The cannabis industry continues to be the hottest sector to invest in as Wall Street has become more favorable on investment opportunities within it.

One of the hottest areas in the cannabis industry has been the Canadian licensed medical cannabis producers which continues to see impressive growth as the number of registered patients has increased at double digit percentages on a month-over-month basis.

Emblem Enters Agreement to Disrupt a $60 Billion Market

We are favorable on the Canadian cannabis industry for many reasons but one of the main factors is that medical cannabis is legal at the Federal level. Unlike what we have in the United States, Canadian cannabis companies can use banks and access basic business services for companies to operate more efficiently and effectively.

Over the last quarter, we have noticed a trend in the emerging Canadian cannabis industry where licensed producers are significantly increasing their focus on the development of cannabis drug formulations and dose delivery systems for specific ailments and debilitating illnesses.

Yesterday, Emblem Corp (EMC.V) (EMMBF) announced a major milestone for its cannabis drug development initiative after the licensed medical cannabis producer announced a collaboration and licensing agreement with Toronto based Canntab Therapeutics.

Secures Strategic Canadian Cannabis Partnership

Canntab has developed a patent-pending oral sustained release formulation for cannabinoids and we are favorable on this agreement for several reasons.

One of the reasons why we are very excited by this agreement is because it will help Emblem capitalize on a trend toward smokeless products. The Canadian cannabis oil market is in its infancy, yet consumers are already showing a major preference for smokeless cannabis products.

Another reason why we find this agreement to be significant is because cannabis is legal in Canada, making the path to approval much easier. By next summer, Emblem expects to receive regulatory approval to conduct clinical trials and expects the product to hit the market before the end of the 2018.

A Long-Term Opportunity

We are very excited by the opportunity that Emblem and Canntab have and will keep an eye on how this story develops.

Under the agreement, the companies will collaborate on the pre-clinical formulation, clinical development, regulatory approval, manufacturing and commercialization of the sustained release product. The companies also intend to collaborate on a range of additional cannabinoid containing pharmaceutical formulations.

The agreement grants Emblem the exclusive right in Canada to Canntab’s patents and know-how for developing, commercializing, using, selling, and offering the sustained release product under the Emblem brand. The license does not grant the right to import or export the product.

The agreement calls for Emblem to make payments to Canntab upon achievement of certain milestones involving stability studies, bio-availability studies and regulatory approval of the sustained release product. The agreement also calls for Emblem to make royalty payments to Canntab based upon gross sales of the product.

A Major Opportunity for Market Disruption

We have always been favorable on Emblem’s differentiated opportunity and believe this will support the long-term outlook. We are favorable on the company’s focus on developing a product of this nature.

The sustained release product is designed to release the cannabinoid content over a period of at least 12 hours. Sustained release formulations of pharmaceutical products are particularly valuable in the treatment of chronic conditions where patients tend to need nonstop relief.

There is substantial evidence that cannabis is effective for the treatment of numerous conditions including neuropathic pain. Neuropathic pain is estimated to affect 2+ million Canadians (approx. $500 million market in 2016).

Led by an Elite Management Team

When it comes to analyzing cannabis companies, we always start the management team. This is an area where Emblem really stands out as the company is led by a management team with a proven track record of success.

Emblem Pharmaceuticals is a very attractive aspect of the business as it offers investors leverage to not only the legal cannabis market but also the cannabis pharmaceutical market.

Emblem Pharmaceuticals President John Stewart will lead this initiative and we believe he is very qualified to do so. Stewart has over 30 years experience developing and commercializing pharmaceutical products. He has launched 11 new products, including OxyContin, and was the worldwide President and CEO of Purdue Pharma, the largest privately held pharmaceutical company in the world.

A Company to Take Note of

We expect to Emblem see rapid growth on account of its unique three-pronged approach, dedicated to the production of premium quality cannabis, patient and physician education creating easy access, and a pharmaceutical approach that is second to none.

The shares are well off its 2017 highs and we believe this pullback has created a great opportunity for new investors. We expect to see a very favorable response from the market and will keep Emblem at the top of our radar.