After about two years of building relationships with exceptional partners and positioning itself in Canada and Europe, XPhyto Therapeutics (CSE: XPHY) was ready to become a public company. That happened Tuesday morning, with trading beginning on the Canadian Securities Exchange, checking off one more box on management’s list of accomplishments.

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The company was founded in 2017 to pursue the next wave of business opportunities in cannabis, such as medical applications, proprietary formulas and emerging European markets. More precisely, XPhyto, through its wholly-owned subsidiaries, is developing a testing, manufacturing, and research business in Canada, as well as a cultivation, import, manufacturing, and distribution business in Germany.

To that end, the parent company has several subsidiaries, including XPhyto Labs in Canada and Bunker Pflanzenextrakte GmbH in Germany.

Jump Start on Canadian Expertise 

Thanks in large part to XPHY Director Dr. Raimar Löbenberg, XPhyto has two, separate 5-year agreements with the University of Alberta’s Faculty of Pharmacy and Pharmaceutical Sciences. Dr. Löbenberg founded the Drug Development and Innovative Centre at the university and is now sharing his wealth of experience and impressive resources with XPhyto. In exchange for all he provided, Dr. Löbenberg is now one of XPHY’s largest shareholders.

XPhyto is immediately in a position to be a leading player in cannabis science in Canada, owing to UofA already being considered an authority. Management made a savvy decision to go the collaborative route in Canada to jump start operations, which saved tens of millions of dollars in capex to build the type of facilities at its disposal now, without mentioning the scientists and staff at UofA.

Per the one agreement, the Faculty of Pharmacy and Pharmaceutical Sciences will manufacture cannabis-based extracts and isolates in its ISO certified clean room for XPhyto for the purposes of research and clinical trials.

According to the other agreement, the university and XPhyto will work together to co-develop a commercial grade analytical lab at UoA for the purpose of testing cannabis and other plant-based medicines. XPhyto has fully funded the development and construction of the analytical testing facility.

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First Mover in Germany

Late in July, XPhyto’s Bunker announced that it received a licence for cannabis cultivation and extraction for scientific purposes in Germany, one of the first licenses of its type in the country.

Bunker’s name is quite appropriate given that it has a long-term lease on a former avionics station and nuclear bunker in Bavaria, previously used by the German Bundeswehr Tornado fighter bomber squadron. The nearly 11,000 square-foot facility (with room to expand) is located nearby Munich West airport.

The bunker was built to withstand a nuclear disaster, including radiation-proof doors, thick concrete double walls, back-up power, air filtration and a dedicated internal water well. To that end, some of the infrastructure is already in place for a cannabis business and the building certainly is secure.

XPhyto will need to put about $900,000 into a first phase of renovations to the Bunker facility in order to further additional cannabis licenses and opportunities for storage, import/export, manufacturing and other planned operations catering to the European markets.

Big Market Opportunities

XPhyto is a startup that is moving quickly and with focus as it sees opportunities in its home country in cannabis science rather than fighting for share in the congested cultivation space. Arcview Market Research and partner BDS Analytics estimate that the Canadian cannabis market will reach $5.2 billion within five years.

In Germany, the market is still young, but it is one of the fastest growing in the world on a year-over-year basis.  Arcview forecasts Germany’s cannabis market to grow at 77% compounding annual clip to reach $1.6 billion in the next three years. The market is the flattest of playing fields right now with the German health authority holding its first tender process for cultivation licenses late last year.

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Disclaimer

CannabisFN.com is not an independent financial investment advisor or broker-dealer. You should always consult with your own independent legal, tax, and/or investment professionals before making any investment decisions. The information provided on https://www.cannabisfn.com (the ‘Site’) is either original financial news or paid advertisements drafted by our in-house team or provided by an affiliate. CannabisFN.com, a financial news media and marketing firm enters into media buys or service agreements with the companies that are the subject of the articles posted on the Site or other editorials for advertising such companies. We are not an independent news media provider. We make no warranty or representation about the information including its completeness, accuracy, truthfulness or reliability and we disclaim, expressly and implicitly, all warranties of any kind, including whether the Information is complete, accurate, truthful, or reliable. As such, your use of the information is at your own risk. Nor do we undertake any obligation to update the items posted. CannabisFN.com received compensation for producing and presenting high quality and sophisticated content on CannabisFN.com along with financial and corporate news.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Only days after announcing that its wholly owned subsidiary was awarded a German cannabis and cultivation and extraction licence, XPhyto Therapeutics is ready to enter the public domain. With a final prospectus filed with the British Columbia Securities Commission, XPhyto is ready to go public on the CSE under the ticker “XPHY”. The company will begin trading on the CSE on Tuesday, August 6, 2019.

Dual Market Focus: Germany

From its corporate headquarters in Vancouver, XPhyto is developing its business as a leader in formulation, processing, and clinical validation in two of the world’s most active markets, Canada and Germany. Germany, the largest economy in the European Union and second largest federally regulated medical cannabis market in the world (behind the U.S.), is seeing tremendous acceleration in cannabis demand, including importing nearly 2,500 kilograms for medical purposes in the first half of 2019. That’s almost as much as was imported in all of 2018 and more than twice as much as 2017.

Germany Flag on cannabis background. Drug policy. Legalization of marijuana

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Right now, Germany relies 100% on imports to supply is burgeoning medical cannabis market. Based upon some recently issued licenses, it will be until at least late in 2020 before any domestic cannabis will be available for medical purposes.

It is this growth that underscores Arcview Market Research forecasting Germany’s cannabis market to experience a whopping 76.8% compound annual growth rate to reach $1.6 billion by 2022.

Last Wednesday, the Company announced that its wholly owned German subsidiary, Bunker Pflanzenextrakte GmbH, was awarded a cannabis cultivation and extraction licence for scientific purposes from the German Federal Institute for Drugs and Medical Devices, better known as BfArM. Bunker still has to pass BfArM’s security requirements, which isn’t expected to be an issue considering the company operates from a monitored high-security area in Bavaria that previously served as a German air force command center and nuclear bunker.

Bunker has a long-term lease for the entire facility with 10,741 square feet for the initial buildout and nearby space available for expansion.

The new licence authorizes Bunker to cultivate and extract up to 70 different strains of cannabis sativa and indica for scientific R&D.

With the new licence in tow, Bunker is next applying for licenses that will allow for cannabis import, storage, distribution and manufacturing. The license estate is at the heart of Bunker’s plans to serve as a one-stop shop providing a bevy of products and services spanning genetic research and storage, cultivation, extraction, storage, processing, packaging, distribution and more.

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Dual Market Focus: Canada

Canada made history last year when it became the first G7 country to legalize adult-use marijuana. Supply shortages and regulatory challenges kept the industry from getting off to the rip-roaring start analysts expected, but that hasn’t stopped Arcview Market Research and partner BDS Analytics from forecasting the Canadian cannabis market reaching $5.2 billion by 2024.

XPhyto’s operations in Canada are centered on in-house production of pharmaceutical-grade cannabis-derived compounds, developing proprietary formulas and conducting modern clinical research for diseases and conditions with unmet medical need where cannabis could be a viable option. They also offer third-party commercial analytical testing for licensed producers, wholesalers, distributors and law enforcement.

Management is advancing these operations through strategic collaborations that accelerate the process with other collateral benefits. For instance, XPhyto has two five-year agreements with the University of Alberta’s Faculty of Pharmacy and Pharmaceutical Sciences. This partnership provides XPhyto with certified analytical testing capability, as well as a certified extraction, isolation, and formulation facility.

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This is a tremendous capital saver for XPhyto as its cost to entry pales in comparison to the value of the world-class infrastructure, not to mention potential maintenance costs in the future. Furthermore, The University of Alberta is well known for its expertise in biopharmaceutics, drug delivery quality control and regulatory sciences.  An authority like that as a strategic partner gives XPhyto immediate brand recognition as a high quality service provider and access to talent that other companies simply do not easily come by.

Public Soon

XPhyto is hitting the ground running when it comes public as it looks to fill a void between cannabis and modern medical science. They have secured a collaborative partner in the esteemed experts at the University of Alberta to capitalize on the opportunity with minimal capex while the Bunker acquisition – along with its assets – give XPhyto a first mover advantage in the burgeoning German market.

XPhyto will commence trading on the CSE on Tuesday, August 6, 2019, which should have investors keen to participate in the next wave of cannabis opportunities – medical formulations and emerging European markets.

Click here to receive an investor deck and going public alert

Disclaimer

CannabisFN.com is not an independent financial investment advisor or broker-dealer. You should always consult with your own independent legal, tax, and/or investment professionals before making any investment decisions. The information provided on https://www.cannabisfn.com (the ‘Site’) is either original financial news or paid advertisements drafted by our in-house team or provided by an affiliate. CannabisFN.com, a financial news media and marketing firm enters into media buys or service agreements with the companies that are the subject of the articles posted on the Site or other editorials for advertising such companies. We are not an independent news media provider. We make no warranty or representation about the information including its completeness, accuracy, truthfulness or reliability and we disclaim, expressly and implicitly, all warranties of any kind, including whether the Information is complete, accurate, truthful, or reliable. As such, your use of the information is at your own risk. Nor do we undertake any obligation to update the items posted. CannabisFN.com received compensation for producing and presenting high quality and sophisticated content on CannabisFN.com along with financial and corporate news.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.