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Transformative Moves in Harm Reduction Expanding Market Reach with New Partnerships and Acquisitions

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Safe Supply Streaming Co. Ltd (SPLY:CSE; SSPLF:OTCQB; QM4:FSE) recently announced significant developments within its portfolio company, Safety Strips, and a key acquisition. Learn more about how these strategic developments aim to enhance harm reduction efforts and expand market reach.

Safe Supply Streaming Co. Ltd (SPLY:CSE; SSPLF:OTCQB; QM4:FSE) recently announced significant developments within its portfolio company, Safety Strips Tech Corp., and a key acquisition. Safety Strips Tech Corp. has finalized a multiyear distribution agreement with Greenlane Holdings Inc. This move positions Greenlane Holdings Inc. as the exclusive distributor of Safety Strips' proprietary fentanyl and xylazine test strips across the United States. These test strips, which can detect trace amounts of fentanyl and its analogs, use a straightforward process to identify harmful substances in various forms. It also provides valuable harm-reduction tools as the opioid crisis continues.

Geoff Benic, CEO of Safety Strips, noted in the press release the growing demand for "dependable and economical substance testing methods that help prevent accidental overdoses and safeguard against drug-related crimes." With this agreement, Safe Supply aims to enhance its distribution channels and market presence.

In addition to this distribution partnership, Safe Supply has signed a definitive agreement to acquire 100% of the shares of Drug Lab 118 Ltd. (Drug Lab U.S.), a Delaware-based subsidiary of the U.K.-based Drug Lab parent company. Through this acquisition, Safe Supply strengthens its presence in the medical testing and harm reduction markets by incorporating Drug Lab U.S.'s advanced portfolio of proprietary narcotic and substance detection kits. The agreement includes issuing 10 million common shares to the Drug Lab parent at a deemed price of five cents per share, with contractual resale restrictions. The Drug Lab parent will also nominate a member to Safe Supply's board. As part of this transaction, an additional 1 million shares will be issued as a finder's fee to a third-party facilitator. The acquisition aligns with Safe Supply's strategic expansion in the North American market, offering solutions that address pressing public health risks from toxic substances, especially in schools and public venues. The transaction is expected to close shortly, pending all closing conditions.

Emerging Threats and Innovative Responses in Harm Reduction

The sector dealing with drug contamination and harm reduction faced ongoing challenges as new high-potency synthetic opioids, such as nitazenes, emerged in various markets.

In a report by The Guardian from September, Claire Zagorski, a translational science PhD student at the University of Texas, explained that nitazenes were initially shelved after their development in the 1950s but have since been revived in illicit markets. These substances posed particular risks due to their extreme potency. Some nitazenes are "roughly 40 times more active than fentanyl," as noted by Christophe Stove, a toxicology professor at Ghent University. Stove highlighted the risks associated with these synthetic opioids, particularly when unintentional overdoses occurred due to improper mixing.

Harm reduction efforts have increased in response, with test strips serving as one cost-effective solution for users to detect potentially harmful substances in their drug supply. However, current fentanyl test strips could not detect nitazenes. This creates gaps in safety that companies and researchers seek to fill. Stove's team, working at an "urgent pace," tested new nitazene strips for effectiveness, concluding they could generally detect certain nitazenes, though limitations remained.

Stove clarified, "If you don't get a positive result, it doesn't mean that the drug is safe," emphasizing the importance of using these tools with caution.

The October 30 report by DYNUZ also examined the evolving approach to harm reduction in the face of such risks. Overdrive Defense, a company newly focused on creating accessible safety tools for recreational users, marketed products that checked for fentanyl contamination and drink spiking. These tools were designed to be as approachable as possible, according to company statements, to appeal to a broader range of users who might otherwise avoid or stigmatize traditional harm reduction methods.

The latest Global State of Harm Reduction report in 2024 identified global advancements in harm reduction services but noted significant challenges. These include underfunding, criminalization, and limited service availability. As of this year, 93 countries offered needle and syringe programs (NSPs), and opioid agonist therapy (OAT) programs expanded to 94 countries. The report emphasized disparities in harm reduction access, especially for vulnerable groups such as youth, Indigenous populations, and individuals in prison. Furthermore, a 2022 funding study found only $151 million allocated to harm reduction in low- and middle-income countries. This is a mere 6% of the $2.7 billion required annually by 2025 and represents a 94% funding gap in the sector.

Efforts in the United States highlighted the lifesaving potential of fentanyl test strips, which could detect trace amounts of fentanyl in illicit drugs. According to a 2019 report by 90.5 WESA, public health workers advocated for the legalization of these strips to prevent accidental overdoses. Dave Lettrich, executive director of Bridge to the Mountains, emphasized that legalizing test strips in states where they were classified as “drug paraphernalia” could save lives. Mike Krafick, a recovery specialist with the Armstrong-Clarion-Indiana Drug and Alcohol Commission, noted that test strips could reach individuals who may not seek formal treatment services, providing an accessible harm reduction tool.

Federal support for fentanyl test strips increased in 2021, with the Centers for Disease Control and Prevention (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA) announcing that federal grants could now be used to purchase these tools. Acting Assistant Secretary Tom Coderre stated that this shift represented “a major step forward” in overdose prevention. CDC Director Rochelle Walensky further noted the urgency, citing fentanyl-related overdose deaths as a “public health crisis” demanding immediate action.

As per a report from Precedence Research, there is a $1.7 billion annual opportunity in the region for harm-reduction products, including medically tested supplies. The projected U.S. market growth for fentanyl test strips is predicted to reach US$6.77 billion by 2027 and a global market growth to US$12.64 billion by 2030. Safe Supply noted that, with over 1.22 million deaths from opioid overdoses in the last decade, the need for harm reduction and overdose prevention tools remained critical across North America.

Factors Driving Safe Supply

According to the company's investor presentation, Safe Supply Streaming Co. Ltd. identifies multiple catalysts that position the company for growth. The recent distribution agreement with Greenlane for Safety Strips' products establishes a robust U.S. presence, allowing Safe Supply to tap into expanding demand for harm reduction tools amidst the opioid crisis.

Additionally, the acquisition of Drug Lab U.S. is expected to deepen Safe Supply's product portfolio and revenue potential. Drug Lab U.S. brings extensive research and development experience, enhancing Safe Supply's offerings in medical testing and narcotic detection technologies. This acquisition leverages advanced R&D investments from the Drug Lab parent, expanding Safe Supply's reach and fortifying its market share in North America. As outlined in the company's investor presentation, Safe Supply is strategically positioned to benefit from growth in the harm reduction market and is projected to be a significant contributor to the expanding global drug testing industry.

Ownership and Share Structure

streetwise book logoStreetwise Ownership Overview*

Safe Supply Streaming Co. Ltd (SPLY:CSE; SSPLF:OTCQB; QM4:FSE)

*Share Structure as of 3/11/2024

According to Reuters, Safe Supply Streaming has 73.92 million (73.92M) shares outstanding and 71.23M free float traded shares.

The company reported that over 50% of Safe Supply is with strategic investors and held by family offices and large shareholders. 

The rest is in retail.

Its market cap is CA$1.97M, and its trading range over the past 52 weeks is CA$0.015 to $0.020 per share.


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Important Disclosures:

1) James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.

2)  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

 

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