Business Strategy

Business Strategy2019-04-01T18:37:21+00:00

STRATEGIC FOCUS

During Health Canada’s consultations relating to the cannabis industry and related legislation, they heard many compelling personal stories of how cannabis is making a difference to Canadians living with serious health challenges such as cancer, HIV/AIDS, multiple sclerosis, arthritis and fibromyalgia. They also heard about the role that cannabis can play in pain management and palliative care, and the relief that cannabis, particularly strains with high levels of CBD and low levels of THC, offers to children with severe forms of epilepsy and how cannabis has enabled patients to limit or eliminate their use of powerful narcotic drugs such as opioids.

Because cannabis and formulations derived from it can make a difference to people living with a host of ailments, including mental health issues, cancer, pain, nausea, glaucoma, multiple sclerosis, osteoarthritis, and more, and it has enabled patients to limit or eliminate their use of powerful narcotic drugs such as opioids, our research is focused on the development of our novel pharmacotherapies for mental health, and the mitigation of the spread of cancerous tumors.

Through our sponsored research programs, we are working with teams at two leading Canadian universities on its unique cannabis formulations. It will use the research results to develop products that facilitate safer use of medical cannabis, especially medications with higher concentrations of THC by reducing or even eliminating the negative side effects of THC.

We also recently announced a partnership with the Jamaican Medical Cannabis Corporation (JMCC), a Canadian-based company with operations in Jamaica. Under their agreement, JMCC will cultivate the premium, medical-grade cannabis for our novel products, as well as manage the processing, product formulation, packaging warehousing and distribution of those products around the world.

Our strategy includes the continuous development of our Master Intellectual Property Platform of patented product formulations. We are also in the process of obtaining a purchase/sale, import/export license for cannabis and cannabis products as permitted under the Health Canada Cannabis Act. Positive data from our research and pre-clinical trials has demonstrated that our strategy is achieving meaningful results.

We expect our formulations involving both THC and botanical oil extracts will treat mental health ailments, and that the advent of our formulations will significantly distinguish our approach from other Licensed Producers who may not have, as we do, strong relationships with the University research community.

We believe our formulations may have significant potential applications in the treatment of anxiety, addiction, depression, schizophrenia, and post-traumatic stress disorder “PTSD” and will form a strong foundation to continue to seek other applications through our Sponsored Research Programs. Accordingly, we believe we have developed a strategy to maximize opportunities in an evolving industry that has international scope and opportunity, with Canadian talent through its universities providing a mechanism to make a significant difference in the lives of medical cannabis users.

THC as a Replacement for Opioids

According to Laviolette: “Since the primary addictive effects of opioids are believed to be due to causing a long-term ‘switching on’ of overactive dopamine, our formula would be predicted to be superior to THC alone (which does cause overactive DA similar to opioids), in that our formula prevents this side effect of THC.”

To view an article recently published by Health Europa, visit the following link: CanaQuest and Partners Passionate about Impacting Lives on a Global Scale.

Intellectual Property Protection

The Company is undertaking development & commercialization of cannabinoid therapeutic products from strains of cannabis to treat a variety of clinical indications. Through its relationship with Universities, the Company is collaborating to formulate proprietary solutions which significantly impact the effectiveness of cannabis compounds. Two provisional patents have been filed on CQ1. In addition, we are looking to:
• Combine the benefits of cannabis and other botanicals;
• Enhance a highly effective suite of medicinal patented products; and
• Utilize formulations which increase absorption capacity.

Competitive Advantage

Working with Dr. Steve Laviolette (scientific veteran with over 13 years of experience in the field of mental health and cannabis) as an industry partner gives us a tremendous competitive advantage compared to publicly disclosed research in this area. We have completed pre-clinical trials with very promising results that need to be verified by human trials.

During clinical trials, we have shown progress in several key areas including:

• The positive and negative effects of THC and CBD on mental health;
• Closely monitored results provide positive, measurable feedback, including on anxiety, addiction, depression, schizophrenia and PTSD as a function of cannabis implementation;
• Selected botanical extracts in combination with CBD and THC are showing predictable positive impact on psychotic behavior, minimizing the euphoric and other related negative side effects.

Next Steps:

We are ready to proceed with our Human Anxiety Feasibility Studies via 3-month trials.

• Sign agreements with Licensed Producers/Distributors to sell medicinal cannabis domestically and Internationally;
• Schedule cannabis deliveries from JMCC (signed Supply Agreement) for supply of high-volume dry medicinal cannabis to Licensed Producers/Distributors;
• Initiate human trial feasibility studies to further support our research and animal clinical trial results;
• Secure license from Health Canada for Purchase/Sale, Import/Export under the Cannabis Act (non-possession);
• Formalize agreement with Licensed Processor to package and distribute formulations through its GMP facility;
• Secure funding and intends to file an application to list on the Canadian Securities Exchange (CSE) – dual listing;
• Build brand awareness for sales and export – scientifically supported;
• Support our partner universities with on-going product development backed by scientific data;
• File additional Provisional Patent Product Applications

Medical Cannabis – History and Benefits

Medical cannabis refers to the use of cannabis and its constituent cannabinoids to treat disease or improve symptoms of conditions such as pain, muscle spasticity, nausea, as well as other indications. Cannabinoids is a blanket term covering a family of complex chemicals, both natural and man-made, that binds with cannabinoid receptors (protein molecules on the surface of cells) and affects a wide number of responses.

Cannabinoid receptors in the human body are part of a system called the endocannabinoid system. This system produces chemicals called endocannabinoids, which also bind with cannabinoid receptors. Cannabinoid receptors are found in the brain and throughout the body. Scientists have found that cannabinoid receptors in the endocannabinoid system are involved in a vast array of functions in our bodies, including helping to modulate brain and nerve activity (including memory and pain), energy metabolism, heart function, the immune system and even reproduction.

While there are many active cannabinoids found in cannabis, the two most commonly used, currently, for medical purposes are THC and CBD (cannabidiol).

CanaQuest’s proposed cannabis formulations and related nutraceutical products will generally utilize:

• Multiple combinations of plant strains to target medical ailments at the neurological level
• The use of cannabis extracted and concentrated cannabinoid oils which are known to provide targeted benefits together with botanical oils and Algae-omega3 essential fatty acids (DHA and EPA)
• Cannabis extracted and separated terpenes (aroma, additional medicinal benefits)
• Cannabis ‘whole plant’ oil – with natural concentrations of THC or CBD.

From research done in the field it has been concluded that THC acts on two types of cannabinoid receptors: CB1 and CB2. CB1 receptors are mainly found in the brain, peripheral nerves and nervous system, whereas CB2 are found both in the neurons and immune cells. Evidence suggests that THC helps alleviate symptoms suffered both by AIDS patients and by cancer patients undergoing chemotherapy, by increasing appetite and decreasing nausea. The other main ingredient is CBD, a non-psychoactive component of cannabis which accounts for more than 50% of the known therapeutic applications. A range of clinical studies indicate that CBD appears to relieve convulsion, inflammation, anxiety, nausea and short-term memory loss.

While THC has a strong binding affinity for both CB1 and CB2 receptors, CBD has no particular binding affinity. Instead, many of the therapeutic benefits of CBD are created through indirect actions. These actions include activating TRPV1 receptors. These receptors are involved in regulating pain, body temperature and inflammation. Based on their consultations with Dr Laviolettee, of Western University, Paul Ramsay, CanaQuest President, and Richard Rusiniak, CanaQuest CEO, believe that these properties of THC may make it more desirable than CBD alone as it directly and more effectively treats several of these ailments, while CBD only has an indirect effect. This is because THC is similar to endocannabinoids that have a similar structure to naturally occurring endocannaboids which are also naturally released by neurons in the human body to regulate the release of neurotransmitters.

While THC is known to have a positive impact in stabilizing the release of neurotransmitters responsible for PTSD and pain, THC selectively targets molecular and neuropharmacological signaling pathways in both cortical and sub-cortical regions of the brain. In particular, the diminished functioning of GABAergic neurons in the prefrontal cortex (PFC) may lead to the loss of control of the PFC to regulate proper sub-cortical dopamine neurotransmission. The action of THC on CB1Rs can impair PFC-CB1R signaling and associated GABAergic functionality, leading to dysregulation of the normal prefrontal process. This results in an increase in the extracellular glutamate levels and lower GABA which normally inhibits dopamine production. Understanding this process provides the potential for the development of safer cannabinoid-derived formulations using THC and/or the development of novel THC formulations containing neuroprotectants to mitigate these neuropsychiatric risks.

Accordingly, CanaQuest’s primary formulation combines THC with specified quantities of a specific botanical extract. While both are naturally occurring products, this particular formulation is novel, creating a different neurological response preventing the negative side effects often caused by extensive cannabis treatment.

The specific botanical extract is a unique amino acid and is known to cross the blood-brain barrier. In addition, it may regulate the extracellular glutamine concentration in the neurons and by doing so may properly regulate GABA (gamma-aminobutyric acid, which is the major inhibitory neurotransmitter in the brain) and thus inhibit the release of dopamine. This same formulation could lead to THC replacing opioids since the primary addictive effects of opioids are believed to be due to a long-term ‘switching on’ of overactive dopamine. Therefore, CanaQuest’s formula is expected to be superior to THC alone (which does cause overactive dopamine similar to opioids), in that the formula prevents this potential side effect of THC.

Competitive Landscape

The future of medical cannabis lies in medically accepted products for the management of neuropathic pain, hypertension, post-stroke neuroprotection, multiple sclerosis, epilepsy, cancer, and other disorders. An example list of publicly traded companies that have entered or are intending to enter the medicinal cannabis markets are listed as follows:
• Aphria Inc (Canada Licensed Marijuana producer),
• Aurora Cannabis (producer of Cannabis and medicinal solutions following its acquisition of Cannabid Inc.), Bedrocan Cannabis Corp Canada (Pharmaceutical grade medicinal cannabis), Mettrum Health Corp Canada (Licensed producer of medical cannabis),
• OrganiGram Holdings Inc (Canada Licensed producer of organic medical marijuana),
• Tweed Marijuana Inc. (Canada Licensed producer of medical cannabis),
• Cannabis Science, Inc (USA OTC traded biotech company in Colorado),
• Medical Marijuana Inc USA (OTC traded business solutions and partnerships),
• GW Pharmaceuticals plc UK & USA (Owns a patented (MS) product – Sativex.).

We believe that while there is significant growth in this sector, our patented processes will continue to differentiate us and position us to succeed in this market.