CFN Media

October 17, 2017 09:00 ET

Abattis Offers a Solution to Canada's Cannabis Pesticide Problem -- CFN Media

SEATTLE, WA--(Marketwired - Oct 17, 2017) - CFN Media Group ("CannabisFN"), the leading creative agency and media network dedicated to legal cannabis, announces publication of an article discussing Abattis Bioceuticals Corp. (CSE: ATT) (CNSX: ATT) (CNSX: ATT.CN) (OTCQB: ATTBF), whose wholly-owned subsidiary is one of the only publicly-traded third-party cannabis testing laboratories. A steady stream of cannabis recalls has prompted regulators in Canada to call for the mandatory testing of cannabis for unauthorized pesticides. With only a handful of third-party laboratories licensed to test cannabis, these service providers are becoming increasingly important.

Product Recalls Present a Problem

There have been at least ten product recalls from a wide range of licensed producers over the past year, according to government notices. Many of these recalls were made after finding banned pesticides -- such as myclobutanil and bifenazate -- that exceed levels permitted in food production. Unfortunately, many consumers don't track these notices on a regular basis and often end up consuming tainted product -- a big problem for the industry.

The Access to Cannabis for Medical Purposes Regulations makes it clear that only the 17 pesticides listed under the Pesticides Act for use on cannabis crops may be used at any point in cannabis production. There are no exceptions to these requirements and no situations where using an unauthorized pesticides would be acceptable. But, many licensed producers still seem to be struggling in their adherence to these rules over time.

The Canadian government recognized this problem and announced that it would begin a series of unannounced inspections in May. As part of the inspection, Health Canada found banned pesticides in two of the seven licensed producers that it tested and subsequently announced that it would require all licensed producers to conduct mandatory testing of all cannabis products destined for sale for the presence of unauthorized pesticides.

Investing in Laboratory Testing

Many licensed producers have their own internal laboratory testing facilities, but the string of product recalls has called their accuracy into question. Third party laboratories may be better equipped to effectively test for pesticides -- as well as cannabinoid content -- while avoiding any potential conflicts of interest. While federal guidelines are unclear whether testing will have to be independent, there's no question that independent testing is a best practice.

Through its wholly-owned subsidiary, Abattis Bioceuticals Corp. is one of the only publicly-traded third-party cannabis testing laboratories. In addition to its pure-play status, the company operates in British Columbia, which is home to 15 licensed producers. The company's services could become increasingly in-demand as Health Canada unveils new regulations and consumers seek out products that have been reliably tested.

Cannabis testing and analysis opportunities such as Abbatis offer less regulatory risk versus the highly regulated cultivation side. Furthermore, there are significant growth opportunities from increased regulations. In fact, Markets and Markets believes that the cannabis testing industry could reach nearly $1.5 billion by 2021, which represents an 11.5% compound annual growth rate that could accelerate if more regulations come into effect.

Looking Ahead

Abattis Bioceuticals Corp. (CSE: ATT) (OTCQB: ATTBF) represents a compelling opportunity in the cannabis industry. With a growing number of issues with tainted product, Health Canada has indicated that it would begin regulating the market. Third-party testing could become a big part of the business given the conflict of interest stemming from self-testing, while Abattis offers diversity with its other business holdings.

Abattis is well positioned to be a leading full suite downstream service provider for the entire cannabis industry. Whether it is research and development, extraction and formulation, testing and analysis or sales and distribution, Abattis wants to develop itself as a leading service provider as the industry continues to evolve and more and more cannabis supply hits the market. By becoming a go-to resource, the company could gain valuable exposure to the industry without as much regulatory risk as pure-play cultivators or retailers in the medical or recreational cannabis space.

Please follow the link to read the full article:

About CFN Media

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