Executive Summary / Key Takeaways

• Cannabis Bioscience International Holdings ($CBIH) is strategically positioned across medical cannabis education, clinical trials, and CBD product development, aiming to capitalize on the rapidly expanding global cannabis market.
• The company's Alpha Research segment demonstrated robust revenue growth of over 41% in the last fiscal year, driven by increasing demand for clinical trial services, while its upcoming VitaCookies CBD product line and a strong intellectual property portfolio, including 10 utility patent applications for cannabinoid-based formulations, represent significant future growth catalysts.
• Despite operational advancements and a clear strategic roadmap, CBIH faces substantial financial challenges, including recurring losses, negative working capital, and a "going concern" qualification, necessitating significant capital infusion to achieve its ambitious profitability target for the fiscal year ending May 31, 2026.
• CBIH differentiates itself through an integrated approach combining specialized education, real-world therapeutic applications, and innovative CBD product formulations, aiming to carve out a niche against larger, more diversified competitors.
• Key factors for investors to monitor include the successful launch and market acceptance of VitaCookies, the company's ability to secure the required $2.5 million in additional funding, and the progression of its patent applications, all of which are critical to realizing its long-term growth and profitability objectives.

A Biotech Pivot in the Green Rush

Cannabis Bioscience International Holdings ($CBIH) is charting an ambitious course within the burgeoning medical cannabis and CBD sectors, transforming from its diverse corporate lineage into a focused bioscience entity. The company's strategic pivot, solidified by its name change in December 2022, positions it at the intersection of cannabis-related research, education, and product development. This strategy aims to leverage the significant market opportunity presented by the rapidly expanding global cannabis industry, which is projected to grow from approximately $27 billion in sales in 2022 to between $44 billion and $45 billion in 2025, and potentially reaching $87 billion by 2035.

CBIH's overarching strategy is to establish a prominent position in scientific research and biotechnology applied to medicinal cannabis, competing with larger industry players despite its comparatively lower capital, facilities, and manpower. This ambition is underpinned by three core business segments: Pharmacology University, Alpha Research Institute, and the nascent CBD Business. The company's historical journey, marked by several corporate identity shifts, now culminates in a clear focus on bioscientific innovation and market education, particularly in regions like the U.S. and Latin America.

Technological Edge: Nanoplatforms and Therapeutic Formulations

At the heart of CBIH's long-term growth strategy lies its commitment to technological differentiation and innovation. The company has actively built an intellectual property portfolio, including 12 U.S. trademarks and over 100 medical formulations for conditions such as menopause, PTSD, dysbiosis, depression, and Alzheimer's disease. A critical component of this strategy is its engagement in advanced research and development, particularly in cannabinoid-based compounds.

CBIH has filed 10 utility patent applications with the U.S. Patent and Trademark Office (USPTO) between October and November 2024. These applications cover a range of innovative cannabinoid-based compositions, formulations, and methods of treatment. For instance, the company has applied for patents on a method of treatment for pancreatic cancer (Application No. 18905,128), cannabinoid-based nanoplatform compositions and methods for treating breast cancer by inhibiting VEGF (Application No. 18918,386), and an integrative treatment for shingles (Application No. 18920,359). Further applications include cannabinoid-based nanoplatform compositions for treating knee osteoarthritis (Application No. 18922,127) and menopause (Application No. 18921,140), as well as advanced therapeutic compositions targeting the microbiota-gut-brain axis for depression management (Application No. 18929,972) and multiple sclerosis (Application No. 18942,512).

These technological initiatives are not merely theoretical; they aim to deliver tangible benefits. The focus on "nanoplatform compositions" and "nanoemulsion-based delivery systems" is designed to improve solubility, stability, targeted delivery, and overall bioavailability of therapeutic compounds, which could significantly enhance the efficacy and patient experience of future CBD products. This advanced formulation approach aims to create a "more refined, safe, and appealing product" compared to existing "stigmatized formats, such as cigarettes or gummies". For investors, this technological roadmap represents a potential competitive moat, offering the promise of higher average selling prices, lower manufacturing costs through optimized delivery, and a stronger market position in the therapeutic CBD space. However, it is important to note that there is no assurance that any of these patent applications will result in issued patents.

Competitive Landscape and Strategic Positioning

CBIH operates in a dynamic and highly competitive environment, facing both direct and indirect rivals. Direct competitors in the medical cannabis education and therapeutic services space include established players like Tilray Brands , Canopy Growth Corporation , and Aurora Cannabis (ACB), which often possess significantly larger financial resources and broader market reach. Green Flower also stands out as a direct competitor in cannabis education.

CBIH differentiates itself through an integrated approach. Its Pharmacology University Business, while not an accredited institution, focuses on specialized cannabis education and maintains close relationships with law enforcement agencies, a unique asset. The company believes its "amount and scope of its digital products exceed those offered by any of its competitors in cannabis-related education". This focus on comprehensive, multi-language online education and in-person seminars provides a distinct offering, particularly in emerging markets like Latin America.

In the clinical trials arena, the Alpha Research Business has a track record of conducting over 20 trials for major pharmaceutical companies and CROs. Its plan to conduct its own cannabinoid clinical trials as a sponsor positions it for direct product development, a strategic move to control its intellectual property and future product pipeline. The upcoming VitaCookies product line exemplifies CBIH's competitive strategy in the CBD market. By developing ten distinct therapeutic formulations in a "refined, safe, and appealing" cookie format, the company aims to stand apart from generic CBD offerings. This product-centric innovation, coupled with its patent applications, is intended to create a unique value proposition.

However, CBIH's smaller scale and financial position present vulnerabilities. Larger competitors like Tilray (TLRY) and Canopy Growth (CGC) benefit from extensive brand recognition, broader product portfolios, and more robust financial backing, which can lead to faster market share capture and greater resilience in volatile markets. While CBIH's niche focus allows for tailored educational content and specialized therapeutic services, its growth rates may be slower, and its profitability and cash flow generation could lag behind more diversified operations. The company's high customer concentration in its Alpha Research Business, with two customers accounting for 66.70% and 24.10% of gross revenue in the last fiscal year, also poses a risk.

Broader industry trends, such as the increasing demand for medical cannabis (projected to reach 5.70 million registered patients by 2030) and the rapid growth of the global CBD consumer health market (estimated at $20.90 billion in 2024 and projected to reach $34.66 billion in the U.S. by 2034), provide a favorable backdrop for CBIH's offerings. The expansion of the Texas Compassionate Use Act (TCUP) through Law HB 46, which adds chronic pain and other conditions, is a significant local tailwind for CBIH's planned VitaCookies launch and educational programs.

Financial Performance and Liquidity Challenges

CBIH's financial performance for the fiscal year ended May 31, 2025, reflects both progress in its core clinical trial business and persistent liquidity challenges. Total revenues increased to $303,022 from $248,841 in the prior year, primarily driven by a substantial $87,866 increase in clinical trial contracts, which reached $301,731. This represents an impressive growth rate of approximately 41.08% for the Alpha Research segment. However, revenues from cannabis-related educational classes and seminars declined significantly to $1,291 from $6,335, and consulting fees generated no revenue, down from $28,641 in the previous year.

Despite the revenue growth in its clinical trials, CBIH continues to operate at a loss. The operating loss decreased from $486,140 in the year ended May 31, 2024, to $421,365 in the year ended May 31, 2025, and the net loss improved to $548,820 from $651,345 in the prior year. These improvements were partly due to reduced officer compensation following an officer's death and a $21,429 reduction in rent expenses. The company also recorded a gain of $23,638 from debt forgiveness.

However, the company's liquidity position remains a significant concern. As of May 31, 2025, CBIH had only $12,952 in cash and cash equivalents, a negative working capital of $916,878, and an accumulated deficit of $5.88 million. Net cash used in operations for the year ended May 31, 2025, was $329,627. The independent auditing firm has expressed "substantial doubt" about CBIH's ability to continue as a going concern, highlighting the need for "substantial additional capital" to fund its business and repay debts.

Efforts to raise capital have faced hurdles. A public offering in the year ended May 31, 2024, aiming to raise $5.00 million, resulted in no shares being sold. The company currently does not intend to conduct another public offering until its common stock market price "increases substantially" and anticipates raising equity capital through private transactions, potentially at "substantial" discounts. CBIH estimates needing $2.00 million for capital requirements over the next two years, plus a $500,000 reserve for contingencies. The company also carries various debt obligations, including SBA loans and related-party financing, with several in default or arrears. Any future fundraising through equity or convertible securities could lead to "significant dilution" for existing stockholders.

Outlook, Guidance, and Risks

CBIH's management has set an ambitious forward-looking target, expecting to "become profitable in the year ending May 31, 2026, and beyond," contingent on successful fundraising and business execution. This profitability is largely predicated on the "imminent introduction of VitaCookies" and anticipated "substantial revenue and profits" from sales of VitaCookies and fees for classes and seminars related to Texas Law HB 46. The company also hopes to boost future revenue and profits through the introduction of "state-of-the-art nanotechnology products, including nanoemulsion-based delivery systems".

Despite this optimistic outlook, several risks could impede CBIH's path to profitability. The federal illegality of cannabis, classified as a Schedule I controlled substance, remains a significant regulatory overhang, even as states legalize its use. While federal enforcement against state-compliant companies has been limited, the U.S. government "retains the authority to do so, and therefore, the likelihood of any future adverse enforcement... remains uncertain". Furthermore, the FDA's stance that certain CBD products, particularly those marketed with therapeutic claims or as food/dietary supplements, may not be lawful under federal law, restricts CBIH's initial market for VitaCookies to within the State of Texas. This limits the immediate scalability and market reach of a key product.

Intellectual property protection is another critical area of risk; there is "no assurance can be given that any of these applications will result in the issuance of patents". The company also faces internal control weaknesses, with management concluding that its internal control over financial reporting was "not effective as of May 31, 2025," citing difficulties with complex transactions, lack of documented processes, and insufficient independent board oversight. Finally, the risk of key personnel attrition exists, as current executive compensation is "substantially lower than he could earn in an equivalent position at another company".

Conclusion

Cannabis Bioscience International Holdings ($CBIH) presents a compelling, albeit high-risk, investment narrative centered on its strategic focus on medical cannabis bioscience and innovative CBD product development. The company's Alpha Research segment demonstrates strong operational growth, and its robust intellectual property pipeline, particularly in nanotechnology-enhanced cannabinoid formulations, positions it for future differentiation in a rapidly expanding market. The imminent launch of VitaCookies in Texas, coupled with the expansion of the state's compassionate use program, offers a tangible near-term revenue catalyst.

However, CBIH's significant financial distress, characterized by recurring losses, negative working capital, and a "going concern" qualification, underscores the urgent need for substantial capital. The company's ability to secure the necessary $2.5 million in funding and effectively manage its debt obligations will be paramount to achieving its ambitious profitability target for the fiscal year ending May 31, 2026. Investors must weigh the promising technological advancements and market tailwinds against the considerable financial and regulatory hurdles, recognizing that successful execution of its fundraising and product commercialization strategies will be critical to unlocking CBIH's long-term value in the dynamic cannabis sector.