Invent a better mousetrap and the world will beat a path to your door. So says the old adage.
If you were to reinvent that adage for the modern day as it applies to marijuana, inventing a better breathalyzer, one that detects marijuana use, just in time for what could be North America’s switch to recreational marijuana acceptance, would be a lucrative option.
That’s what West Point Resources (CSE:C.BLO, Stock Forum) is hoping for.
The recently re-listed company, which jumped from the Venture Exchange to the welcoming arms of the CSE last Thursday, sports a new ticker symbol and an agreement with Cannabix to hold the North American license to what could be an important piece of IP in the next few years.
The Ticker Symbol is C.BLO, which makes sense when you know what Cannabix makes.
West Point claims the Cannabix Breathalyzer fixes a big problem for law enforcement, as well as many employers across North America, in that it provides a breath-testing system with immediate feedback as to whether a user has consumed marijuana in the last two hours.
Current tools detect marijuana use within the last three days – not an exact science to be sure, and inexact sciences make for bad evidence in court.
Kal Malhi is a retired RCMP officer with an extensive law enforcement background in going after marijuana sellers and producers. He's now moved on to develop the marijuana breathalyzer based on technology from Karolinska University in Sweden, in collaboration with a U.S. based toxicology expert and a Vancouver biomedical engineer. The result, he says, will change everything.
Driving while high will now be something you can be busted on.
Now, I know a lot of you out there who like to get a little buzzed will be looking at the West Point product and thinking, screw you guys. But let's get a little real for a second – assuming Justin Trudeau becomes Prime Minister and Canada becomes the free republic of stonerdom, do you really want 4 million Dorito-distracted James Franco's driving the streets?
To put it another way: Someone had to do it. Might as well buy stock in the guys that did, right?
Though he's at the helm of a 'marijuana sector' company, Mahli sees this product as a natural extension of his life's work in policing.
“There is a general sense that to get high and drive is not as big of a risk because you’re not likely to get caught and charged criminally” he says. “If you do get caught, you might get towed, get a 24 hour drivers licence suspension, but that’s the extent. And that’s largely the truth. There aren’t a lot of criminal code charges being forwarded for marijuana-impaired driving, because when they deal with that situation, there isn’t an effective tool capable of collecting evidence to support criminal charges. For the most part, police try to forward criminal charges based on opinions and observations of officers but judges don’t take opinions and observations as fact.”
Malhi’s product provides that tool law enforcement has been hoping for and, to be honest, it's surprising that it has taken so long for one to come along.
'Drugged driving' is become a major issue, according to the US National Institute on Drug Abuse’s website. A 2012 National Survey on Drug Use and Health shows an estimated 10.3 million people aged 12 or older (or 3.9% of adolescents and adults) reported driving under the influence of illicit drugs during the year prior. Furthermore, according to the National Highway Traffic Safety Administration’s 2007 National Roadside Survey, more than 16% of weekend, night time drivers tested positive for illegal, prescription, or over-the-counter drugs. More than 11% tested positive for illicit drugs.
Malhi says the Cannabix Breathalyzer system will bolster an officer’s ability to gather scientific based evidence confirming his or her observations. This extra level of confirmation makes any ensuing court case much more likely to succeed and result in convictions.
“Drug testing is currently available to law enforcement but usually based on saliva and/or urine, and both of those methods are not suitable for roadside use,” Mahli says. “Convenience is one thing; saliva testing gives a history of use as far back as 72 hours, so if the suspect used marijuana three days ago, that would bring a positive result. But that doesn’t mean the person was high when tested, just that they’d been high at some point in that time frame.”
West Point’s breathalyzer takes THC samples from the lungs, and Malhi says they only stay in the system for two hours, so the Cannabix Breathalyzer would only result in positive tests if a driver had used marihuana within that time.
“This allows the officer to say, 'we gathered our field observations and evidence and formed the opinion the driver was impaired. Once we administered the marijuana breath test, the driver was proven to have used marijuana within two hours from the time he was driving.'”
“The only way to get the level of THC now is through a blood test, and police don’t have those resources unless something very serious happens. Many states in the US are going to zero tolerance - if you have weed in your system, you’re deemed to be impaired by marijuana. Australia as well; they’re charging people based on a saliva test and telling people if they’ve smoked inside three days they’re in trouble. In serious cases, police will get warrants and blood tests, but those cases have to be very extreme.”
While the object of the West Point product is to give law enforcement more evidence to support charges, there's a larger potential market for the product which doesn’t involve law enforcement at all.
Imagine, if you will, that the US federal government allows recreational marijuana use at some point in the next few years. When that happens, how does a construction site foreman ensure their employees aren’t turning up stoned? How will oil rig managers ensure that their operators are coming on to shift sober and not high on marijuana? Long haul trucking companies will need it, banks and brokers will need it – heck - the police will need it to police themselves.
A little weed to calm the nerves before that brain surgery you’re about to perform? Don’t think so, Doctor Feelgood. Blow into this little tube before you scrub.
Need a little purple head explosion kush rush before you take the wheel of the company forex fund, Bobby Broker? Maybe you better back away from the infuser lest Maureen from HR ask you to blow a clean reading first.
Current workplace marijuana testing is imperfect for daily use, being as it requires urine testing, which features a long delay time and provides positive results even if the user has used marijuana over 72 hours prior to time of test.
“Urine tests will show you’ve used,” says Malhi, “but not whether you’re sober enough to start a shift.
The Cannabix Breathalyzer would provide a time line of a two hour window for positive results after marijuana use, thus providing results which correlate to the time of the test and time of employment of an employee.
In addition, the path to getting the product introduced into workplace use is a shorter one, being as it won’t require government trials, testing, procurement processes and bureaucracy or legal certification.
West Point is working hard to fast track the development and acceptance of it marijuana breathalyzer as it has developed relationships various U.S. agencies for trial testing.
“In the US they have the National Highway Traffic Safety Authority, so we’d have to go through them. We are developing our prototypes and plan to do clinical trials, which we have scheduled over the next six to nine months, or sooner, says Mahli.
West Point recently closed a private placement for over $750K and Malhi doesn’t necessarily believe he’ll need to come back to the market for more financing anytime soon.
West Point is singularly focused on this business model. Malhi says he’s resisting the temptation to get other products in the queue, preferring to push all his efforts into marijuana breathalyzer that he says will be in high demand, with no natural competitors. The company is planning collaboration with several industry players, State regulators and public advocacy groups to advance the product as quickly as possible.
“There are breath testers out there, but nobody has done this with THC breath testing. This is a relatively new technology and we’ve pulled together an exceptional team of doctors, engineers, public company people and my background in law enforcement and honestly believe it’s going to be the best tool for testing marihuana impaired drivers in North America. Our goal is to execute our plan, and be first to market, and it’s a big market. As for any competitors who try to work on similar technology, “We have a broad patent application in place, so they’d be infringing on our patent. If someone wants to come in and do what we do, we’ve patented the technology to make it unique to law enforcement,” Malhi says.
West Point has already demonstrated a hefty return to early investors, with a $0.05 trade halt turning in to a $0.21 trade resumption in the past week.
With a good share structure (38m shares outstanding as of the time of writing) and a low market cap ($7m), there’s certainly still room for more growth.
And Malhi points out his competitors in the MMJ aren’t exactly all showing high upside.
“Compared to some of these guys taking on grow deals, our structure on this deal, with no cash payments going out, and a projected cost of prototype of around $400k – stand that next to the grow deals valued at $20m or $30m that don’t even have a license yet. I don’t know how they’ll sustain those market caps. A lot of the 'growers’ in the marijuana space will take 2-3 years to get their licenses and growing perfected to a point of becoming profitable. We believe we can develop our device in a similar, if not shorter, time frame.”
“In our space, there’s only one company doing this – us – and it’s a worldwide need that won’t go away.”
While West Point doesn’t believe they’re at risk of being overtaken by a competitor, there are some potential acquirers in the law enforcement tool business.
“Once the technology is further developed, I believe the larger players in the law enforcement space would definitely be interested,” he says.
When I ask this ex-cop how comfortable he is being involved in the marijuana sector, he says he's not. In his opinion, West Point is a medical device company focused on marijuana detection, not a medical marijuana stock.
And if that means some investors will steer clear and stay on the hunt for daytrading gains, that’ll be fine by him.
“The potential market for a marijuana breathalyzer is many fold larger than what a factory could produce by growing plants through an MMPR license,” he says. “We just want to keep cash burn low and work toward the end goal where we commit all of our resources to develop this product that is in demand at a time when we are experiencing sweeping change in attitudes towards marijuana.”
“We are just starting out of the gate and I am confident that our market valuation can grow as we develop the product and our story becomes known. Our capital structure is tight and we have strategic investors who believe in the product and will be with us through the development phase. We expect good news flow and milestones to be hit regularly.”
So with all that, does the product work? West Point says it does, and expects to have news on trials going forward.
Certainly in a market where legitimacy is often lacking, the founders' law enforcement chops here make for a nice change, and there's no doubt this technology needs to be ready by the time recreational marijuana use becomes an accepted fact.
Don't hate them for ruining the party. Applaud them for getting off the line first.
@ChrisParry on Twitter
FULL DISCLOSURE: West Point Resources has paid a fee for the distribution and placement of this article through the Stockhouse marketing network. The author was not paid by West Point Resources for the creation of the story and owns no West Point Resources stock, in accordance with Stockhouse’s conflict of interest rules and his own journalistic integrity. West Point Resources was not given the right to dictate, alter, edit, suggest changes to or write any of the document before it was released, though the document was seen by West Point Resources management prior to distribution for fact-checking purposes and compliance. Do your own due diligence, and don’t get high on your own supply.