FSD Pharma Canntab Partnership Has HUGE Upside

Published:

In this market news, FSD Pharma (CSE:HUGE), one of the Canadian marijuana stocks, said it has signed a profit-sharing agreement with Canntab Therapeutics Limited (CSE:PILL)

SmallCapPower | September 19, 2018: FSD Pharma (CSE:HUGE), a licensed producer of cannabis, Tuesday announced that it has signed a definitive collaboration and profit-sharing agreement with Canntab Therapeutics Limited (CSE:PILL), a company focused on cannabis oral dosage formulations. The deal is a major positive for both companies as cannabis-based tablets offer a significant opportunity since doctors hesitate to prescribe smoked cannabis as a solution to patients’ health concerns. Following the announcement, shares of Canadian cannabis stocks FSD Pharma and Canntab rose 7% and 22%, respectively.

For Our Complete Coverage Of Canadian Marijuana Stocks Click Here    

Watch: Cannex Capital Holdings (CSE:CNNX) Wants to Emerge as a Multi-State U.S. Player, Says CEO 

As per the agreement, FSD Pharma will provide Canntab with space at its Cobourg facility, where Canntab will install, at its own expense, a GMP facility to produce a suite of novel cannabis oral dose delivery platforms, including gel capsules and tablets, and other types of cannabis-based products, including sleep aids and pain relievers. FSD Pharma will also assist Canntab to obtain a license to process and sell cannabis products.

Win Big With Our Small Cap Picks

 

In return, Canntab will grant certain royalty and profit-sharing rights. Canntab provides FSD with 50% of the profits from retail sales of Canntab Products through channels established by FSD Pharma, while FSD will be entitled to retain 50% of the profits on FSD Pharma’s sales of the Canntab products. Additionally, a royalty of 3.5% of Canntab’s sale price for all products manufactured and sold at Canntab premises will be paid by Canntab to FSD Pharma.

FSD Pharma currently trades at a market cap of $954 million on the CSE with a price-to-book multiple of 18.0x.

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

To read our full disclosure, please click on the button below:

Related articles

Recent articles