Cannabis Science, Inc. (OTCBB:CBIS)

Cannabis Science, Inc. is a pioneering U.S. biotech company developing pharmaceutical cannabis products.


California’s Proposition 19, the legalization of cannabis products, has been a heavily debated topic as of late. If you have trouble sleeping go to the following web site to read all about Proposition 19 - http://www.sos.ca.gov/elections/ballot-measures/qualified-ballot-measures.htm. If that doesn’t put you to sleep, the website includes several other California propositions you can read about.

As I delved into the mountains of information surrounding the topic I came across a company called Cannabis Science, Inc. (CBIS). Their website defines the company as a pioneering U.S. biotech company developing pharmaceutical cannabis products. I perused their press releases and below is my synopsis of several of them along with other information. My synopsis only includes the information from the press releases that I chose to share in this posting. If you would like to review the full press release go to the CBIS website: http://www.cannabisscience.com

March 2, 1010
CBIS announced that they have the results of their survey of more than 1,300 individuals with Post Traumatic Stress Disorder (PTSD) which included a large cohort of veterans. They also reported several prospective drugs for FDA clinical trials. As a result of the survey data and other extensive studies, CBIS said they now have the data necessary their first application for a PTSD drug for FDA clinical trials; the Company plans to hire a group of FDA specialists to handle their first FDA filings.

March 4, 2010
CBIS announced that it has set its second FDA drug target on the $20 Billion "Chronic Pain" market and plan to launch a new survey of cannabis use by chronic pain patients to gather additional first hand information from all chronic pain suffers. You can find a list of drug targets on the CBIS website.

May 24, 2010
CBIS acquired 100% of a private company with two revenue producing operations, an organic medical cannabis growing facility and a medical cannabis dispensary for patients in Colorado in accordance with state laws. This added income provides CBIS with a revenue stream much sooner than otherwise possible and they plan to expand them by acquiring a larger facility which will enhance their ability to develop pharmaceutical cannabis products for FDA approval. The company issued 2.4 million shares to pay for the acquisition of the operations and as compensation for a management contract. Currently, there are 64,570,574 shares outstanding and management expects to retire most of its debt by the end of June 2010 to eliminate a major source of risk. The former owner, Mr. Adam Pasquale, is joining the CBIS as Director of Horticulture with responsibility for managing these operations and the implementation of CBIS’s plan to expand these areas nationally, as the laws allow. As of July 21, 2010, they still have 64,570,574 shares outstanding.

June 1, 2010
Dr. Robert Melamede said that CBIS is negotiating the purchase of a privately held biopharmaceutical company that owns complementary patented intellectual property for specific clinical stage cannabinoid products and uses. He went on to say that they filed a preliminary patent disclosure with the University of Colorado regarding the additional new technology they intend to develop through the targeted private company acquisitions and plan to hire a patent attorney to help with the University disclosure and ultimate patent filings. Additionally, they are working with FDA consultants in their quest to obtain FDA approval for several new pharmaceutical products they believe can be derived from this deal. Dr. Melamede said efforts to identify and consolidate various new technologies aimed at developing pharmaceutical cannabis products for critical illnesses and worldwide distribution would continue.

June 28, 2010
CBIS said they viewed UK-based GW Pharmaceuticals receipt of a $15 million milestone payment from Bayer as an important signpost for the continued validation of medical cannabis. According to the press release, the payment to GW was based on the UK Government's approval of GW Pharmaceuticals Sativex(R), an "Oromucosal Spray" tincture for the treatment of spasticity due to Multiple Sclerosis (MS) and is the first cannabis drug to be approved in the UK. According to Piper Jaffary analysts, peak sales for Sativex(R) could reach $180 million in Europe and Canada combined. The release mentioned that the US FDA previously granted GW a Phase III IND for Sativex, and a Phase IIb/III trial for cancer pain, GW’s receipt of an 18 million dollar licensing fee from Otsuka for the US rights and the receipt of several million from licensing fees from Almiral of Spain for the European rights outside of the UK which included payment for the work necessary to obtain regulatory approval. In a nutshell, it appears that Big Pharma has recognized the potential of this industry and wants a piece of the action. Additionally, the approval sativex(R) by the FDA could potentially lead to the fast-tracking of other whole cannabis extracts.

June 29, 2010
Dr. Robert Melamede PhD, President and CEO of CBIS, said that the expansion of the internal production of CBIS at their Montana Pain Management (MPM) facility would allow them to expand their patient base by 100 new clients each month and help advance their objectives in developing pharmaceutical applications for medical CBIS. He further stated that the coupling of the internal production facility, MPM’s agricultural staff and CBIS’s scientists and commercial production staff aggressively positions CBIS to be a key player in the developing national medical CBIS industry. The release also mentioned that Montana officials were working with Rick Rosio, President and CEO of MPM, to develop policies that protect patients and help them access the medicines they need. An early June press release announced the acquisition of MPM by CBIS in June 2010.

July 8, 2010
CBIS announced their execution of a long-term lease on a 9,500 square foot facility in Denver, Colorado, that will become its corporate offices, as well as serving as a research facility for developing, testing, and production in compliance with the new Colorado laws regulating medical marijuana in the state. What intrigued me was the mention of the “long-term” lease.

According to the CBIS website, several states have already approved cannabis for medicinal approval. From all indications, California is well on their way to approving Proposition 19. If it passes in California and has a positive impact on their troubled economic condition, I wonder how many other troubled states would follow suit?  If it does, it appears as though CBIS is doing everything possible to hit the ground running when the time comes.