[ACCESSWIRE]
WHITEFISH, MT / ACCESSWIRE / May 12, 2015 / Peak
Pharmaceuticals, Inc. (OTCQB: PKPH) and
Canna-Pet, a leading innovator of non-prescription hemp based cannabinoid
products for animals, announced early in April that an initial trial run of
their newly formulated MaxCBD Maple Bacon Biscuits sold out much faster than
anticipated. Given the rapid acceptance of the product, it was no surprise that
the Company acted quickly to update its online inventory and recently announced
that the product is once again available for purchase at www.canna-pet.com.
For those not
familiar with the Canna-Pet(R) product line, their supplements are made with hemp
plant extracts, using a proprietary manufacturing process designed to yield
products that mimic as closely as possible the phytochemical profile of the
hemp plant. While the hemp plant is part
of the cannabis family, it only contains trace amounts of the psychoactive
compound THC, and is consequently available for sale in all 50 states.
"There are both
regulatory and safety concerns associated with using THC containing or
'marijuana' based products for animals, and it can be confusing when our hemp
supplements are described alongside 'marijuana' based products under headlines
such as 'Pot for Pets,'" says Company CEO Dr. Soren Mogelsvang.
"Canna-Pet is one of the very few pet products that contains CBD from
hemp, and the product lineup differs from its competitors through the use of
proprietary ratios of hemp-derived cannabinoids and terpenes."
Success in the Pet Industry
Peak Pharmaceuticals first entered
into the pet industry in July of 2014 through a licensing agreement with
Washington-based Canna-Pet LLC. In exchange for royalties, the company secured
perpetual exclusive worldwide rights to all of Canna-Pet's current and future
cannabinoid-containing pet products made with industrial hemp, a key ingredient
that's legal across all 50 U.S. states and several other countries.
Since the acquisition, the company
has grown the brand to include a number of different products, expanded
distribution onto Amazon.com, and implemented marketing campaigns that have consistently
grown sales. The firm's most recent 10-Q
filing show its very first quarterly sales figures achieved $161,360 with a
72.7% gross margin, suggesting early success in what appears to be a highly
scalable model.
The 72.7% gross margin is higher
than virtually all of the big players in the nutraceutical and pet supply
industries; including GNC Holdings (NYSE: GNC) at 37.22%, Whole Food Market
(NASDAQ: WFM) at 34.81%, PetMed Express (NASDAQ: PETS) at 34.7%, and VCA, Inc.
(NASDAQ: WOOF) at 22.8%.
As noted previously, the company launched
its latest Canna-Pet product line in April with great success. Due to significant
consumer demand the company has opted to add MaxCBD Canna-Biscuits for dogs to
its permanent line-up, while researching additional new product lines moving
forward.
Expanding into the Human market
Peak Pharmaceutical's mid-term goal
is to market hemp-based products for humans by leveraging its experience from the
pet industry. According to management's comments, the industrial and commercial
intelligence being gathered via its veterinary activity is "positively
impacting" its timeline for achieving the goal of testing and launching its
first hemp-based products for humans before year-end.
The market for hemp-based
cannabinoid supplements for humans has been steadily growing over the past
couple of years. With new research suggesting CBDs may beneficially impact a
number of health issues, consumers are increasingly seeking out CBD supplements
to add to their diet. Research from companies like GW Pharmaceuticals plc. (NASDAQ:
GWPH) and others could further bolster the market.
The supply side of the market
remains a highly fragmented segment that's ripe for market leadership. While CannaVEST
Corp. (OTC: CANV) is a supplier of hemp-extract, and Cannabis Science Inc. (OTC:
CBIS) is developing CBD-based medical compounds, there are few large companies
working in the supplement space. With
larger players such as Blyth Inc. (NYSE: BTH) remaining outside of the market
entirely.
Looking Ahead
Peak Pharmaceuticals could benefit
from the tremendous potential growth in cannabinoids in the same way that
nutritional supplement firms benefited from the growth in omega-3's throughout
the 80s and 90s. With the potential to be on the leading edge of a billion
dollar industry, investors in the cannabis and nutritional supplement
industries may want to take a closer look at the stock.
The company trades with a market
capitalization of just $14 million right now, which could be significantly
undervalued, especially if the Company is successful in executing upon its
vision. With the early success in the Canna-Pet business, the market could
ultimately assign a higher valuation to the stock over the coming quarters, especially
if sales growth rates continue to be seen in the financials.
For more information, visit the
company's website at www.peakpharma.com.
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Except
for the historical information presented herein, matters discussed in this
article contain forward-looking statements that are subject to certain risks
and uncertainties that could cause actual results to differ materially from any
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not registered with any financial or securities regulatory authority, and does
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herein and may increase or decrease such positions without notice. For making
specific investment decisions, readers should seek their own advice. Emerging
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SOURCE: Emerging Growth LLC