Agreement to Commercialise Revolutionary Vaporiser Device
Perth, Mar 2, 2015 AEST (ABN Newswire) - Phytotech Medical Limited (
ASX:PYL), the Australian owned Medical Grade Cannabis (MGC) company today announces that it has entered into a Heads of Agreement (HOA) with Canigma A.L. Ltd, based in Israel, to develop a revolutionary capsule based vaporiser to administer medical cannabis.
Highlights:
- Heads of Agreement signed with Canigma A.L. Ltd to develop a revolutionary capsule based vaporiser device for administering medical grade cannabis (MGC).
- Agreement strategically positions Phytotech to develop and deliver leading MGC devices to the global market, worth more than US$1bn.
- The device, when commercialised, will provide significant health advantages to the patient and will deliver a higher dose of the active ingredient.
- Option to acquire 100% of Canigma following achievement of key milestones.
Canigma holds various intellectual property interests pertaining to a vaporiser delivery device for medical cannabis. Under the agreement, Phytotech will fund the development of this application with the purpose of commercialising the product. The funding provided by Phytotech will be applied towards the granting process of a patent for the device, the proof of concept and the development of the prototype.
In the event that Canigma is successfully granted a patent in respect of the device, Phytotech will subscribe for 50% of the issued fully paid shares in Canigma in consideration for investing up to US$1 million (less the funds expended by Phytotech prior to this date). These investment funds will be used to develop the device and move it towards full commercialisation. Thereafter, Phytotech has an option to acquire the remaining 50% of the shares in Canigma, with the valuation based on achieving a number of commercialisation milestones, structured over a four-year period.
The device to be developed is a capsule based vaporiser with a unique and innovative delivery method for administering MGC. The product is patent pending and will offer an all in one product, with ready to use cannabis capsules. The capsule provides minimal contact between the consumer and the raw material and will be focused on increasing the efficiency, above the industry standard, through conduction and convection heating technologies. The innovative delivery method will provide the patients a clean, measurable and constant experience.
The Canigma device capsule strategy is based on the "Nespresso" model. The intention being that dispensaries will stock different capsules to treat different indications and Doctors will then provide prescriptions to patients for a MGC capsule that has a defined ratio of THC and CBD. This will prevent abuse of the system and will also allow Doctors to monitor the use of MGC by patients more closely.
The key points of difference the Canigma device has to existing vaporisers on the market are:
1. It is smaller and easier to use than existing devices.
2. The vaporiser itself will include an innovative way of inhaling, suitable for the needs and habits of medical cannabis consumers.
3. It is clean and convenient—no handling medical cannabis leaves, bud or ash.
4. Delivers a higher dose of the active ingredient and is more efficient than the industry standard, thereby delivering significant health benefits.
5. Significantly lower levels of smoke and carcinogen vapour emission.
Phytotech will initially target the U.S medical cannabis market and intends to partner with cannabis growers to distribute globally, thereby reducing the risks of regulatory hurdles in various countries.
According to Researchers from The ArcView Group, a cannabis industry investment and research firm based in Oakland, California, the U.S. market for legal cannabis grew 74 percent in 2014 to US$2.7 billion, up from US$1.5 billion in 2013.
Boaz Wachtel, Managing Director of Phytotech Medical commented: "This agreement marks an important milestone in our business strategy. We're delighted to be partnering with Canigma on the development of this revolutionary product and through this important phase for our business. The use of cannabis capsules in a vaporiser is set to be the first product of its kind in the market and will bring substantial health benefits to the user. The team at Canigma bring the necessary skills and expertise required to successfully execute the development of this product and we look forward to working together to bring the vaporiser to market ."
The financial commitment for the Company in respect of this deal in the first 12 months is relatively small and will be financed from the additional funds taken under the IPO Prospectus. The Company remains fully funded and does not require any finance to execute the current business model.
About MMJ Group Holdings Ltd
MMJ Group Holdings Ltd (ASX:MMJ) is a global cannabis investment company. MMJ owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail. For MMJ's latest investor presentation and news, please visit: https://www.mmjphytotech.com.au/investors/
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