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- Avecho Biotechnology (AVE) enters a product licence and supply deal with US-based Team SAAS to grant it exclusive rights to commercialise a recreational cannabis distillate
- The distillate product will contain Avecho’s TPM product derived from vitamin E and proven to enhance the solubility and absorption of drugs and nutrients
- Once manufactured, the product will be sold to companies as a raw material that they can use to make their own recreational cannabis products
- Positively, SAAS has already secured an order from Big Chief, the largest recreational cannabis supplier in the US
- Company shares are up 23.1 per cent to trade at 1.6 cents
Avecho Biotechnology (AVE) has entered a product licence and supply deal with US-based Team SAAS (SAAS).
SAAS was founded by previous CEO of the Bank of Queensland, Stuart Grimshaw and board member of Bionic Vision Technologies, Alan Kwan, who are both actively pursuing opportunities in the recreational cannabis space.
The agreement grants SAAS exclusive rights to commercialise a recreational cannabis distillate that will be sold to companies as a raw material they can use to make their own recreational cannabis products.
The distillate product will contain Avecho’s Tocopheryl Phosphate Mixture (TPM) proprietary drug delivery system which SAAS will purchase for an agreed fixed price.
TPM is derived from vitamin E and is proven to enhance the solubility and oral, dermal and transdermal absorption of drugs and nutrients.
Positively, SAAS already received its first order from Big Chief which is the largest recreational cannabis supplier in the US.
Avecho CEO Dr Paul Gavin said the deal with SAAS is a fantastic opportunity.
“We have long held a firm belief that our work and technology in the pharmaceutical
cannabinoid space would drive interest in the other cannabis markets, including recreational,” he said.
“Recreational cannabis in the US and globally represents a large and lucrative market for TPM – based primarily on the fact that there is limited innovation and product differentiation, which we can seamlessly support.”
Under the five-year deal, Avecho will receive 50 per cent of SAAS’ net profit after tax on product sales to be paid on a quarterly basis. SAAS must pay a minimum licence fee of US$1 million (A$1.4 million) within the first 12 months, US$2.5 million (A$3.5 million) within the first two years and US$5 million (A$7 million) within the first four years.
If SAAS fails to pay these amounts, Avecho has the right to terminate SAAS’ exclusive rights and/or the agreement.
SAAS will immediately focus on commercialisation in California, a US$3.5 billion (A$4.9 billion) market, before expanding into other US states that allow the sale of recreational cannabis products.
Company shares were up 23.1 per cent to trade at 1.6 cents at 1:40 pm AEDT.