Vancouver’s cannabis topical developer Ovation Science Inc. (CSE: OVAT) (OTC: OVATF) has signed a licensing agreement for its products with the owner of the largest dispensary on the globe — Las Vegas Nevada’s Planet 13 Holdings, Inc. (CSE: PLTH) (OTCQX: PLNHF).
The companies announced the deal on Monday, which will provide Planet 13 with exclusive manufacturing, sales and marketing rights for Ovation’s topical/transdermal products throughout the state of Nevada. Ovation will be receiving royalty payments derived from wholesale sales through the agreement.
Ovation says a recent in-house study showed that its cream released 38 per cent more CBD than leading competitors and that previous research has demonstrated that the company’s topicals release 10 times more CBD into the skin than other products with five times greater penetration.
The company obtained a patent for the “Invisicare” drug delivery system those products utilize last fall and says creating that system required 20 years of research and development.
“Not only does Planet have the world’s largest dispensary but they have a robust wholesale division which services other dispensaries throughout Nevada,” said Ovation’s President Terry Howlett.
Planet 13’s entertainment complex near the Vegas strip spans 112,000 square feet and the company generates 9 per cent of the state’s cannabis dispensary-derived income. The location raked in US$80.6 million in retail revenue and had over one million visitors last year.
Regulators in Nevada recently approved a consumption lounge within the complex.
“We believe this partnership will be a game-changer for the marketplace and will generate maximum revenue in Nevada and value for our shareholders,” he added.
The renowned pot-smoking duo Cheech Marin and Tommy Chong visit Planet 13’s Las Vegas entertainment complex in August last year. Photo via Planet 13 Holdings
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Planet 13 also owns the smaller Medizin dispensary in Las Vegas, operates the largest cannabis dispensary in California and plans to open a medical treatment centre in Florida. The company had a cash balance of US$40.5 million at the end of 2022 and no long-term debt.
Ovation secured a distribution agreement in Pennsylvania this May and an international supply agreement in the United Kingdom and Europe at the end of March. Ovation’s cash balance dropped immensely at the end of 2022 by 2,140 per cent year-over-year to $28,901.
The company’s shares are currently worth $0.025 on the Canadian Securities Exchange.
Planet 13 stock dropped by 4.7 per cent Tuesday to US$0.88 on the OTCQX market.
rowan@mugglehead.com
