Firm sees a future in pot pills

Canntab seeks approval for new tablets

Later this week a familiar story will play out when a private medical marijuana company, Canntab Therapeutics Limited, merges with a shell, Telferscot Resources Inc., and starts trading on the Canadian Securities Exchange, thereby providing investors with yet another way to play the marijuana industry.

But this transaction is different in a couple of ways: first it will bring to an end the seven-year hunt by Telferscot — which went public in 2011 as a mineral exploration company — to find either a permanent partner or a permanent business.

Along the way Telferscot sold its major business, did a return of capital to its shareholders, announced a plan (later scrapped) to acquire silver gold assets in Mexico, raised equity at $0.01 a share, before inking a deal with Canntab last November that was approved by its shareholders last month.

More importantly, Canntab, whose motto is putting the medical into medicinal cannabis, is a different sort of medical marijuana related company. Its business is producing tablets, which would give medical marijuana users a different way of ingesting cannabis. (Hence the stock symbol: PILL.)

“We are the first in Canada, and possibly in the rest of the world” said Richard Goldstein, company’s chief financial officer, who formed Canntab with chief executive Jeff Renwick in the middle of 2016.

Canntab, which raised $5 million (at $4 a share, and $1 on a post-merger basis) as part of the transaction with Telferscot, hasn’t received regulatory approval for its tablets, which it says come in two forms — instant release and extended release — and in a variety of doses.

Canntab licensed the technology from a predecessor company for cash and shares. That company had spent about $2 million in developing two extended release tablets, one of which has received a patent.

So why work on a tablet rather than a product that can be inhaled?

Renwick argues a tablet provides many advantages: it’s of consistent quality; it’s discrete, it’s easy to digest; and it’s useful to patients who have trouble smoking. And marijuana-infused tablets are more effective than swallowing gummy bears containing marijuana. The plan is to sell the tablets in a blister pack.

Renwick, a former hockey player who was good enough to play in Germany, has had a long history in and around the pharmaceutical industry, and most recently was chief executive of Orbus Pharma. Two years back along with Goldstein he formed Canntab. Prior to that, the two worked in the generic pharmaceutical business.

Canntab has filed seven patents for its two products. It has also entered into agreements with Emblem Cannabis Corp., which has a licensed producer’s licence.

So what are the plans? According to the 390-page document prepared for the meeting of Telferscot shareholders, the next eight months will initially be given over to making exhibit batches for third-party clinical studies in Canada. Those will start shortly.

“There is no certainty that Health Canada will approve the tablets. In a worse case scenario we will be forced to market ourselves as an edible. But we think tablets are a natural progression,” said Goldstein. “We are not making any claims that the tablet will treat any specific illness.”

Other plans include expansion into certain U.S. states where it will be seeking a manufacturing and distributors licence, and to the start of an international expansion. As part of that rollout, Canntab has developed a seven-stage commercialization process that will cost more than $1 million.