Nextleaf Solutions expects its patent-rich portfolio to pay off as Jazz Pharmaceuticals acquires GW Pharmaceuticals

Nextleaf CEO Paul Pedersen said the $7.2 billion acquisition of GW Pharmaceuticals is proof of the value of intellectual property and issued patents in the cannabis industry

Nextleaf Solutions currently owns 12 issued US patents, and 70 issued patents globally, for the extraction, purification, and delivery of cannabinoids

Jazz Pharmaceuticals PLC’s (NASDAQ:JAZZ) recently-announced deal to acquire cannabis-derived drug maker GW Pharmaceuticals plc (NASDAQ:GWPH) for US$7.2 billion in cash and stock has boosted investor interest in the cannabis pharmaceuticals space. It is also, though, expected to benefit companies such as Canadian cannabis extractor Nextleaf Solutions Ltd (CSE:OILS) (OTCQB:OILFF).

Nextleaf describes itself as the world's most innovative cannabis processor, having developed one of the largest portfolios of US patents among all cannabis companies. The company currently owns 12 issued US patents, and 70 issued patents globally, for the extraction, purification, and delivery of cannabinoids.

Just weeks before Jazz Pharmaceuticals announced its agreement to acquire GW Pharmaceuticals, Canopy Growth Corp (TSE:WEED) filed a lawsuit in a US federal court, alleging that the GW knowingly infringed upon Canopy’s intellectual property. According to the complaint, GW uses a Canopy-patented method to extract the CBD that’s the active ingredient in GW Pharma’s Epidiolex medication.

READ: Nextleaf Solutions receives a CBD extraction patent from the Canadian intellectual property office

And while GW Pharmaceuticals said it will defend itself “vigorously” against the allegations, the high-profile case could set a precedent in that as the cannabis sector grows and matures and increases its investment in R&D and innovation, the industry should be expected to follow general business best practices, such as paying for the rights to practice patented technologies.

“The $7.2 billion acquisition of GW Pharma is proof of the value of intellectual property and issued patents in the cannabis industry,” Nextleaf Solutions CEO Paul Pedersen told Proactive.

“In our opinion, owning the means of production for a given molecule is far more valuable than owning the right to use that particular molecule for a given medical indication. A firm that can operate under a safe canopy of IP validated in multiple countries knows that there will be no disruption a decade from now due to otherwise unforeseeable patent infringement claims,” Pedersen added.

Pedersen noted that although he believes pharmaceutical companies have intense interest in the cannabis space he says there’s a huge gap between that and active investment.

“We don’t believe big pharma cares about growing plants; what they care about specifically is standardized molecules and IP protected products that can be taken to market,” according to Pedersen.

Nextleaf’s ownership of issued patents for the production of THC and CBD prodrugs in both Canada and the US are specific examples of this.

Pedersen believes Nextleaf’s chilled alcohol extraction followed by wiped film distillation is the most efficient path to obtaining an odourless, colourless additive well suited for Consumer Packaged Goods (CPG) integration in the cannabis industry.  

“We want to operate unimpeded anywhere in the world where our business is economically viable,” he concluded.

“With our patent portfolio, we have that ability as well as the ability to offer others the same protection.”

Contact Sean at sean@proactiveinvestors.com


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