From Tim. What he says makes 100% complete sense!
Perhaps it's a bit early for a minor cannabinoid market?
I don't want to raise any unnecessary concerns but it's worth having a little reality check. Regardless of what the "competitors" are doing in biosynthesis, I think InMed will likely be first to market with a minor cannabinoid because they will have the toxicology and safety studies completed to go along with any minor cannabinoid they intend to produce.
The important thing for us to understand is that there are important steps before anyone can use products with minor cannabinoids. They must be tested. I don't pretend to know the FDA process for approval of cannabinoids but one thing is clear, InMed had to conduct toxicology studies on their undisclosed cannabinoid and have an application for phase 1 trials in humans.
As a result, I am assuming that the use of any of the minor cannabinoids in anything more than the trace amounts found in the natural plant extract will likely have to go through toxicology and phase 1 safety trials.
Eric Adams stated that "When the time is right" they would announce a plan for commercialization. I think it is safe to assume that the time will be right when the cost of production is less than the extraction cost and there is a viable market for new cannabinoids.
There is a cost to do toxicology and safety studies so there is definitely a chicken and egg problem. One company is going to have to have an economic model for creating a market before the products are launched. Apple was a big and profitable company when they release the iPad and iphone. That was a huge investment for a market that didn't exist.
So which competitors are going to have the wherewithal to self-fund a Research Use Only product ahead of regulatory approval? The short answer is the companies doing active research in the application of minor cannabinoids. That, I believe, is only GW and InMed at the moment.
So in InMed's case, I am guessing the time will be right when they announce the results of their phase 1 and they can package their unique, minor cannabinoid with a safety certification for cosmetics or pharmaceutical companies to test out.
For a pure-play manufacturing company, they only short-term or midterm revenue stream would be for CBD or THC. I may be wrong but I believe these cannabinoids are going down to commodity pricing levels.
Just a few thoughts with no particular conclusion. I still have clinical trials and pharmaceutical applications as my value driver in my investment thesis.
