How Cannabis Extraction Patents will Prove Potent as the Industry Attracts Key Players

Article by BNN Bloomberg

3h ago How cannabis extraction patents will prove potent as the industry attracts key players Market One Media MARKET ONE - Nextleaf offers an asset light, IP heavy approach for discerning investors to become in Nextleaf offers an asset light, IP heavy approach for discerning investors to become involved in a scalable, highly specialized, and focused company. , Image courtesy of Market One Media The over-supply of biomass approaching shelf-life and the lack of efficient processing solutions have created high demand for third-party cannabis extractors Nextleaf’s asset light and IP heavy approach, featuring an extensive patent portfolio, is creating true differentiation and is providing a first-mover advantage as big alcohol, tobacco, and pharma pour billions into the industry By closing two extraction contracts and a supply agreement for distillate, the company is delivering on ramping its operations and commercializing its technology Canada’s most innovative extraction Based on the specifications of the desired finished product, Nextleaf creates an extract suitable for formulation into a variety of products.

Canada’s most innovative extraction company, Nextleaf Solutions (CSE: OILS | OTCQB: OILFF | FSE: L0MA) is developing technology for distilling THC and CBD oils used to formulate popular 2.0 products including vape pens, edibles and beverages.

The company has a patent portfolio of over 40 issued patents and 60 pending patents protecting what industry experts believe could be the most efficient methods of transforming dried cannabis and hemp biomass into high-purity distilled oils at scale within a highly regulated environment.

“As a company we’re focused on developing the most innovative and efficient methods of producing highly refined oils and commercializing through toll processing and supplying bulk THC and CBD distillate to companies looking for cannabinoids ready for infusion in finished products.” — Paul Pedersen, CEO, Nextleaf Solutions Ltd.

This compares to Nextleaf’s primary extraction competitors who, as reported as of May 8th, had two pending patent applications, and zero issued patents across the three companies. To Nextleaf’s knowledge, Canopy Growth is one of the only major industry players that has amassed a substantial portfolio of patents (~130 as of February 2020).

Pure play cannabis extractors in focus; Nextleaf has capacity and a war chest of technology

It is no secret that the Canadian cannabis industry has an oversupply of dried cannabis. As of April 2020, over 620,000 kg of dried cannabis, reaching shelf life, was sitting in inventories across Canada.

Despite Cannabis 2.0, which expanded the assortment of concentrate product capable of being sold to consumers and attracted interest from big pharma, tobacco, and alcohol, increases in production driven by growth in outdoor cultivation (21 million sq. ft. licensed after only one year), lagging processing capacities and capabilities, and slow-to-market concentrate product penetration, have all contributed to the oversupply of biomass.

Though continued increases in demand will eventually help correct the imbalance, it is the ability to efficiently produce larger amounts of concentrate that could solve the problem immediately.

The concentrate from these products is either produced in-house or by third-party processing companies. Third-party, pure play extractors are more likely to solve the problems of the industry by scaling solutions and developing technologies more quickly, ultimately finding ways to transform unsellable biomass into a more profitable and prolonged product.

Nextleaf is entering the market with 600 kg daily of processing capacity, which it expects to run efficiently and at scale, and a war chest of proprietary technology. Among its competitors, Nextleaf Solutions has positioned itself as the leader in the development of issued patents and intellectual property.

By closing two extraction contracts and launching their Commercial Partners Program as a solution for Canadian cannabis farmers requiring economical process services, Nextleaf is delivering on ramping its operations and commercializing their technology.

“As a company we’re focused on developing the most innovative and efficient methods of producing highly refined oils and commercializing through toll processing and supplying bulk THC and CBD distillate to companies looking for cannabinoids ready for infusion in finished products,” says Paul Pedersen, CEO of Nextleaf.

“But we really believe building and monetizing our patent portfolio is how we create a billion-dollar business.”

Rooted in innovation and technology, patent development is driving Nextleaf’s early success

In an environment where Life Science patent applications have a pending to issuance success rate of less than 50 per cent, Nextleaf’s 100 per cent success rate in turning pending patents into issued patents is significant and unparalleled, but not unintended.

Further re-enforcing Nextleaf’s IP strategy and focus is the current cannabis patent landscape. Right now, seven of Canada’s top ten cannabis-patent holders are multinational pharmaceutical companies, including Ciba-Geigy, Pfizer and Merck.

Big pharma will continue to enter the cannabis industry in a big way with eyes set on IP surrounding repeatable processes and formulations. Until the U.S and other jurisdictions follow Canada’s lead and legalize cannabis on a federal level, Nextleaf is poised to capitalize on their head start in the landgrab to secure patents around the efficient, industrial scale processes these companies will seek.

“Major alcohol and tobacco companies have made significant investments into Canada’s federal legal cannabis industry, and we expect to see pharmaceutical companies continue to aggressively secure patents involving CBD and THC,” notes Pedersen.

“Nextleaf’s intellectual property portfolio could make it an attractive business partner, or target of a takeover.”

The current market opportunity for cannabis extractors is unprecedented

As the industry evolves and cannabis continues to commoditize, true scalability and efficiency, along with who can provide the highest quality product for the lowest cost, will remain essential. Nextleaf is playing a leading role in revolutionizing extraction and purification throughput, yield, and purity to enhance cannabis oil economics across the globe.

urrent extraction methods for most oils is through off the shelf, small-scale Co2 extraction equipment. The problem for those that rely on this approach, however, is twofold: The inability to efficiently scale production, leading to significantly higher cost of oils; and undesirable flavor and smells from the chlorophyll, fats, and waxes due to lack of further refinement steps.

Setting Nextleaf apart is their proprietary cryo-ethanol system that is 8-10 times as efficient as most traditional Co2 extractors. The company’s patented technology and economies of scale enable the production of a truly premium extract at a fraction of the cost of other extractors, making the company an attractive partner for consumer brands looking to select a third-party processor for cannabis oils.

Read the full article here.

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