Nextleaf Solutions Ltd (CNSX: OILS) is skyrocketing on huge turnover of traded shares on securing a landmark patent for a proprietary cannabinoids extraction, refining, and distillation process. After a long period of consolidation, the stock has started breaking out in line with a bull trend that began in March.
CNSX: OILS Share Price Analysis
Investor’s reaction to the new patent does not come as a surprise given its potential impact in driving the company’s bottom line going forward. The fact that Nextleaf is the first public company to be issued with such a patent leaves it well positioned to enjoy the first mover advantage, in the extraction and purification of cannabinoids.
The stock has since broken out of the $0.32 to $0.45 trading range, amidst potential gains in line with the upward momentum in the broader cannabis sector. A violation of the $0.45 resistance level has opened the door for the stock to continue edging higher as a breakout play.
Pullbacks will have to contend with support at the $0.45 mark, a breach of which could result in the stock plunging back to the $0.32 trading range. Above the $0.32 mark, Nextleaf remains bullish and well positioned to continue edging higher.
Conversely, a violation of the $0.32 critical support level would leave the stock susceptible to further drops as part of an emerging bear trend.
Nextleaf is a company focused on the manufacturing and processing of cannabis extraction equipment. Its equipment portfolio includes a proprietary patented process for the production of cannabis distillate. The company also invests in intellectual property portfolio of methodologies of high-value extracts.
Why is Nextleaf Skyrocketing
Shares of Nextleaf have taken a flight on the company securing a patent for a proprietary extraction refinement and extraction process. The company’s patented technology enables the processing of low-quality dried cannabis biomass into high-purity distilled oil.
The patented process details a system whereby cannabis processers will be able to turn raw biomass or crude extract into refined high purity oil. The new system seeks to improve upon traditional extraction methods that rely on CO2 and ethanol to produce crude cannabis extracts.
The process also simplifies the manufacturing of differentiated cannabinoid formulations as well as delivery methods.
“Next leaf’s unique method of extracting and separating cannabinoids and terpenes makes it possible to purify and concentrate the desired compounds, which can be used for the manufacturing of a diverse array of products standardized for dose,” Nextleaf in a statement.
Strengthening IP Portfolio
In addition to the U.S patent, the Australian Government agency for Intellectual Property Rights has also issued the company a standard patent for a unique industrial-scale process of producing purified cannabinoid distillate.
The company has also made patent applications in Canada, Europe, Colombia, and Jamaica. The patent filling is part of the company’s strategy of protecting and developing its IP in relation to the production of innovative cannabinoid-based products.
“Nextleaf Solutions has succeeded in beating big Pharma, big tobacco, big alcohol, and every single billion-dollar cannabis company to the first issued patent for the extraction and purification of cannabinoids. We believe companies that can develop and protect valuable intellectual property will benefit substantially in the long-term, especially in an industry as young as the cannabis industry,” stated CEO Paul Pedersen.
Nextleaf has on its hand a protected and valuable proprietary process of extracting and refining cannabinoids. With the Federal government poised to legalize cannabis concentrates beverages as well as topical and vape pens in October, the company remains well positioned to generate significant value by licensing the technology to cannabis processors.
Demand for Cannabis products is on the rise, and the fact that the technology can be relied upon to produce high-quality extracts and concentrates means it will be a key driver of Nextleaf value going forward.
Nextleaf is already up in the second quarter signaling renewed investor interest in the stock. While price gains have coincided with an uptick in market sentiments, the stock is likely to continue powering higher.
For investors eyeing opportunities in the sector then Nextleaf is an exciting pick, as it remains well positioned to offer solid gains thanks to the validation of its cannabis extraction and purification system.
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Disclosure: We have no position in CNSX: OILS and have not been compensated for this article.