Although Australia’s cannabis industry is relatively nascent, Australian cannabis stocks have already begun to ramp up activities through acquisitions, higher investments in R&D and fundraising to accelerate the growth. We are discussing a few cannabis stocks here from this perspective.
Creso Pharma Limited (ASX: CPH)
Creso Pharma Limited (ASX: CPH) is engaged in the business of developing cannabis as well as hemp-derived nutraceutical, therapeutic, and lifestyle products for the human health. The company holds the rights for unique, innovative proprietary delivery technologies, which will magnify the bioavailability and absorption of cannabinoids for CPH. The company recently announced that it has signed an exclusive Distribution Agreement with Burleigh Heads Cannabis. The agreement will lead Creso to expand geographically for the distribution of its therapeutic medicinal cannabis products into Australia.
Creso recently raised $3 million via a placement to institutional and sophisticated investors in late January. Funds were raised with the purpose to support the sales and marketing of CBD-based products in Europe and Canada and to accelerate Creso’s cannabis cultivation and production at the Mernova facility.
The stock of CPH is currently trading at $0.475, with a market cap of $61.52 million as on May 9, 2019.
Elixinol Global Limited (ASX: EXL)
Elixinol Global Limited (ASX: EXL), a global company operating in the industrial hemp, dietary supplements and emerging medicinal cannabis sectors, recently announced the update about its wholly-owned subsidiary, Colorado-based Elixinol LLC (Elixinol) to acquire 25% of equity interest in Altmed Pets LLC (Pet Releaf). As per the agreement, Elixinol will invest in the CBD (high-growth cannabidiol) pet products market. For this purpose, as on 24th April 2019, EXL announced a placement of 523,437 ordinary shares as part of the consideration to acquire 25.43% of Pet Releaf at $5.09 per fully paid in Elixinol.
A large chunk of received funds from Elixinol will be used by Pet Releaf to meet daily requirements in the form of working capital and to scale the business for expected continued growth. The fund will also be deployed for new product lines, key strategic hires and increased capacity in a new state-of-the-art 25,000 sq. ft production facility.
The stock is currently trading at $4.890, with a market capitalisation of $611.61 million as on May 9, 2019.
THC Global Group Limited (ASX: THC)
THC Global Group Limited (ASX: THC) is engaged in the business under a ‘Farm to Pharma’ pharmaceutical model, with delivering high-quality medicinal cannabis products. The company recently updated the closure of Share Purchase Plan (SPP) conducted in April 2019 and confirmed that it has raised the final amount of $2,983,500 from a total of 545 applicants.
The company provided an update on its activities and Appendix 4C for Q1 FY19. The Hydroponics equipment division of the company in Q1 2019, reported a revenue of $991,000 with 22% growth over Q4 2018, on the back of stronger sales within certain product lines and broader distribution network across key markets. Cash receipts from customers in Q1 2019 increased by 30% as compared to the last quarter to $843,000.
Stock of THC is currently trading at $0.425, with a market cap of $57.27 million as on May 9, 2019.
Ecofibre Limited (ASX: EOF)
Ecofibre Limited (ASX: EOF) admitted to the Official List of the ASX on 28th March 2019, and Official Quotation of its securities commenced on 29th March 2019. Ecofibre comprises three businesses; (1) Ananda Health (2) Ananda Food (3) Hemp Black. The company recently provided 4C Discussion and Outlook. According to that, the company recorded an unaudited consolidated revenue of $10.1 million in Q3 FY19, primarily driven by the Ananda Health business. Cash outflows for R&D are primarily related to Hemp Black, representing payment of 18 months accrued research costs for TJU (Thomas Jefferson University). The management expects FY19 to witness a small profit, following a loss of $8.7 million in FY18. The management also expects revenue for FY19 > 5.5x FY18 revenue, primarily driven by Ananda Health.
The stock is currently trading at $1.970, with a market cap of $618.7 million as on May 9, 2019.
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