EnWave Corporation Expands Cannabis/Hemp Activities in Europe
The development of Radiant Energy Vacuum (REV) technology has created advantages in performance and efficiency for a wide range of sectors. Many new and established companies have achieved improvements for existing product lines or entirely new products based on REV processing. However the timing could not have been better for this technology breakthrough due to its applications within the cannabis sector.
Enormous worldwide growth is underway for the production of cannabis and hemp plants. REV technology has become the ‘gold standard’ for processing cannabis flowers and drying of hemp plants to make cannabidiol (CBD) oil. Therefore the adoption of REV processing in this sector is effectively turbo-charging the overall growth for EnWave.
The CBD industry in Switzerland is growing fast. And it’s only speeding up.
Intriguing New Partnership Arrangement Announced in Cannabis Sector
This week EnWave Corporation (CA:ENW – $1.78 & US:NWVCF – $1.37 & GER:E4U – €1.25) reported another important license agreement with a company involved in hemp processing. Based in Switzerland, the unnamed partner company is a supplier of dried hemp for the production of medical CBD oil (the hypercompetitive nature of the sector is such that the Royalty Partner prefers to remain confidential). A non-exclusive royalty-bearing license has been arranged, including an initial six-month REV machine lease, to commence processing of hemp plants in Switzerland.
The equipment lease is for a 10kW REV unit. As part of the license deal, the royalty partner will pay a royalty fee to EnWave based on the weight of dried hemp plants processed through the machine. This is to be paid on a quarterly basis. the royalty partner has plans to begin operations immediately. Royalty revenues from the sales of its REV-dried hemp will thus accrue shortly thereafter.
For production of medicinal CBD oil, extremely high standards of quality control are demanded in the processing requirements. The choice to adopt REV processing by the Swiss company is yet another validation for EnWave’s technology that will be recognized by other participants in the sector.
Importance of Breakthrough in Swiss Market
Switzerland is considered one of the most advanced nations for its acceptance of the medicinal properties of cannabis and CBD oil. The Swiss are not copying the legislation that’s already out there, but dare to try, explore and push limits to get the most out of cannabinoids’ potential. Here’s why.
As a rule of thumb, the legality of the consumption, cultivation, commercialization of products coming from the cannabis plant is determined by the % of THC in it. In most European countries, the THC threshold is 0.2%, while in Switzerland it’s 1%. This is important, because increasing the THC limit to 1%, allows the plant to grow to its fullest potential and hence provide the best of its medicinal properties.
The main difference between CBD (cannabidiol) and THC (tetrahydrocannabinol) is that CBD does not induce a high whereas THC does. CBD, in fact, has been proven to have many health benefits and uses, such as treating anxiety, stress, epilepsy and depression.
Currently, the Swiss don’t have a formal medical cannabis program. The legislation, which dates back to July 2011, allows doctors to prescribe medical cannabis if, and only if, the patient has a special permit from the Federal Office of Public Health (FOPH).
Patients with such license can access cannabis products such as cannabis oils, tinctures, or synthetically manufactured products such as dronabinol. That is the theory however, the reality is different. The FOPH estimates that in 2017, 70,000 to 100,000 people use cannabis as a medicine in Switzerland, while only 3,000 people have such permit.
Research for the medicinal properties of CBD continues and the Swiss are among the leaders embracing this potential. The beachhead within the Swiss market through this new deal for EnWave is therefore of strategic significance. Other European companies involved in processing of cannabis and hemp may also be prompted to seek license agreements following this announcement.
Conclusion
The deal increases the number of partners in the cannabis sector to a total of seven. More importantly, this is first agreement achieved with a hemp processor based in Europe. The hemp processing subsector is itself becoming a more significant growth channel for the Company.
Additional sales leverage may be forthcoming from this arrangement. When the expiry of the initial lease term approaches, the royalty partner may advance to purchase the leased machine, or opt to buy a larger one to increase production.
To maintain its posture among the top emerging technology companies in Canada, EnWave must continue to deliver new growth. The steady pace of new partnership agreements reported throughout this year, the backlog of REV machine orders awaiting completion in the manufacturing plant, and the record annual revenues already achieved so far, serve as evidence that the Company is successfully advancing its business plan.
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