Creative Edge Nutrition - Beneath the surface
It's no secret that for many, the definitive climax to the fervently debated OTC:FITX saga, would be characterized by the issuance of a license by the Canadian government to grow and sell up to 1.3 Million pounds of medicinal cannabis on an annual basis. We all know FITX is a publicly traded company, and as such, investors seek revenue first and foremost to secure and grow their investment…
However, by focusing solely on this element of the company, one may "overlook" the full extent of the company's capabilities and aspirations, perhaps subsequently missing out on a very rare investment opportunity.
Let me draw your attention for a moment if I may, away from the methods and tactics of the company's CEO, Bill Chaaban, away from the pending issuance of a grow license (or 2 to be exact), away from debates about company share structure, shareholder lawsuits, and internet slander.
If we temporarily remove these elements and distractions from the equation, we can then begin to focus on the actual company that is being built, and we can begin to hypothesize what the end result may be, based upon the steps being taken, and in which direction those footprints appear to be moving.
There are 2 main aspects of this company to which I would like to address in this article. The first is science and the other (albeit perhaps more briefly) is the company's financial profitability. Both appear to be being built simultaneously into the company's foundation by what appears to be strategically placed building blocks, acquisitions, and world class team and board members.
The Science - Forging a creative edge in the market
In the most recent press release from Creative, Dr. Sam Alawieh announces the creation of 5 key research and development divisions that would address the company's vision in growing long term profitability through innovation and research. These divisions are: Genetic Engineering & Cloning, Genomic DNA Mapping & Strain Analytics, Extracts & Delivery Instruments, Pharmacogenetic & Clinical Trials, and Stem Cell & Tissue Proliferation.
It may be worth mentioning that there are 5 key research and development divisions, and there are also to-date 4 very notable key players driving the construction of the company's scientific foundations. These men are none other than Dr. David L. Felten (Chief Medical Director), Dr. Sam Alawieh (Chief Pharmacology & Acquisitions Officer), Dr. M. Kerry O'Banion (BOD), and most recently, Dr. Jonathon Lakey. Perhaps there is room for one more superstar.
The company's newest addition, Dr. Jonathon Lakey, takes the position of Chief Science Officer for Creative Edge Nutrition. Dr. Lakey was Director of Research at one of the top 50 US medical schools for research; UV Irvine. Former director of comprehensive tissue bank and perhaps the most prominent name in the field of diabetes research, Dr. Lakey's research at Irvine has been in the preservation and isolation of tissues, especially the insulin producing cells from the pancreas. His work with Dr. James Shapiro led to the improvements in Islet isolation techniques and the development of the Edmonton protocol for patients with chronic type 1 diabetes. Dr. Lakey's resume boasts a long history of ground breaking research and over 250 scientific publications in diabetes, stem cells, and tissue transplantation, as well as several notable patents.
In his appointment, Dr Lakey states; "It is my goal to take the expertise and infrastructure I have developed over the years and apply it to the field of this research, strong evidence based science will address common misconceptions and provide scientific basis for our efforts. By studying effects of stem cells and differentiation we may gain key insight into pathways of disease treatments and wound healing. Bill Chaaban has done a great job emphasizing that this is the route necessary to take and I couldn't agree more"
One statement in particular is very telling as to the intent of Dr Lakey and perhaps the company as a whole; "By studying effects of stem cells and differentiation we may gain key insight into pathways of disease treatments and wound healing."
What does that mean exactly? Well, it's hard to say to what extent, but we can attempt to at least draw some reasonable conclusions by understanding some basics.
Firstly, cell differentiation is essentially a transition of a cell from one cell type to another, involving a change from one pattern of gene expression to another, while rarely ever involving a change in the DNA sequence itself. The main types of molecular processes that control cellular differentiation involve "cell signaling". There are cells in adult organisms that can "differentiate" into any cell type; these are known as being pluripotent. Levels of differentiation can also be used as a measure of cancer progression. I could go deeper here and attempt to draw more specific conclusions, but my intent is not to turn this article into a scientific research paper, it is merely to highlight the scientific focus of the company on the cellular level of both the patient and plant, coupled with Dr Lakey's intent to utilize stem cell research and differentiation to open doors for disease cures, and possibly even cellular regeneration (known as Dedifferentiation). Though it is difficult to say what could be discovered and unlocked. I am no scientist. However I believe it is important to note that there are important cellular and genetic relationships between human cells and compounds such as THC (Tetrahydrocannabinol) and CBD (Cannabidiol) that have yet to be explored whole heartedly due to restrictions in legality, and that these scientists could very well anticipate being on the forefront of history.
It is also worth mentioning that the background and expertise of each of these men seem to go hand in hand in covering different scientific aspects of the human condition in very specific and relevant areas, such as Dr. Feltons background in neural biology and Dr. Kerry O'Banion's brain inflammation, epilepsy, and neurodegenerative disease studies. Or Dr Alawieh's studies on the effects of CBD and THC compounds within the Cannabis plant in relation to dopamine, and the relationship between dopamine and diabetes that is well known by Dr Lakey.
If I was a betting man, I would say that Creative Edge Nutrition is (in part) building a foundation that seeks to develop a strong presence in the world of "big pharma" by concentrating on cures and treatments related to conditions such as neurological disorders and diabetes. One might also wonder that with the sheer level of world class intellect now working at Creative edge, firstly; what is it that attracted such talent in the first place? And secondly, how could each of these geniuses (difficult to find a better term) put their collective heads together and not end up with at least a few new forms of extremely valuable intellectual property? That is of course a rhetorical question.
The "Business" side of the business
Now I'd like to draw your attention briefly to the financial side of the business (or the "business" side). It's not the share price or market cap that I'm specifically concerned with, since opinions tend to vary greatly as to what constitutes value here. An emerging developing company such as Creative at the forefront of such a young sector is extremely hard to value as there are so many variables in the market and in the overall global climate in general. Taking merely the initial Pharmaceutical potential, medical marijuana grow & research facilities, hemp division for CBD's and building materials, patented grow technologies, pending incorporation of RXNB with its 50,000 patients, insurance division, world class board of directors, and nutritional aspects; one could probably make a very strong case for a billion dollar valuation even before any grow licenses are issued. However, I have also seen valuations on the very opposite end of the spectrum that take none of these positives into account, focusing primarily on the company's larger than average share structure. Perhaps one could draw a valuation somewhere in the middle of each extreme.
However, what I would rather focus on is any strategic moves the company may be making, and the talent behind those moves driving each piece forward, and in turn lend an ear to logic in evaluating the potential of the company within the confines of the foundational elements that have been constructed.
Perhaps I am being presumptuous, but it would very difficult to make a case against the people who are involved with Creative on the business side. This is a company that is being constructed by savvy lawyers, business men, corporate finance specialists, and investment managers. 2 particularly notable mentions I would like to expound upon briefly are Mr. John A. Germinario, and Michael K. Clark.
On April 17th, 2014, Creative announced the appointment of John Germinario as chairman of the board of directors. Mr. Germinario is a veteran in the global capital market place having worked intimately with the SEC, IRS, and FBI on criminal investigations and has very specific experience in the understanding of global securities that he has brought with him to manage the company's regulatory compliance, manage and mitigate risk, and advise in corporate governance, as well as oversee potential mergers and acquisitions and assessing the market in general. The level of corporate ethics and business skills Mr Germinario brings to the table have seemed to be invaluable in helping to provide a safer level of operational comfort when conducting business in the wake of the SEC onslaught that ripped apart the publicly traded marijuana sector recently, leaving bodies in its wake (so to speak). One could perhaps liken the appointment of Mr Germinario to a strategically timed chess move.
And of course there is Mr. Clark (Vice Chairman), who is also the CEO of a Wall Street Financial Institution which supports corporations in both the emerging and established capital markets. Mr. Clark was previously chief executive officer in charge of JPMorgan's $15 trillion Worldwide Securities Services business generating over $3 billion in revenue year over year, was on the JPMorgan Executive Committee reporting to CEO, Jamie Dimon (one of Time magazine's 100 most influential people), and later became President of Fidelity Institutional Investments.
None of these men are even remotely insignificant by any stretch of the imagination; on the contrary, these men have become involved only in the very largest forms of business. In considering these roles, one must in all manner of sound reason, interpret their appointments as such that they are collectively loitering at the doorstep of "big business"… as big business is the only place men like this tend to congregate.
With a foundation as seemingly remarkable as the one evidently being constructed before us, I needn't persuade anyone to buy stock in this company. As I believe the evidence speaks for itself.
Disclosure: The author is long FITX.
Additional disclosure: Note: The author has no affiliation with any company mentioned, and was not compensated in any way shape of form for this article or its content.