On February 25, 2016, The Australian Parliament passed a measure to legalize cannabis for medicinal use. The measure allows for Specialist Doctors to prescribe medicinal cannabis for their patients under authorized prescriber policies. Australia is yet another country that is following the cannabis legalization trend. And like all the other countries that have preceded it, cannabis legalization has resulted in opportunities for businesses to capitalize on providing a product that there has always been a demand for, but was illegal. AUSCANN GROUP HLDG NPV (OTCMKTS: ACNNF) is one of very few Australian Companies seeking to gain an advantage from the cannabis legalization trend now taking hold “Down Under.”
We’ll start with a little background on the company. AusCann is an Australian based company that was incorporated in September 2014 with the aim of producing and providing high quality, affordable and clinically validated cannabis medicines to patients. It is bringing together leading expertise and operations across all aspects of the medical cannabis value chain, beginning with cultivation and production, through to manufacture and distribution of products and has built a strong team of experts and partners across the globe.
AusCann is taking strategic steps to capitalize on Australia’s medical cannabis legalization. On May 19, 2017, the Company announced that it successfully raised $12 million (before capital raising costs) via a Private Placement to institutional and high net worth investors. The deal was managed by Merchant Corporate Advisory Pty Ltd, and garnered strong interest from existing and new investors, both domestically and overseas. The successful fund raising also serves to validate AusCann’s strategy as an Australian-based and globally connected player in the medicinal cannabis sector. The Company plans to use the proceeds to develop cultivation and manufacturing activities, and accelerating its medical outreach program.
On May 17, 2017, the company announced that it signed a Heads of Agreement to form an exclusive strategic partnership with Tasmanian Alkaloids Pty Ltd. Tasmanian Alkaloids, which is owned by the global private investment firm SK Capital Partners, and is one of the world’s largest manufacturers of controlled substances, producing alkaloid raw material grown in Tasmania. The partnership allows the parties to align their respective competencies in cultivating medicinal cannabis plants and to manufacture and distribute cannabis products within Australia, and internationally once regulations permit. Elaine Darby, Managing Director, AusCann commented:
“This partnership with Tasmanian Alkaloids significantly builds on our position within the Australian market as a leading medicinal cannabis company that intends to cultivate, manufacture and supply the Australian market with access to high quality medicinal cannabis products. Tasmanian Alkaloids are the perfect partner and strategic fit for AusCann given their expertise in the cultivation, manufacture and distribution of therapeutic pain products within Australia.”
Perhaps the most significant news with the greatest impact to AusCann was the announcement on May 5, 2017 that the Australian Office of Drug Control, under the Narcotic Drugs Act 1967, awarded AusCann a medicinal cannabis license. This makes AusCann one of a select few companies to be granted a license. The license enables AusCann to undertake medicinal cannabis cultivation operations within Australia. Elaine Darby, Managing Director, AusCann stated:
“This is a major milestone for AusCann and represents significant progress in our strategy to become a leading producer and supplier of high quality medicinal cannabis to Australian patients.”
AusCann is now well positioned to progress its strategy to become a leading supplier of Australian produced high quality, clinically validated and affordable medicinal cannabis.
ACNNF stock has only been trading publicly since early February 3, 2016. The stock closed at $.1750 on its first day of trading on the OTC market, and traded to a high of $.7450 on March 30, 2017. It has since retraced to $.3430 where it is trading now. Current market capitalization stands at $10.55 million, on 30.12 million shares outstanding as of May 25, 2017.
Sine the medicinal cannabis legalization took place, a ground swell of support for the legalization of recreational cannabis has begun in Australia. The cannabis legalization trend continues to follow the similar trend that is sweeping throughout North America. With ACNNF possessing a competitive advantage in Australia, AusCann looks to be a top pick for cannabis investors. We will be updating our subscribers as soon as we know more. For the latest updates on ACNNF, sign up below!
Disclosure: We have no position in ACNNF and have not been compensated for this article.