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Where pot meets police, a different kind of marijuana stock

Vancouver-based Cannabix, a penny stock that trades on the Canadian Securities Exchange, claims to be the only Canadian publicly listed company with a breathalyzer prototype that aims to detect THC, or tetrahydrocannabinol, a substance that gives marijuana its intoxicating effect.

Cannabix Technologies Inc.

Cannabix Technologies Inc. is hoping to capitalize on Ottawa's plans to crack down on drivers impaired by marijuana with the development of a roadside breathalyzer that would detect traces of the drug.

Vancouver-based Cannabix, a penny stock that trades on the Canadian Securities Exchange, claims to be the only Canadian publicly listed company with a breathalyzer prototype that aims to detect THC, or tetrahydrocannabinol, a substance that gives marijuana its intoxicating effect.

"Cannabix is working as quickly as possible to commercialize its device due to the growing demand," said chief executive officer Rav Mlait. He cites police forces as potential customers, as well as companies looking to test employees at work where intoxication can be dangerous, including people who drive or operate heavy machinery.

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The Cannabix breathalyzer, founded by former RCMP officer Kal Malhi, is still in the scientific testing stage and the company is working on making the device more portable, similar to the size of an alcohol breathalyzer. It's now about the size of a hardcover book.

"We are designing and developing a product that can be durable, accurate and have repeatable results," Mr. Mlait said.

The company positions itself as a "first-mover" with its prototype and an alternative play for investors in the emerging marijuana sector.

Still, it's "high risk" for investors, says Michael Southern, an analyst at independent research company 5i Research.

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The stock is up about 200 per cent over the past year but has been volatile, trading between 19 cents and $1.10 over the past 12 months.

"With lofty growth expectations already built in, an industry setback could see investors who got in early quickly cool on these names, take gains, and leave the investor who is late to the party holding a stock with poor momentum," Mr. Southern said. "If you are debating getting in now, you have to understand the stock price already reflects the known potential of the industry –and where it goes from here is a speculative call."

Cannabix closed Thursday at 83 cents, down 1 per cent after being up more than 15 per cent to 97 cents on the same day Ottawa announced its long-awaited legislation to legalize marijuana for recreational use. The government also proposed major changes to impaired driving laws, including roadside saliva testing to detect drug-impaired drivers. The legislation also includes new offences for having certain levels of a drug in the blood within two hours of driving.

The proposed legislation doesn't mention drug breathalyzers, but Cannabix is hoping its technology will be proven and advance to a stage where it will be accepted by law enforcement, as well as employers looking to test THC levels of employees.

Cannabix says it's working on breath-testing devices that target recent use of THC within a two-hour period, "in contrast to saliva or urine testing for THC which can be invasive and take a considerable amount of time for laboratory analysis."

Mr. Mlait said existing cannabis detection methods based on blood, urine and saliva are flawed because they can detect THC "many days or even weeks after the last cannabis intake, making it difficult, if not impossible, to determine recent cannabis intake accurately."

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Mr. Mlait claims a breathalyzer is ideal for roadside testing, "since it provides immediate feedback and is already in use by law enforcement and is understood by the public as a non-invasive tool."

A spokesperson from Public Safety Canada said in an e-mail on Friday that saliva drug tests are "reliable in screening drivers for the presence of THC and some other impairing drugs." The spokesperson also said that "before a drug screener is approved for use by law enforcement, it would be evaluated against a set of rigorous evaluation standards to ensure it is suitable for use by police officers."

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