Safe Supply Streaming Co. Ltd. (SPLY:CSE; SSPLF:OTCQB; QM4:FSE), with its portfolio company CannaLabs, ordered and is expecting imminent delivery of a legal supply of coca powder and liquid coca extract, noted a news release.
"Our dedication to securing a legal and safe supply chain for these products underscores our commitment to innovation, safety and the well-being of our customers," Safe Supply Streaming Chief Executive Officer Bill Panagiotakopoulos said in the release.
Demand is increasing for the coca plant (excluding cocaine) for use in nutraceuticals and pharmaceuticals, one part of the current movement to address the current crisis of unregulated toxic drug deaths. Another component is providing prescribed or regulated medications as a safer alternative to illegal drugs, also known as "safer supply," as defined on the Canadian government's website.
Safe Supply Streaming and CannaLabs' recent order was for 10 kilograms of spray-dried coca powder and 10 liters of liquid coca extract. It was placed with government-owned and -operated Empresa Nacional de la Coca (ENACO) in Peru, the world's primary legal supplier of coca products.
"As regulations evolve, this shipment underscores Safe Supply's potential for significant future revenue growth, positioning the company at the leading edge of an expanding market with pent-up consumer demand and regulatory acceptance," the release indicated.
In other news, the company's Board approved the granting of 250,000 stock options to Jack Bensimon, a newly appointed director. The options may be exercised at CA$0.12 apiece within a three-year period.
Helping Address the Toxic Drug Epidemic
Headquartered in Ontario, Canada and led by pioneers in the cannabis and psychedelics industries, Safe Supply Streaming is a venture capital firm investing in companies involved in the safe supply ecosystem. Its portfolio company CannaLabs, for instance, provides analytical testing of cannabis, nutraceutical and pharmaceutical products.
Safe Supply Streaming is the first mover in the safe supply sector, management said. It is looking to deploy capital into additional companies, and already has a proprietary pipeline of ones from which to choose. Early stage, these prospects boast strong management teams and well-designed business strategies.
Sector Encompasses Multiple Markets
Canada and the U.S. are both experiencing a continuing rise in toxic drug deaths.
Canada, between January and June 2023, had 40,642 opioid toxicity deaths, about 22 per day, according to the national Health InfoBase. This reflects a 5% year over year increase.
The U.S., from September 2022 to September 2023, saw its highest overdose death rate in a 12-month period, at an estimated 111,380, roughly 305 per day, Centers for Disease Control and Prevention data show.
Three-quarter or more of these fatalities are from nonpharmaceutical opioids.
These statistics, Supply Streaming company said, equate to a total addressable safe supply market of about US$360 billion (US$360B).
As for specific markets within the safe supply ecosystem, the market for products containing the coca plant, according to the company, are US$372B for pharmaceuticals, US$275B for functional foods and US$50B for energy drinks.
Point-of-care fentanyl test kits, another safe supply market, is expected to exceed US$180.9 million (US$180.9M) in the U.S. by 2033, up 72% from US$105.4M in 2023, according to Future Market Insights.
The Catalyst: More Capital Investments
In the coming months, Safe Supply Streaming expects to deploy capital into additional companies in the safe supply ecosystem.
"Our planned initial investments have significant near-term upside potential with accelerated liquidity paths," the company said.
Management also noted that while the investments will be relatively small in cash value, they will have "significant torque." This is because the companies invested in are poised for material growth and Safe Supply Streaming, in its role as adviser, likely will garner fee-for-service equity at an attractive valuation.
Ownership and Share Structure
According to Reuters, Safe Supply Streaming has 73.92 million (73.92M) shares outstanding and 71.23M free float traded shares.
The company has a total of eight insider investors, and together they own 3.66% of the company, or 2.69M shares. In order of most to least shares held, the Top 5 are Jonathan Goldman with 1.6% or 1.18M shares, Safe Supply CEO and Director Bill Panagiotakopoulos with 1.19% or 0.88M shares, Alexander Somjen with 0.27% or 0.2M shares and Kelvin Wah Chin Lee with 0.2% or 0.15M shares.
Retail investors hold the remaining 96.35% of shares.
Safe Supply has a market cap of CA$9.92M, Reuters reports.
"Our current valuation is only slightly higher than our cash value, which basically puts zero value on the optionality that we have as a company," it said.
Its 52-week trading range is CA$0.07–0.37 per share.
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