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Replies to post #4111 on Halo Collective Inc (HCANF)
08/10/21 2:14 PM
Despite the ramp up in patent filings, most operators are still woefully unprepared to face the potential onslaught of infringement claims and lack a robust risk-mitigation strategy. This is especially true of companies selling concentrates-based products—be it edibles, topicals, shatter, butter, or vape cartridges—since all of these products directly or indirectly utilize extraction equipment, which represents some of the most advanced and heavily patented technology in the industry. Companies that produce and sell concentrate-based products are almost certainly infringing someone’s patents and are at serious risk of being subject to patent litigation.
Unlike selling raw flower, which requires less technology, concentrates-based products involve highly technical and fine-tuned equipment and processes that have been invented and patented in the past decade.6 You might not know that these patents exist, but they do. There are over 60 issued patents covering extraction technologies that have become widely adopted, including in-line dewaxing, low-temperature extraction, and solvent recovery techniques. Add in patents covering post-extraction treatments, formulations, and delivery mechanisms, and you’re looking at hundreds of more patents.
What’s the worst that could happen? The most severe outcome, although rare in the United States, is that you receive an injunction, which prohibits you from making, using, or selling a product that was deemed to infringe another’s patent rights. The less severe, but far more likely ‘worst case scenario’ is that you’ll receive a complaint from a patent owner alleging infringement, you’ll tell them to ‘get lost’, they’ll file suit in court, where you’ll have to spend hundreds of thousands or millions of dollars defending your position in formal litigation. At that point, you may opt to settle, but the terms you will be offered will likely be far more expensive than those you would have received if you had negotiated terms before going to court (or, even more ideally, before the claim is even made). If you decide to litigate to a verdict rather than settling and the jury sides with the plaintiff, you’ll end up paying a portion of past and future revenue attributable to the infringing product, with this rate tripling if the jury believes that infringement was ‘willful’ (i.e. known by you, the defendant), and potentially even be forced to reimburse the plaintiff’s legal fees.
FOR CANNABIS OPERATORS IN A HYPER-COMPETITIVE MARKET, POTENTIALLY STRUGGLING WITH THIN MARGINS OR CASH FLOW CHALLENGES, LOSING A PATENT LITIGATION COULD MEAN THE END OF THE COMPANY.
08/10/21 4:52 PM
Halo Announces Agreement to Acquire a Cannabis Processing Technology Company
1275111 has developed certain patent pending intellectual property relating to cannabinoid filtration and purification. The Company expects that technology to be acquired will result in certain cost savings and enable Halo to process higher quality cannabis products on a more consistent basis.
Josh Haddox, Halo's SVP of Operations, stated, "Beyond the fact that this company has novel technology that should reduce Halo's overall production costs, we are acquiring a potential new revenue royalty stream. This technology is applicable to almost all industry players, and we expect full implementation as early as March, 2021."
