The LSU AgCenter is betting the future of its medical marijuana business on a small Las Vegas company's ability to raise the cash needed for a plant growing and processing center.

GB Sciences Inc., selected last week from among seven proposals, plans to invest up to $6.5 million over the next two years to expand an existing office-and-warehouse building and set up operations, CEO John Poss said. Patients could get the first batch of medicines as early as January or as late as March. 

In order to accomplish that, the publicly traded company will have to attract more money from investors. Poss is confident the company can. Others are less so.

"If you look on their balance sheet, they don't have a lot of money … their public filings do not show them to be very cash rich at all," said Alan Brochstein, co-founder of 420 Investor.

GB Sciences is what is known as an over-the-counter stock. OTC companies are usually small and can't meet the listing requirements of stock exchanges. For example, Nasdaq requires a minimum share price of $1. GB Sciences closed Friday at 25 cents.

GB Sciences ended its third fiscal quarter Dec. 31, with $991,325 in cash but will owe $1.2 million over the next year, said Brochstein, a stock analyst who focuses on cannabis companies.

GB Sciences' most recent quarterly report included a note saying the company has lost $28.1 million since inception and burned through $2.8 million during the first nine months of the fiscal year. "These factors, among others, raise substantial doubt about the company's ability to continue as a going concern," the note says.

Those numbers also raise some doubt about whether GB Sciences will be able to absorb years of losses the AgCenter has projected for the medical marijuana business in Louisiana that the Legislature approved in 2015. The AgCenter estimates it could take four to nine years for revenue to catch up to expenses.

If GB Sciences can't make a go of it, LSU might have to repeat the vendor selection process, forcing patients to wait even longer for the cannabis-based medication.

So far, the company has been able to raise enough money from investors to cover its losses, and Poss believes GB Sciences will continue to do so.

The company recently raised $2.8 million, and Poss said GB Sciences has a commitment from investment bank Network Financial 1 to raise $6 million through a securities offering. The terms of the offering have not yet been announced.

Brochstein said the investment bank's commitment is likely nonbinding.

Still, he was impressed by GB Science winning the AgCenter competition and by the company's sixth-place finish among more than 40 candidates for a medical marijuana license in Texas. In both states, GB Sciences beat Columbia Care, a New York health care company with a very good reputation.

Those results give some validity to what GB Sciences is trying to do, Brochstein said.

In the past two years, GB Sciences changed its name from Growblox Sciences and redirected its focus from a device for which the company was named that offered a controlled indoor growing environment to research and grow cannabis. It also changed chief executive officer, from Craig Ellins to Poss.

"They really started off trying to be a science company that was focused on their growing technology," Brochstein said. "They had something called the Growblox. They really don't talk about that anymore."

The shift to research and cannabis sales is probably due to Poss, whose experience includes senior management roles with public and private companies with sales ranging from $10 million to $450 million.

What GB Sciences is really trying to do now is become a pharmaceutical company, Brochstein said. Unfortunately, GB Sciences is trying to go the medical route without a lot of financial strength, he said.

The company has interests in two medical marijuana dispensaries and a licensed cultivation center in Nevada. GB Sciences harvested its first crop in May and generated its first revenue. GB Sciences expects the center will eventually generate $10 million in annual sales. Those sales could get a big boost on July 1, when recreational sales of pot begin in Nevada.

But Brochstein said the cultivation center will have to undergo quite a bit of expansion to reach the revenue target. At present, marijuana sales aren't capable of supporting GB Sciences' research efforts.

"My hope for them is that their close call in Texas and their apparent win in Louisiana will help them to raise more money … not only for the Louisiana project but more importantly some of the other things the company is doing in intellectual property," Brochstein said.

The company has a number of patents or patent applications for treatments for a variety of ailments, including heart, Parkinson's, Alzheimer's, Crohn's, and Huntington's diseases, dementia, arthritis, inflammatory bowel disease and asthma.

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Under Louisiana's law, a limited number of illnesses can be treated with medical marijuana, including cancer, HIV and AIDS, cachexia or wasting syndrome, seizure disorders, epilepsy, spasticity, Crohn's disease, muscular dystrophy and multiple sclerosis.

The AgCenter announced Thursday that it had chosen GB Sciences from a field of seven potential vendors. The others were CB Medical LLC of Alexandria, Southern Roots Therapeutics of Baton Rouge, Columbia Care Louisiana LLC of New Roads, Citiva LA LLC of Mandeville; Fourrier House LLC of New Iberia; and Terah Holdings LLC of Shreveport.

LSU and AgCenter officials have said they cannot discuss the details of the proposals, although Agriculture College Dean Bill Richardson said the review panelists picked the best candidate. The LSU Board of Supervisors is expected to vote Thursday on GB Sciences.

In 2015, the Louisiana Legislature enacted a law allowing for the cultivation, production and use of medical marijuana, giving the task and licensing rights to the LSU AgCenter and Southern University Agricultural Center.

State law requires the medicine to be in a liquid, such as an oil or spray; capsules or pills; edible dosages; topical applications; trans-dermal patches; or suppositories.

Poss believes the company's research track record helped sway the AgCenter's decision.

"Realistically I think we're a little more advanced than others in the cannabis industry when it comes to research," Poss said.

In addition to its treatments, GB Science is also one of a few cannabis companies worldwide using tissue propagation to replicate its plants, Poss said.

The process involves placing small pieces of plants in nutrients to grow identical versions of plants with desirable traits.

"I think LSU sees an opportunity to help us commercialize that process," Poss said, "and perhaps another revenue stream offering tissue propagation services to the (cannabis) industry."

Jacob Irving, co-founder of Southern Roots Therapeutics, was disappointed the AgCenter picked an out-of-state company. Only Southern Roots is actually based in Louisiana, he said. The other applicants are based out of state and merely registered Louisiana corporations.

"While I think it's a shame that it's not going to a local team, I do think that Growblox is the best choice for Louisiana of the other foreign companies," Irving said.

John Barry, the head of Citiva Louisiana, said the reviewers apparently preferred a publicly traded company to a privately held startup. But he was encouraged by some of the evaluators' comments.

"Sometimes this stuff is never over. In two, three years, something may happen, and we're still in good standing with LSU," Barry said. "It all depends on what they want to do."

The five-year contract requires GB Sciences to pay the AgCenter $3.4 million, or 10 percent of gross sales, as well as a minimum of $500,000 a year in research funding. The AgCenter would retain 50 percent of the intellectual property rights resulting from the research.

Poss said the company is eager to work with LSU scientists and sees "immense opportunities" in both tissue propagation and developing novel plant strains.

GB Sciences must first finalize its banking arrangements with a Louisiana firm and negotiate a contract with LSU, Poss said. The process will take 30 days or so.

The company has already identified an office-warehouse site. It will take three to six months to add clean rooms — mobile home-sized structures likely to be built in Nevada — to grow the cannabis and an extraction area where the plants can be converted to oil, and the oil compounded and packaged into medicines.

GB Sciences expects to have plants in the ground before the end of the year, and medication to patients sometime between January and March.

The medical marijuana programs will be regulated by the Louisiana Department of Agriculture and Forestry, the Louisiana Board of Pharmacy and the Louisiana State Board of Medical Examiners.

The company's plans call for putting $300,000 into a nonprofit each year to educate Louisiana residents and doctors about what medical marijuana is, and the combinations of medicines that work for diseases, Poss said. This way doctors can have some basis for writing prescriptions.

"We feel like the key to success in Louisiana is educating physicians and patients on the benefits of cannabis, how it works, what the risks are, etc.," Poss said.

Follow Ted Griggs on Twitter, @tedgriggsbr.