PharmaDrug Inc (CSE:BUZZ) (OTC:LMLLF) encompasses almost all the facets of the evolving medical cannabis and psychedelics industry.
In one package you have a business that is involved in THC, CBD and psilocybin, and which recently expanded into the sphere of biotechnology with a reboot of a naturally-occurring, potent medicine that has shown early promise in cancer.
Not just that, the Canada-listed business has planted flags in Germany and the Netherlands, has supply chain expertise and a nascent retail strategy too.
PharmaDrug is the brainchild of Daniel Cohen, who speaks and thinks at a mile a second, barely pausing for breath as he takes me on a whistle-stop tour of the business.
Germany is the foundation stone
While the acquisition of Toronto-based Sairiyo Therapeutics is the latest evolution of his strategy, the business has its roots in Germany, Europe’s most advanced market for medical cannabis.
Here PharmaDrug holds a license that allows it to import and export schedule-one narcotics. It also has good manufacturing practice (GMP) accreditation.
Both are integral to its plans in Germany, allowing it to stock and sell THC products from Bedrocan, one of the world’s largest growers and suppliers.
While demand hasn’t been a problem for PharmaDrug, sourcing adequate supply to satisfy that demand has. So, it is also teaming up with a Canada-based multinational company to source further supplies of EU-GMP certified medical cannabis.
“We will be having access to this new product sometime in February,” says Cohen. “So, at that point, we'll be selling both the new product and Bedrocan product.”
Cementing its position in Germany, the company is working with Canada’s Eve & Co to find a plant strain it can white label. After that, PharmaDrug will move into cannabis extracts and CBD.
“The aim this year is to have a flower under our own name and our own extract,” says Cohen. “We are going to have Bedrocan and the new product and we are in discussions with Canopy Growth, which has a high-THC product. So, we are going to be a one-stop-shop in Germany.”
The Netherlands adds a second growth prong
Before we get to the Sairiyo deal, it is worth also looking at the Netherlands, which is the second of PharmaDrug's three growth prongs.
Amsterdam is known as Europe’s party city; however, Cohen’s vision is a world away from this hedonism of the coffee shops and smartshops (the former host recreational cannabis users, the latter sell psychedelics).
PharmaDrug wants to create a chain of trusted stores that follow the ethos of some of America’s best dispensaries that aim to advise and support clients.
“We want to take smartshops away from drug tourism and gear them towards going after the educated professional who wants to use psychedelics for increased cognitive performance, PTSD or micro-dosing,” says Cohen. “It’s a different approach; it’s a different perspective.”
The company has bought a store, but future expansion is likely to be done on a ‘greenfield’ basis.
The plan is to acquire a license and build a superstore in the Dutch capital under its newly developed brand, Slim Winkle, which means ‘smart store’ in the native tongue.
With coronavirus restrictions still in place, the brand is being built online initially, says Cohen, who is itching for normal service to resume.
Moving into biotech
On to Sairiyo then, which it acquired in return for 75 million PharmaDrug shares, and would look like a departure for the company.
However, it makes perfect sense when you see where the industry is headed – towards the medicinal use of psychedelics that undergo rigorous clinical trials.
While Sairiyo’s lead drug is cepharanthine, a naturally occurring compound that has been used for hair loss and snake bites, Cohen plans to expand its newly-acquired biotechnology franchise.
“We're already working on something on the psychedelic side that we hope to be able to launch soon and talk about,” he says.
In the meantime, cepharanthine, which has been around 70 years, offers a world of new opportunities.
A drug with great promise
It has been repurposed to seriously enhance its bio-availability (the rate at which the treatment gets to the parts of the body where it is required) and it is being developed to treat cancer.
It carries US Food & Drug Administration (FDA) orphan drug designation for its indications in oesophageal cancer.
This is a significant tick in the box as it affords extended protection for any successful new drug as well as tax breaks and a possible diversion along the regulatory fast-track.
With C$3mln in the bank and C$1mln-worth of ‘in-the-money’ warrants, the company is well funded for its immediate needs.
And, as we have seen, there are plenty of potential milestones and inflexion points to come – so watch this space.
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