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Vape's Acquisition of BetterChem Bolsters IP Portfolio

SEATTLE, WA / ACCESSWIRE / July 6, 2015 / The cannabis industry could reach $35 billion in size by 2020, according to GreenWave Advisors, but the big question on the minds of investors is which companies are best positioned to profit.

Companies like Terra Tech Corp. and GrowBLOX Sciences Inc. are focused on developing growing technologies, while companies like GW Pharmaceuticals plc (NASDAQ:GWPH) and Cannabis Science Inc. (CBIS) are looking to capitalize on the medicinal properties of the cannabis plant. Others like CannLabs Inc. (CANL) and Pazoo Inc. (PZOO) are setup to test cannabis products for safety and quality.

Vape Holdings Inc. (VAPE) has been focused on developing ceramic vaporization elements through the HIVE product line, and providing compliant packaging, branding and consulting services to the legal cannabis industry. It has now expanded to include the chemistry of plant essential oils, extraction and analysis through its acquisition of BetterChem. Management believes that these new approaches could help build a durable intellectual property (IP) portfolio targeting significant financial opportunities both inside and out of the cannabis space.

Plant Essential Oils:

Dr. Mark A. Scialdone founded BetterChem in 2013 following a distinguished career in product development R&D with E.l. DuPont de Nemours (NYSE:DD). BetterChem has consulted on chemistry projects with international clients ranging from applications in personal care products to industrial chemicals. In the personal care products application, a plant essential oil is extracted and then refined into an EPA-Approved insect repellent. BetterChem has been retained by the group that has licensed this technology for commercialization, and is heavily involved in developing the international supply chain for the active ingredient.

Dr. Scialdone's practical experience in researching plant essential oils is directly applicable to many other plants including cannabis. In his work, he has employed chemical analytical methods to characterize the mixtures of the many compounds found in different plant oils. By understanding the molecules present in these oils, chemically modified essential oils can now be discovered, characterized, and tested for improvement of properties vs. the starting oil. These unique and novel compositions can be formulated and adjusted to address specific medical conditions in different patients. The chemical modification is anticipated to improve various properties including bioactivity, stability and physical properties.

Patent Problems:

Many companies have successfully patented various cannabis compounds and derivatives, such as specific cannabinoid and terpene profiles. While these patents were issued by the U.S. Patent and Trademark Offices, their value depends largely on how they will hold up in court if they are challenged. There is very little to stop experienced home growers from copying these strains when developing their own plants, while some question the legality of patenting nature.

Vape Holdings' acquisition of BetterChem enables it to take a very different approach. By patenting new compositions and the processes to prepare them, the company aims to establish an extremely sought after IP portfolio of licensable property. This IP provides opportunities for quicker monetization than the approach taken by many in the space.

For example, the essential oil of the catmint plant is a very dark and pungent material. Using hydrogenation to chemically modify the oil improves the physical and chemical properties, making a safe and effective, naturally derived end product for human use.

Looking Ahead:

Vape Holdings' acquisition of BetterChem provides a unique opportunity over the coming quarters to build tremendous value within the industry under the direction of the experienced chemist Dr. Mark A. Scialdone. With an existing presence in the vaporizer space, the addition of patented compositions could be a highly synergistic and valuable addition to its business, since the compounds could be used in its own vaporizers.

In addition to its potential within the cannabis industry, the company could expand its focus down the road to include other plant essential oils. Insect repellent represents just one of these potential areas of focus, while others could include everything from cosmetics and fragrances to nutraceutical and pharmaceutical compounds derived from natural sources.

For more information, visit the company's website: http://vapeholdings.com/.

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SOURCE: Cannabis Financial Network