Nextleaf Solutions Ltd. (OTCQB:OILFF) (CSE:OILS) (FSE:L0MA) provided an update on its specialty molecules division, specifically the company's patented novel route of manufacturing D9-tetrahydrocannabinol acetate, colloquially referred to as THC-O.
Nextleaf has recently produced THC-O under the company's Health Canada research license in anticipation of commercialization. Nextleaf has validated its manufacturing process of THC-O through third-party analytical testing.
The company is of the understanding that THC-O is not subject to excise tax as it does not meet the definition of "Total THC" as defined under the Excise Act 2001, which is aligned with the definition of the same in the Cannabis Act.
In Canada, excise tax of a regulated cannabis extract is based on the amount of total delta-9-THC present. Excise tax is a critical issue in the industry, with some cannabis products manufactured with delta-9-THC subject to excise tax over 40% of the duty paid landed cost to provincial government distributors and medical cannabis distributors.
With THC-O, Nextleaf sees potential for market disruption by marketing its novel cannabinoid ingredient as an excise tax-free alternative to delta-9-THC. Nextleaf intends to commercialize the ingredient as a therapeutic product distributed to provincial distributors and medical cannabis sales partners under the company's Health Canada cannabis licenses.
Anecdotally, THC-O products have a more gradual onset, are longer-lasting, and have psychedelic-like effects, as compared to delta-9-THC.
Nextleaf's patented process to manufacture THC-O enables the standardization of a more potent analog of THC. The company holds U.S. and Canadian patents, along with a U.S. patent for a less efficient method to produce THC-O.
Photo by Diyahna Lewis on Unsplash
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