novel-neuroprotectants/

Citation 3 – Website link: http://www.kannalife.com/kannalife-sciences-inc-and-biotech-inc-enter-into-definitive-joint-venture-agreement/