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A Cannabis Biotech Execution Story
In a move in furtherance of the company’s plan to develop products for testing and identifying cannabinoid isolates for targeted therapeutic purposes, Vinergy Resources (VIN.CN: CSE) (VNNYF: OTC) acquired a majority interest in a specialty development laboratory.
This morning, Vinergy announced that it signed a binding letter of intent to acquire 65% of Biolennia Laboratories. The lab operates out of a secure location in Toronto alongside Micrylium, which manufactures products under agencies like the Food and Drug Administration (FDA) and Health Canada (HC).
Under the terms of the agreement, once the agreement is signed Biolennia will receive $260,000 CAD and 150,000 shares of Vinergy. The acquisition is expected to close during the first quarter and this should serve as a catalyst to shares.
What Does Biolennia Laboratories Do?
Biolennia Laboratories currently provides testing, research and development and quality control services on behalf of Micrlylium. The lab specifically focuses on Health Canada approved disinfectants and consumer products.
Biolennia is applying for a Dealer’s License from Health Canada and the issuance of this license will be a significant achievement since the company would be allowed to process cannabis for research and development purposes. The lab will also provide a host of drug testing services to support MJ BioPharma.
Biolennia has a proven track record of success when it comes to testing products for agencies like the FDA and Health Canada. The lab’s expertise in validating and testing cannabis products consistent with the methods accepted by these agencies will add a lot of value to the team that Vinergy has in place.
An Agreement With More Upside
Concurrently with this announcement, Vinergy terminated its letter of intent announced on February 2 nd to acquire up to 51% of a European plant breeder. The target company of this terminated agreement had $14+ million in annual sales and adjusted EBITDA $2+ million last year.
Although this deal is off the table for now, we think it was a good decision as there are number of synergies between this deal and last week’s development. Last week, Vinergy reported a breakthrough in while working on its oral cannabinoid delivery strips and time-release capsule technology.
Management is very excited about this breakthrough as it could become the basis for new technology and possibly a new product category where water or saliva is the catalyst used to activate the carrier for delivery and absorption of CBD in to the body.
The technology is called BURST due to the speed at which it can enhance the body’s absorption of various ingredients. The BURST system is built on natural botanical polymers delivering specialty processed high purity cannabinoids.
The patent pending technology allows for a more complete palatable drug delivery system that is effective and enhances the patient or user experience and can intensify flavors. When comparing the potential of this product while working with a lab as compared to a plant breeder, we see more upside working with the lab.
Outlook is Bright
Although we were favorable on the agreement with the European plant breeder, this development is significant and fits in well with the company’s business strategy. There is currently a large short position on VIN.CN and the combination of this announcement with the short position should cause the shares to spike significantly higher.
Vinergy has done a great job executing over the last few months and we believe the company is well positioned to capitalize on these developments. Continued execution will create significant value for shareholders and this is a stock that we will continue to monitor.
We highlighted Vinergy in late 2016 as a stock poised to rally and investors should have this one on their watch list. We encourage you to become a Mushroomstocks Premium Member to learn more about this company and your opportunity!
Important Investor Disclosures
Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report
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