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With CBD growing rapidly as a new product supplement category since appearing on the mainstream scene a few years ago, companies in the hemp and cannabis space have been trying to spark excitement around other so-called “exotic cannabinoids” to follow in its footsteps, but with little success. However, that narrative may be about to change.

For a little background, the cannabis plant contains a variety of naturally occurring compounds called cannabinoids. The most common two cannabinoids are THC (tetrahydrocannabinol), the psychoactive compound responsible for the “high” that comes from smoking marijuana, and CBD (cannabidiol), a non-psychoactive compound with a variety of documented health and wellness benefits. But there are many other cannabinoids that may offer up big market potential in the future, including CBG (Cannabigerol), CBC (Cannabichromene), CBGV (Cannabigerivarin), THCV (Tetrahydrocannabivarin), CBDV (Cannabidivarin), and CBCV (Cannabichromevarin)

However, companies have been unable to scale up production of these “exotic cannabinoids” due to their higher relative cost of isolated production either through extraction or synthesis.

But one company appears to have found an answer: MCTC Holdings Inc (OTCMKTS:MCTC), now doing business as Cannabis Global, Inc. (OTCMKTS:MCTC).

Project Varin

Cannabis Global (OTCMKTS:MCTC) announced its Project Varin some months ago. The name referred to its research initiative to find a way to produce a cannabinoid called tetrahydrocannabivarin (or “THCV”). Sometimes called “the skinny cannabinoid”, THCV is thought to potentially have weight-loss applications. Companies have explored producing THCV at commercial scale in the past only to give up for cost reasons.

However, MCTC just announced a breakthrough in THCV production and now has already moved into a beta launch of commercial-scale production of THCV infused beverages that will soon be available on Amazon.com.

According to the company, “Cannabis Global has integrated three internally developed technologies into the unique manufacturing process for the industry’s first THCV beverages. The first of these is the process developed by the Company to produce 70%+ loaded THCV, controlled release, nanoparticles utilizing laboratory-based, pharmaceutical-grade production equipment. The Company is also utilizing both its internally developed powerization and one step dosing system, ensuring precise dosing and significantly faster production. The Company has filed provisional patents on all three technologies.”

That last statement is important. If the company can commercialize this successfully, and also prove that their technology represents a solution that can make exotic cannabinoid production cost-effective at commercial scale, and they have strong IP protection in place, then the upside here is potentially enormous because the sales of the THCV beverages would represent just the tip of the iceberg, with a far larger market in technology licensing potentially ready to blossom for MCTC shareholders.

Innovation is Always the Biggest Driver

Just how valuable could MCTC’s new methods of production turn out to be? Naturally, it’s very difficult to say. But we can point to the company’s most recent press release to get a pretty good idea.

“We think we have rewritten the exotic cannabinoid cost equation via our Project Varin. The minor exotics represent a new cost challenge for the industry, and we believe we have developed a strong and defensible solution,” commented Arman Tabatabaei, CEO of Cannabis Global. “Acquiring THC and CBD from plants within the Cannabaceae family is relatively easy as these cannabinoids are produced by nature in abundance. It is a very different issue relative to THCV, CBG, and other exotics. With our patent pending technologies, we have been able to rewrite the cost equation for minor cannabinoids, while at the same time moving well beyond the purity possible from legacy technologies. While we are already at a 50% cost advantage to the competing technologies, most of which are still theoretical and not yet available on the market, we believe further travel down our cost curve is possible as we move into high volume manufacturing this month.”

The company goes on to note that its methods admit zero possibility of any external impurities or contaminants and no dangerous chemicals are used in production. It’s 100% pure and can be produced at a cost that allows for commercially viable THCV infused products in the marketplace.

One infers from the company’s descriptions that this same technology-driven solution can be applied to the production of other exotic cannabinoids and perhaps additional compounds, opening up new product possibilities.

Given that we have recently started to see M&A interest by big Canadian cannabis companies in smaller CBD names – most notably, Aurora’s (ACB) takeout of Reliva – recent headlines out of MCTC may spark new interest in shares.

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