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Opportunity Abounds in Cannabinoid Topicals Market

Ryan Allway

April 21st, 2021

App, Exclusive, News, Top Story

Cannabis topicals, including both CBD and THC containing products, are one of the fastest growing segments of the industry. According to Million Insights, the CBD skincare market is projected to grow at a 32.9% CAGR between 2019 and 2025 to reach $1.7 billion. The steep growth in the sector has led to some level of consolidation as larger companies look to add topical products and technologies to their portfolio of offerings.

Deals from the last year or so include the August 2020 acquisition of Opticann, Inc. by Heritage Cannabis Holdings Corp. (CSE: CANN) (OTC: HERTF). Opticann offered a patented drug delivery system along with its suite of topical and oral CBD and CBG formulations. In February 2020 Abacus Health Products snapped up the Harmony Hemp brand of CBD-infused personal care products. Four months later, Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) acquired Abacus largely for its Harmony Hemp and CBD MEDIC™ topical product lines.

Topical cannabis products are in demand to be sure, and Ovation Science Inc. (CSE: OVAT) (OTCQB: OVATF) is an interesting company to consider in the space. Ovation creates topical (ingredients delivered to the skin) and transdermal (ingredients delivered through the skin without using a patch) products that deliver active ingredients at a significantly higher rate than is standard in the industry. Ovation has developed over thirty patented products to this point, and below we’ll take a look at what the company has and where it may be headed.

What Makes Invisicare® Different?

Ovation Science holds the worldwide exclusive rights to Invisicare® drug delivery technology within the cannabis industry. This delivery system is patented in 11 countries, including the US, Canada, Australia, and in key European and Asian markets. In addition, Ovation Science has applied in Canada and the USA for a patent covering the transdermal delivery of CBD and THC.  In its own research, the company found that the Invisicare® CBD formulations tested exhibited a 40% topical release compared to just 3% for market leading formulations after a two-hour period.

In addition, the company’s research found that transdermal formulas—designed to be absorbed through the skin to provide systemic effects—powered by Invisicare® had a greater than 80% penetration rate at six hours compared to 10% to 25% for market leading formulas. These improvements translate to more active ingredients delivered to target sites.

Invisicare® is backed by twenty years of research and development, led by Dr. James Roszell, PhD. ,Head of Product Development. Ovation has also assembled an impressive team for its Medical Dermatology Advisory Board to help guide the company with clinical, scientific, research, and strategic advice.  The Board is comprised of four distinguished dermatologists from Canada, the USA and the UK.   Invisicare® is not a quick solution to a new problem. Rather, the company has worked diligently to test and improve the system over time and has applied that knowledge and science to the topical cannabis industry.

Click here to learn more about investing in patented skincare technology

How is Invisicare® Sold?

Ovation’s revenue and marketing model consists of direct sales, licensing and royalty revenues. In the licensing world, the company has a licensee that sells Invisicare® powered products in Nevada. Ovation recently announced that January 2021 was its best month of sales in the state since February 2020, just prior to the pandemic shutdown. January sales in Nevada represented a 70% increase over the previous month, and Ovation is anticipating continued growth in the state while it seeks distribution and licensing deals with operators in other states.

For direct sales, Ovation features two online portals. InvibeMD targets the health and wellness sector, while ArloCBDBeauty is geared toward the beauty and cosmetics market. Both the licensing and direct revenue streams feature a very low cost of goods sold (COGS). Licensing revenues include product development fees, royalties, and the sale of Invisicare® polymers to licensees. None of these involve much overhead as most of the cost has already been realized in the product development phase. Meanwhile, Ovation’s online sales don’t depend on maintaining a physical storefront and feature large margins.

The executive team features over 75 years of combined pharmaceutical product development and marketing experience, headed by co-founders Terry Howlett and Doreen McMorran. Mr. Howlett, the President and CEO, has managed and launched public companies in the pharmaceutical and skincare industries over the past 35 years. Ms. McMorran, the COO, has 25+ years of experience selling and marketing dermatology products as well as extensive operational experience.

Why License Invisicare®?

Invisicare® provides a number of benefits to licensees seeking to create differentiated topical and transdermal products in their markets:

  • Greater therapeutic effect. The delivery of more cannabinoids may translate to a greater therapeutic effect. Consumers that have tried many products will naturally be more drawn to products that actually achieve desired effects. These dynamics could translate to greater customer retention and higher profit margins.
  • Lower production costs. Many high-quality cannabinoids are costly to produce—especially the lesser-known niche cannabinoids like CBC or THCA. Technologies that increase the bioavailability of cannabinoids enable producers to use fewer active ingredients to achieve the same results, which can help lower production costs.
  • Product differentiation. Most topical and transdermal products are produced using the same methodologies. Using Invisicare®, Ovation licensees can differentiate their products from others on the shelves with a scientifically proven benefit. These differentiations can help improve sales and support higher profit margins.

Click here to learn more about investing in patented skincare technology

Looking Ahead

Ovation Science Inc.’s (CSE: OVAT) (OTCQB: OVATF) Invisicare® is a breakthrough technology that has been in development for over 20 years and has been proven to improve the bioavailability of cannabinoids in both topical and transdermal applications. Next steps include driving revenue through both the online portals and through new agreements with licensees in more markets, duplicating its success in Nevada into the 37 other approved states plus internationally. With the large majority of states having legalized some form of cannabis, whether medical or recreational, there are plenty of lucrative target markets for the company. Keep an eye on Ovation as it executes on its plan to spread Invisicare®-based products far and wide.

For more information, visit the company’s website or download the investor presentation.

Disclaimer

The above article is sponsored content. CannabisFN.com and CFN Media, have been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://cannabisfn.com/legal-disclaimer/  

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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