VIDEO: Sproutly Canada Inc (CNSX:SPR) Making Cannabis Water-Soluble

Sproutly Canada Inc (CNSX:SPR) (OTCMKTS:SRUTF) (FRA:38G) Chief Science Officer Dr. Arup Sen sees the company’s recent purchase of Infusion Biosciences as vital for Sproutly’s long-term cannabis beverage strategy. Sproutly now holds the rights to an innovative process for producing naturally water-soluble cannabinoids and terpenes directly from the plant instead of water miscible products from oil, the standard practice in the cannabis industry. Sproutly’s water soluble cannabinoids, Infuz20, can be added to any beverage, and its oil, Bio-Natural, can be added to any edible where oils are used. Sproutly intends to both market its own products and to work with others to leverage its technology into competitors’ product portfolios.

Transcript:

James West:   Hey, welcome back to Midas Letter Live. My guest this segment is Dr. Sen from Sproutly. Dr. Sen, thanks for joining me today.

Dr. Arup Sen: You’re welcome, thank you for the time.

James West:   Dr. Sen, recently you were acquired by Sproutly, your company was acquired by Sproutly. What exactly is it that your company does that Sproutly was interested in acquiring?

Dr. Arup Sen: Right. So Infusion Biosciences, we are a wholly owned subsidiary that has Canadian and European rights in producing naturally water-soluble cannabinoids, terpenes and other active materials from cannabis and hemp plants. And so that subsidiary with the Canadian and European rights is what got morphed into Sproutly.

James West:   Interesting, and is making cannabinoids soluble – is that something that others can’t do, or are having a hard time doing?

Dr. Arup Sen: Well historically, they have taken oil extracted from cannabis and they have tried to formulate using technologies that have been around, like emulsification, encapsulation and the like. Those technologies have been used for about the last 40 years, so that’s what the industry has been doing.

What we were able to do, and that’s what the innovation is, is pull out from the plant itself, not the oil, but water soluble forms of the cannabinoids, just like in that picture that you see. Cholesterol in the human body exists in water soluble form in our blood, but as free oil in our tissues. So that’s what we’ve been able to do, is pull out the water soluble forms of cannabinoids and terpenes from the plant itself. And that’s the difference.

James West:   I see. And so in terms of creating ingredients from cannabinoids and having them able to, you know, blend in with things like edibles and vape resins and whatnot, the solubility is a key feature on how well it is actually blended, and also probably affects titration and other issues like that?

Dr. Arup Sen: The key feature of the water soluble is that you can put it into any beverage and, in fact, if I have a little bit of time, I’ll show you the difference between putting our water soluble in, let’s say water or non-alcoholic beer, and what happens if you put oil into a beverage formulation. And therein lies the biggest difference, is that if the material is actually water soluble, it mixes into any beverage of any nature that’s water-based.

James West:   Hmm, interesting. And then so, your combination with Sproutly is going to give Sproutly quite an edge in formulating beverages and other products that involve ingesting cannabinoids through blended products.

Dr. Arup Sen: That is correct. Two things: one is, we can produce cannabis beverages simply by adding our water soluble to water. In addition, what we can do, actually being able to have it in water solution, we can apply our material to literally any beverage with the Infuz2O, as we call it, which is an actual water soluble cannabinoids, and the Bio-Natural oil that also comes out the process, we can add that to any edible where now oils are used. In fact, with the joint venture partner, Infusion is in the process of launching edibles, namely candies, that use our Bio-Natural oil.

James West:   Okay. There are other companies out there that are making things like beer and soft drinks and energy drinks, or drinks in those categories, who claim to be able to create soluble cannabinoids in their products. They’re not using the same process, are they? Or are there many ways to achieve this?

Dr. Arup Sen: Well, what is achievable, and that has been done for, as I said, last four decades, is to take oil and make it what would be technically, scientifically called water compatible or water miscible. And that’s what the industry has done, by first getting the THC or CBD oil and then making it miscible with water.

What we have done is absolutely different, and that is pulling out the water soluble form in the way that Mother Nature made it in the plant itself. So there is a huge difference in us, the laboratory or the technologies formulating oil into water, or mimicking the way Mother Nature does in every single organism, and that is to produce naturally water soluble forms of literally all different oils that exist in a plant or a human.

James West:   Okay, so then, that’s the difference: one group is making water miscible products, and you’re making water soluble products?

Dr. Arup Sen: That is correct. So when you start with oil and formulate it with the technologies, at the best it can make it water miscible. So then the huge difference is, when it goes into the body, the body recognizes it not as naturally water soluble but as mixed or blended with water. Then the body has to take that material, re-process it to make it naturally water soluble, and then become active. And that’s why our water soluble material is very fast onset – less than 5 minutes – very fast offset, less than 60 minutes, whereas oils formulated with the technology and made water miscible or water compatible, their onset time is potentially faster than free oil, but the offset time and the efficiency is exactly the same as free oil that has been used for literally a long time until people tried to make the oils water miscible.

James West:   Interesting. So this is based on a technology that won a Nobel Prize in the 1980s. Can you sort of elaborate on that process and that technology, and how this sort of relates back to that?

Dr. Arup Sen: Sure. So in the 1970s, actually, through the 1970s, when somebody went in to get their blood drawn and wanted to determine heart attack possibilities and the like, they were back then measuring total cholesterol and total triglycerides, which are both oil in our body. So they would take a blood sample, extract out the oil, cholesterol and triglycerides, and measure that.

In the 1980s, Doctors Brown and Goldstein out of UTS Southwestern and Texas discovered that there are actually what are now known as HDL and LDL and VLDL that exist in blood in a water soluble form. That led to a complete transformation in the way we now diagnose heart attack risk and so on and so forth, when we actually measure, if we look at your blood chemistry profile, the amounts of HDL and LDL and the ratios and the like. So those are new methods of analysis, and looking at water soluble forms of cholesterol.

So what we said is, does that happen with respect to cannabinoids and terpenes and other oils, in plants? And that was the foundation of discovery that led us to realize that yes, just like cholesterols in the human body, THC, CBD, cannabinoids, terpenes do exist in naturally water soluble form in plants. And then our patent-pending process was to be able to pull them out without destroying their naturally water soluble form, which is what happens when you extract with organic solvents like butane, ethanol, or superheated C0₂, where you destroy the infrastructure and isolate out the free oil.

So our discovery was really along the lines of the discovery that Doctors Brown and Goldstein had, which was to recognize that there are naturally water-soluble forms which can readily be added to anything that’s water-based without having to add anything, formulate anything.

James West:   Okay, you mentioned patent-pending. So are we to infer from that statement that your technology has a lot of intellectual property associated with it, and that you’re in the process of protecting it through patents?

Dr. Arup Sen: Correct. So the patenting process is the strategy we have taken; we have filed patent applications in the United States, and the way it works is that secures us of the priority date, and then you go into a global mode within about a year and a half to two years, and we intend to apply for those patents literally in all major commercial countries. The add-on that we have a unique situation is that we are keeping our proprietary agents that we use to pull out the water soluble as trade secrets. So the patenting process will prevent other people from coming up with protecting or getting protection on comparable processes, but our real protection gets added to that in that our reagents are going to remain quiet as a trade secret that we will provide to our partners literally all over the globe.

Initially, Sproutly for Canada and Europe will be able to use those reagents to practice the process, and then eventually when we are progressing much further along the patenting process, we will decide how else we need to file patents. For example, the formulation that we have created already, they will be filed as individual, single-use patents. There will be kind of a web of intellectual property that’ll both protect us, and allow us to prevent other people from doing something comparable.

James West:   Hmm. Interesting. So then, now that you’re sort of a public company and are going to access capital from public markets, what are the sort of near-term projects that you’re hoping to execute as a result of your new partnerships?

Dr. Arup Sen: The first set of products, obviously, will be in Canadian markets, and we will use first our oils, both THC, cannabis oils and so on and so forth, because unlike other oils that have been extracted away from everything in the plants with organic solvents or C0₂, ours retain the complete spectrum of all the oils, including, by the way, the vitamin oils like Vitamins A, E, Omega oils that are found in plants – all of those are in our, what we call Bio-Natural oil. So those are going to be formulated into tinctures as well as capsules. So those are the near-term ones, as soon as we get our extraction and sales license.

But the real focus, which we hope will happen to be approved by Health Canada sometime in 2019, are going to be beverages. And that’ll range from non-alcoholic beer and wine all the way to energy drink lookalikes, relaxation like sleep promotion beverages, and for that matter, simply water with – either sparkling or still water – with cannabis components. So we will cover the entire gamut of the $50 billion-plus beverage industry that includes bottled water to functional beverages.

James West:   Interesting. So do you see that your technology, so you’ve got your eyes on these products, but also I could see a situation where there’s great opportunity to license your ingredients to manufacturers of other products, even though they might be competitors at the retail level. Is that part of the strategy?

Dr. Arup Sen: Yes, absolutely. And you know, this is pretty much same as what the biotechnology started doing back in the, started from late 70s. Genentech, which is literally the largest biotech company, they licensed insulin – genetically engineered insulin – to Eli Lilly, who was selling regular insulin prior to then. So yes, we will have the opportunity to both market product that we formulate as well as either license and/or custom create formulations for other companies. For example, if we have a large global footprint, non=alcoholic beer company we’ll obviously provide customized blends for them, because they might want some certain profile in their product that would not have an interest in or could not do.

So yes, you’re absolutely right: this opens up for us to play both in our own product category as well as working with others to leverage our technology into their product portfolio.

James West:   Fantastic. And so when does this all start to generate a profit?

Dr. Arup Sen: Good question. I would hope as soon as we get the beverage on the marketplace, that’s when you’ll see the profit growth. But our goal is with the edibles, like tinctures and capsules with the oil itself, is to start generating revenues as soon as we get the sales license, and start cultivating both internally in our Toronto facility as well as being able to procure biomass from other people and produce even more oil. Because in our process, we are producing both the Infuz2O and the Bio-Natural oil, and the oils are easier right now because people are used to it, and we can readily take that to market very quickly.

The water soluble material, as you probably know, real beverages requires a lot of formulation work, and the type of product that you see in the marketplace like some of the States in the US, they really are not real beverages. They have stuff that can get people high, but that is not what the beverage industry is really looking for. They’re looking for clean-tasting, low-dose, proper functionality in their beverages.

James West:   Okay. Well, Dr. Sen, that’s very enlightening, and congratulations on the transaction. We’re going to come back to you in due course and see how you’re making out. Thank you very much for your time today.

Dr. Arup Sen: Great. Thank you. Take care.

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Original article: VIDEO: Sproutly Canada Inc (CNSX:SPR) Making Cannabis Water-Soluble

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