Emerging biopharmaceutical company Pivot Pharmaceuticals Inc. (CSE:PVOT) (OTCQB:PVOTF) announced on Wednesday the acquisition of privately-held Californian company ERS Holdings, LLC, via a binding letter of intent. ERS holds the patent for “RTIC” technology, which stands for Ready to Infuse Cannabis, as well as several other patents for processes to convert cannabis oil into powder to infuse it into various food and beverage products. Such products include capsules, K-Cups, liquid shots, protein shakes, lotions and bottled beverages.
Who Are Pivot Pharmaceuticals?
The company touts itself as a biopharmaceutical firm focused on finding commercial avenues for therapeutic pharmaceuticals and nutraceuticals through the use of drug delivery platform technologies. Central to their mission is research and development work that examines cannabinoid-based nutraceuticals and pharmaceuticals.
Like most companies of their stature, Pivot’s performs research through a wholly-owned subsidiary; theirs being a medical cannabis products division called Pivot Green Stream Health Solutions Inc. To-date, the division’s most significant accomplishments include acquiring the rights to delivery systems and for commercialization of specific cannabinoid, cannabidiol, and tetrahydrocannabinol (THC)-based products. Those products include the topical BiPhasix Transdermal Drug Delivery platform technology, the oral Solmic Solubilisation technology, and the transdermal Thrudermic Transdermal Nanotechnology.
The Deal With ERS
According to a statement, Pivot will acquire the whole of ERS, including their Patent Portfolio and Trademarks for “Instant THC” and “Instant CBD” in exchange for $1 million in cash and 5 million shares of Pivot stock. Included in the terms of the agreement is a stipulation for a six-month restriction on the company shares, with the first 25 percent to be released after that period. Additional shares will be issued gradually, at a rate of 25 percent every six months.
“We are delighted that Ross Franklin and Pat Rolfes from ERS have chosen Pivot to help transform their patents and processes into therapeutic consumer goods,” remarked company CEO Dr. Patrick Frankham. “Pivot is in ongoing discussions with several Canadian Licensed Producers and Licensed Dealers in order to accelerate commercialization of our large pipeline of technology-driven products.”
The New Technology
Pivot, like most companies in the cannabis industry today, is eagerly anticipating Canada’s up-and-coming open adult-use recreational market, set to begin in July 2018. In attempting to carve out their niche, Pivot notes that current consumer choices are limited to, in the company’s words, “poorly absorbed topicals and orals or inhaled and smoked carcinogens.” Adults looking for healthier options when it comes to consuming cannabis represent a vast untapped market – at least that is what the people at Pivot are banking on. While edibles are available, they usually come in the form of high-sugar and high fat confectionaries, which again leaves the health sector with an open opportunity.
“After being courted by some of Canada’s largest cannabis companies, we selected the Pivot team to help monetize our patent,” observed Franklin of the deal. “Their management team has extensive pharmaceutical and nutraceutical industry experience and an impressive track record of bringing products to market. In addition to the food and beverage markets, we also look forward to integrating ‘RTIC’ into Pivot’s current topical, oral and nanoparticulate pipeline.”
Looking To The Future
Lower estimates have Canada’s legal marijuana market somewhere at $5 billion per year, while higher estimates reach up into the $9 billion range. Either way, Pivot is banking on an untapped section of the market – the health-conscious cannabis user. While those numbers only factor in people who are “likely to consume” marijuana in the new year, Pivot is well placed to attract new users, those who may be afraid to smoke or ingest cannabis traditionally.
“Pivot believes that the anticipated changes in cannabis regulation in Canada and California will provide an opportunity to launch multiple products into the healthcare and recreational markets in 2018,” Dr. Frankham continued before commenting on the company’s determination to compete in the new year. “If a suitable joint venture partner is not identified by January 2018, Pivot will seek a Licensed Dealer designation from Health Canada and commence construction of its own production facility. As a result, Pivot has engaged CBRE, the world’s largest commercial real estate firm, to help facilitate the site selection process.”
credit:420intel.com