Abattis Bioceuticals Corp. (ATTBF)

[MGG2]

Abattis Builds an Empire
Abbatis Bioceuticals (CSE:C.ATT, Stock Forum) is going to run a private placement offering to bring in $2 million at $1 per share, according to a news release Thursday.

According to the company, ‘Proceeds from this offering will be used for acquisitions, joint venture opportunities, research and development, working capital, general corporate purposes and in identifying opportunities to expand the Phytalab.com brand and to set up or acquire labs in States where marijuana is legalized.’

Okay, cool. So let’s talk about Abbatis.

This is a company in the early stages of an aggregator business plan that hopes to get themselves involved in every part of the medical marijuana business, from growing to research to processing and sales, with several partnership deals, share swaps, acquisitions and LOIs out there right now. It owns the Abbatis Biocube Green Grow Systems IP, and the Nature’s Juice organic feed products line, and is putting together a Canada-based lab for future research and development.

I haven’t written much about Abbatis because to date because, like Creative Edge (OTO:FITX, Stock Forum) and Enertopia (CSE:C.TOP, Stock Forum), several weed stocks have a business plan to get a small piece of a lot of pies, and simply investing in weed companies is exactly what you people reading this are doing. There’s little need to invest in a company so it can invest in other companies.

That said, Abbatis and FITX are increasingly demonstrating that they’re more interested in vertical integration of medical marijuana than owning a dot.bong investment fund or filling out a Yahtzee card of joint ventures.

Let’s break it down: If you own retail weed outlets, you know your retail weed products will have somewhere to be sold. If you produce retail products, you know your processing plant will do good business. If you’ve got a healthy processing demand, you’ve got somewhere to send your crop.

And if you can toss in fertilizer products and grow systems, and research and development of new strains and products, it’s all one big perpetual motion machine.

But here’s the thing: while a vertical integrator with all cylinders firing can be a beautiful thing, the downside of vertical integration is it only takes one faltering piece to bring the rest to a screaming halt.

And, right now, there are a lot of questions around due diligence of acquisition targets and partners (as Creative Edge found out when it seemingly correctly threw Growlife under the bus recently), and whether companies currently being given the twice over by Health Canada will get a license, and what the rules might be going forward regarding exports, distribution channels, even local municipal zoning bylaws.

Vertically integrating in a distinctly immature sector is a risky business. But it can have massive rewards if done well. Tweed is a monster player in Canada through little more than the agriculture side of things; If a single company can ‘Tweed’ research, grow systems, fertilizers, distribution, even doctor referrals, there’s big money to be had.

The object of the exercise is for a listed company to become the Canadian Tire of cannabis or the Procter and Gamble of pot products and, because these two companies are fast out of the gate, they have first stab at building a brand that will become a household name.

Or, at the least, a mom’s basement name. Or a treehouse-with-Pink-Floyd-posters name.

Read more at http://www.stockhouse.com/news/newswire/2014/04/24/medical-marijuana-update-ghg-flying-as-abattis-builds-an-empire#41qsK0sRYDt2Fm0Q.99