Canntab Therapeutics Limited (CSE:PILL) (OTCMKTS:CTABF) announced Tuesday that it is teaming up with World Class Extractions (CSE:PUMP) to process cannabis derivatives from its Markham, Ontario facility.
The two companies are establishing a joint venture that will see World Class Extractions (WCE) install its cannabis extraction and processing systems for Canntab to manufacture medical cannabis in pill form.
Shares of Canntab soared on Tuesday morning, up 24% at C$0.57 in Canada.
READ: Canntab's plans boosted by initial indication of patentability for its immediate release CBD formulation
Toronto-based Canntab will start production once it receives its license from Health Canada, which is expected shortly.
WCE’s systems include turnkey components from its portfolio of machines, such as the BOSS next-generation CO2 cannabis extraction system.
Canntab CEO Jeff Renwick told investors in a Tuesday statement that the agreement is driven in part by the constrained supply and unsustainable pricing within the extraction marketplace.
"Having the BOSS and World-Class' expertise will give Canntab the ability to control its own destiny by securing an ongoing supply for its manufacturing operations, where required,” Renwick said.
Multiple separation technologies including chromatography will also allow Canntab to separate the various cannabinoids and terpenoids, in order to diversify and expand its portfolio of cannabis-based solid oral dosage forms, according to Renwick.
“With these elements, such as CBN and CBG, Canntab will be able to do further research into promising formulations that may approach a range of medical conditions.”
Under the terms of the agreement, Canntab and WCE will each hold 50% interest in the joint venture. The equipment will have an initial extraction and processing capacity of up to 225 kilograms of biomass per day, which could result in around 18 kilograms of CBD oil. The oil could then be used to create about 1.8 million 10mg tablets.
The extraction and processing systems will remain the property of WCE until all costs are recovered, at which point the equipment will become the property of the joint venture.
WCE CEO Rosy Mondin said that the extraction company looks forward to supporting Canntab's growth as a global leader of research and production of hard-pill oral dosage therapeutic cannabis product forms.
“Our WCE team has spent the last half-decade concentrating on R&D to bring leading technology and solutions to cannabis and hemp oil extraction,” Mondin said in a statement.
Canntab will continue to contract with third-party suppliers such as Heritage Cannabis Corp (CSE:CANN) - an agreement was signed in May 2019. The systems received from WCE will augment Canntab’s own capacity.
--Updated with share price--
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