MJ BioPharma:
A Biotech Portfolio Company Levered To The Cannabis Industry
2
(TSX.V: VIN) (OTCQB: VNNYF)
Sector: Biotech Industry: Technology Employees: 9 Country: Canada Established: 2014
1 Month Chart
Shares Out: 26.3M
Market Cap: $8.7M
Avg Daily Volume: 45k
Institutional Ownership: N/A
Date: 5/1/2017
Current Price: $0.33
52 Week Range: $0.33 - $1.00
Suitability: High Risk
Company Data
MJ BioPharma is a cannabis technology company led by a team of experienced business
and medical professionals and researchers. Our expertise lies in extractions and custom
formulations. We aim to develop and in-license best in class technologies and products for
the medicinal and recreational markets in North America
3
(TSX.V: VIN) (OTCQB: VNNYF)
The biotech industry will be one of the greatest beneficiaries of legal cannabis and companies
focused on this sector have outperformed the market over the last quarter.
After announcing the acquisition of MJ Biopharma in!mid-December, shares of Vinergy Resources
(VIN.CN) (VNNYF) have been under pressure and we believe this is something investors need to
watch. The company has made several significant developments and earlier this year, it improved its
listing and commenced trading on the OTCQB exchange.
Although this pressure is concerning, it is not surprising due the stock’s rally since November. We
believe the shares are fairly undervalued and expect to see the market respond favorably to the
close of MJ Biopharma acquisition.
MJ Biopharma is a private cannabis technology company based out of British Columbia that is
currently focused on manufacturing breath strips, time release capsules, extract oils, food products
such as infused juices, teas, coffee and extract drinks, as well as the development of pharmaceutical
grade delivery systems. The company is also focused on licensing and partnering on the
development of technologies and products for the medical and recreational cannabis market in
Canada and abroad.
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(TSX.V: VIN) (OTCQB: VNNYF)
MJ Biopharma: A Company to Watch
MJ Biopharma is a private cannabis technology company based out of British Columbia that is
focused on manufacturing breath strips, time release capsules, extract oils, food products such as
infused juices, teas, coffee and extract drinks, as well as the development of pharmaceutical grade
delivery systems.
MJ Biopharma is also focused on licensing and partnering on business initiatives in the development
of technologies and products for the global medical and recreational cannabis market (starting with
Canada).
In!mid-December, Vinergy Resources announced a definitive agreement for the acquisition of MJ
Biopharma. At the time of this announcement, the company also reported a non-brokered private
placement offering of up to 10,000,000 units at $0.20 per unit. Each unit consisted of one common
share and one-half of one transferable common share purchase warrant. The warrant has a 12-
month term and is exercisable into one additional share at $0.40.
The private placement was quickly oversubscribed as Vinergy saw the price of its stock move
considerably higher over the following month. Since then, the shares have been under pressure and
in late March, VIN was halted by the Canadian Stock Exchange pending review of a fundamental
change.
Governments Agencies Recognize Cannabis’ Potential Medical Benefits
From the National Cancer Institute (NCI) to the National Institute on Drug Abuse (NIDA), U.S.
government agencies continue to change their stance on medical cannabis. The biotech sector will
be one of the greatest beneficiaries of the legal cannabis movement and there are only a few
publicly traded biotech companies that are focused on developing treatments from the cannabis
plan.
Last year, the NCI updated its website to include various studies that reveal how cannabis may
inhibit tumor growth by killing cells. The NIDA revised their April 2015 publication to say that
marijuana can kill certain cancer cells and reduce the size of others.
Countries across the globe continue to legalize cannabis and it is only a matter of time until the U.S.
gets on the bandwagon. Although the market continues to keep its eyes on the U.S. cannabis
industry, Canada continues to be the global cannabis leader
5
(TSX.V: VIN) (OTCQB: VNNYF)
An Agreement Based on Success
One of the reasons why we were favorable on the acquisition of MJ BioPharma was due to the
milestone-based compensation structure. Vinergy issued 5 million shares to MJ BioPharma
shareholders and can issue up 3.75 million more shares based on the completion of certain
milestones.
Vinergy will issue an additional 2.75 million shares upon the commercialization of MJ BioPharma’s
strip technology.!The company will issue another 1 million shares of common stock when each of the
two alternative selected extractions/products are ready for commercialization.!
The shares will be subject to escrow conditions and/or resale restrictions as required by applicable
securities laws and the policies of the Canadian Securities Exchange. The transaction remains subject
to certain closing conditions, including, completion of due diligence, the negotiation and signing of a
definitive agreement and obtaining all necessary approvals.
Feb 2017
Acquired 65% of Biolennia Labs, a Health
Canada & FDA licensed lab
Although there has been nothing specific said in regards to this halt, we assume it has to deal with
the closing of the acquisition of MJ Biopharma. One way investors can take advantage of the recent
weakness and volatility is through the company’s United States symbol, VNNYF, which has not been
halted and continues to trade.
Jan 2017
Formed new Scientific Advisory Board (SAB)
consisting of leading BioPharma technology
advisors
Dec 2016
MJ BioPharma announces the signings
of LOI to be acquired by Vinergy
Resources LTD.
Feb 2017
Announced BURST technology - a
breakthrough in oral delivery of cannabinoids
Jan 2017
Vinergy, a company of which MJ Bio has
agreed to an LOI to be acquired closes
$2MM financing
6
(TSX.V: VIN) (OTCQB: VNNYF)
Enters into Agreement to Expand its CBD Extract Business
In February, Vinergy announced a memorandum of understanding with!Namaste Technologies
Inc. (N.CN) (NXTTF)!to commercialize proprietary CBD extract formulations through Namaste’s
retail websites in the United States.
The combination of the two businesses is attractive due to the diverse expertise and assets of each
company. Vinergy CEO Kent Deuters said Namaste is the perfect partner due to its online presence
and established customer base.
Namaste has a huge database of approximately 300,000 customers who visit the company’s
website more than 600,000 times a month. In the first phase of the plan, Vinergy will distribute its
proprietary formulations to Namaste’s monthly unique visitors. The companies will initially focus on
California and Colorado before expanding to other states that have a legal cannabis program.
Announces Breakthrough on CBD Strips and Capsules
In February, Vinergy announced a breakthrough while conducting R&D on its oral cannabinoid
(CBD) delivery strips and controlled time release capsule technology. The company said the novel
approach under development may become the basis for new products where water or saliva is the
catalyst used to activate the carrier for delivery and absorption of CBD into the body.
Management is very excited about this development and believes that this unique approach forms
the basis for a fundamentally new technology and the potential for, a new product category. The
technology is called BURST and this is due to the speed at which it can enhance the body’s
absorption of various ingredients.
The BURST system is built on natural botanical polymers delivering specialty processed high purity
cannabinoids. The patent pending technology allows for a more complete palatable drug delivery
system that is effective and enhances the patient or user experience and can intensify flavors.
Protects Against Cancer
Reduces Nausea
Reduces Pain
Causes Drowsiness
Antidrepresent
Relives Spasms
Decreases Seizures
Reduces Anxiety
Antibacterial
Muscle Relaxant
Protects Nervous System
Anti-Diabetic
Improves Blood Circulation
Relieves Psoriasis
Relieves Chron’s Disease
Anti-Inflamatory
Relieves Arthritis
Antioxidant
Anti Psychotic
Benefits
Of
CBD
7
(TSX.V: VIN) (OTCQB: VNNYF)
Develops State-of-the-Art Extraction System
In March, Vinergy reported the development of a disruptive solvent-based extraction system. The
project is currently underway for an existing customer and the company said it will provide more
information on this soon.
The system is state-of-the-art and its proprietary technology shortens the processing cycle, and
increases the average production yield and while also significantly improves product purity.
The system utilizes a blend of ethanol and CO2 co-solvent and specialized equipment to produce the
highest quality and most pure product. The current iteration of the machine has the physical footprint
of a standard shipping skid and incorporates safety and process control systems in one easy to use
platform.
MJ BioPharma’s CEO said the system has been tested to work with other solvent blends and may be
able to produce end products like terpenes, which would add immediate value to the company.
Acquires 65% of Specialty Laboratory Applying for a Dealer’s License
In late February, Vinergy signed a binding letter of intent to acquire 65% of Biolennia Laboratories.
This is an accretive acquisition that supports the company’s product line and R&D initiatives.
Biolennia is in the process of applying for a Dealer’s License from Health Canada which would let
the company process cannabis for R&D purposes.
Biolennia is a specialty development laboratory with expertise in microbiology and chemistry. The
company’s lab operates out of secure premise in Toronto alongside Micrylium, which manufactures
products registered under licensure from several agencies. It currently provides testing, R&D and
quality control for Health Canada registered and approved industrial disinfectants and other
consumer products on behalf of Micrlylium.
Under the terms of the acquisition MJ BioPharma, will acquire 65% of Biolennia for $260,000 CAD
and 150,000 shares at the time the definitive agreement is signed. Biolennia will provide services to
support MJ BioPharma’s product line, product formulation, extraction facilities, systems design and
develop standard-operating-procedures (SOPs).
Biolennia has in-house expertise when it comes to the methods accepted by both Health Canada as
well as the FDA for determining the purity and quality of many of the materials and methods used in
validating cannabis and or testing cannabis products.
8
(TSX.V: VIN) (OTCQB: VNNYF)
Significantly Strengthens Advisory Board
In mid-January, Vinergy announced that it appointed Dr. William Panenka as the Chair of its
Scientific Advisory Board. The company said this move is inline with it’s strategy to develop, test
and identify specific cannabinoid isolates for targeted therapeutic purposes.
In mid-February, Vinergy made a significant addition to its Scientific Advisory Board with the
appointment of John Simon. He is a senior member of the American Society for Quality, a certified
quality auditor and a registered quality assurance professional in good laboratory practice and
maintains regulatory affairs certification through the Regulatory Affairs Professional Society.
Since 2004, Simon has worked as a consultant supporting clients in the medical device,
pharmaceutical, biotechnology and natural health product industries. He has been directly involved
in United States Food and Drug Administration (FDA) and Health Canada audits of medical device
manufacturers, drug manufacturers, testing facilities, and clinical sites.
Through John's consultancy practice he assists companies with both site licenses and product
licenses. He has helped companies obtain, renew and maintain in good standing Drug
Establishment Licenses;, Medical Device Establishment Licenses, Natural and Non-prescription Site
Licenses, and Licenses to Cultivate and Distribute under the Marihuana for Medical Purposes
Regulations (MMPR which is now under the ACMPR).
Simon also has extensive experience when it comes to product submissions to both the FDA and
Health Canada. As a Board member, he will play a key role driving the company’s cannabis
product and technology initiatives. Simon’s work is critical for MJ Biopharma’s long-term strategy.
The company plans to conduct studies out of a state-of-the-art lab focused on identifying specific
cannabinoid isolates for targeted therapeutic purposes.
In March, Facundo Bacardi was appointed to Vinergy’s Board of Directors and was granted
100,000 options priced at $0.60 each. His background and expertise in the distribution of alcohol
make him a strategic addition to the Board. Bacardi was the head of Bacardi's manufacturing and
distribution division for Nassau, Brazil, Trinidad and Central America.
Since 1990, Bacardi served as a Director of Suramericana de Inversiones, S.A., an investment
company located in Panama and is a founding shareholder of JSM Capital Holding Corp., a
shareholder and Director of Global Arena Holdings.
9
(TSX.V: VIN) (OTCQB: VNNYF)
A Company to Watch
We highlighted Vinergy in mid-December following its announced acquisition of MJ Biopharma as
we were very favorable on the combined company’s potential. The market agreed with our opinion
and the shares moved significantly higher. Since then, Vinergy has seen the price of its stock move
considerably lower despite the company further improving its fundamental story.
Although investors should always be cautious with downward trends, we think it is a stock to watch
and expect shares to rally once the halt is lifted. The TSX Exchange halted trading in late March
pending review of fundamental change.
Based on company announcements and logic, we believe this halt is related the closing of the MJ
Biopharma acquisition and see upside to current levels.
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(TSX.V: VIN) (OTCQB: VNNYF)
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