A look at Pot Stocks: CAN versus CGB

  • Dec 12, 2019 AEDT
  • Team Kalkine
A look at Pot Stocks: CAN versus CGB

In the global medical cannabis market scenario, Australian cannabis market is the fastest one growing in leaps and bounds. The use of cannabis as a pharmaceutical product for the therapy in severe medical conditions such as Alzheimer’s disease, cancer, arthritis, Parkinson’s disease, and other neurological conditions is projected to drive demand for marijuana for medicinal purpose in the upcoming years. The increasing disease burden of chronic pain in elders, increase the need for pain management therapies and hence, it is expected to boost the demand for medicinal marijuana.

The hemp plant produces more than 100 different types of cannabinoids with three main components Tetrahydrocannabinol (THC), Cannabidiol (CBD) and Cannabinol (CBN), which binds to the cannabinoid receptor of the endocannabinoid system, a neuromodulatory system responsible for the regulation of homeostasis.

The Narcotic Drugs Act 1967 allows the Office of Drug Control (ODC) to issue four types of licences;

  • Medicinal cannabis licence – This licence allows for the cultivation and production or both for supply to the manufacturing licence holder.
  • Cannabis research licence – The research licence allows for the cultivation and production or both of medicinal cannabis for research purposes.
  • Manufacture licence- This licence is for the development of medicines from the raw material.
  • Import licence – The import licence enables the import of narcotics under certain conditions.

In this article, we are discussing two ASX listed pot stocks with their recent developments- CAN, CGB

Cann Group Ltd (ASX: CAN)

An ASX listed company Cann Group Ltd (ASX: CAN) is into developing medicinal cannabis products for improving quality of life for Australian patients. The company cultivates, manufactures and sells medicinal cannabis in Australia as well as in other countries. Cann Group is working with the vision to be a leader in the development and supply of cannabis and medicinal cannabis products. Also, it was the first company in Australia to receive a licence and permit for the cultivation of medical marijuana from the Federal Government.

AGM presentation-

Cann Group updated the market with its Annual General Meeting (AGM) presentation on ASX, highlighted about the company, including the regulatory approvals.

Quick highlights from AGM are as follows-

  • Product development- Cann’s local & imported products are ready to launch in the market. For the domestic launch of locally manufactured products of Cann is expected in the first quarter of the calendar year 2020. Cann group and Symbion signed an agreement (Wholesale & distribution) to carry Cann’s full range of imported & locally manufactured products across Australia.

Cann and Aurora Cannabis Inc have a strong relationship, and first order from Aurora has been secured.

  • Regulatory approvals-
    • The company received manufacturing licences for the Southern & Northern facilities.
    • Cann Group has all the necessary licences for cultivation, production & manufacturing in addition to licences for import & export licences.
    • In May 2019, IDT Australia (pharmaceutical partner of cann) granted manufacturing licence.
    • In June 2019, Aurora receives import permit from Health Canada for cannabis cultivated by Cann.
    • Licence for the Mildura facility of cann is under process.

Change in Management-

On 9 December 2019, the company announced that Ms Geraldine Farrell had joined Cann Group’s management team as Company Secretary and Ms Reena Dahiya as Acting Chief Financial Officer (CFO) from 6 December 2019.

Mr Richard Baker, who was the earlier Company Secretary and Chief Financial Officer, have resigned from his role effective 6 December 2019, and both the new board members replaced him.

Cann Global Limited (ASX: CGB)

An ASX listed health care company, Cann Global Limited (ASX: CGB) is a medical cannabis company. Cann Global comprises of three separate divisions- medical cannabis manufacturing, medical cannabis research and all-natural foods. The company is working under the relevant legislation to make sure that the future in Medical Cannabis and Natural Foods would allow medical practitioners, patients, and consumers to gain access to the right information, as well as the most effective, sustainable and safest products.

Agreement for the IP rights to “Olivia’s Choice”

On 10 December 2019, the company announced an agreement to secure the exclusive rights to the Intellectual property (IP) of the unique medicinal cannabis formulations that have been used by Olivia Newton John in her stage 4 metastatic breast cancer.

These medicinal cannabis formulations are- XO 27 XP, ONJ 18 XP and ONJ XO, and are expected

to be distributed to the worldwide marketplace under the label of Cann Global.

All these uniquely developed, formulated medicinal cannabis formulations have been researched over the past six years by Olivia’s husband, John Easterling. Mr Easterling is world-renowned, plant-derived medical formulations expert and a non-executive director of Cann Global.

With the selling of Olivia's Choice across the Special Access Scheme in Australia, Cann Global anticipates the commencement of clinical trials using these formulas to be conducted with cancer patients.

Operational Updates of Cann Global-

The company provided a few updates regarding CGB’s operations of the business for three of its divisions.

On 8 January 2018, the company announced about the 50/50 joint venture (exclusive) agreement with Canntab Therapeutics Limited for Australian and World-wide distribution rights to a Pharmaceutical Grade Medical Cannabis Extended Release (XR) pill.

  • Cann Global mentioned that recently there had been positive developments regarding Cannabis Extended Release (XR) pill to Australia, and the company can report that after the approval from Health Canada in October, the tablets are now in a legal dosage form;
  • The Cann Global’s Markham facility is expected to be licensed for the production of tablets within 90 days (by March 2020) with a lead time of 120 days for blister pack orders with exports permitting;
  • Cann also mentioned that for the import of its new range of Cannabis oil Gel capsules for sale in the Asian and Australian markets, the company is under discussion with Canntab. The sale of Gel capsules is expected to start in January/February 2020.

Let us now discuss the stock performance of both the stocks-

On 12 December 2019 CAN’s stock was trading at $0.395, up by 2.597% (at AEST 3:16 PM), with a market capitalisation of $54.62 million. The stock has outstanding shares of 141.87 million on ASX. The stock has 52 weeks high and low price of $2.570 and $0.375, respectively.

CGB’s stock was trading flat at $0.015 on 12 December 2019, (at AEST 3:18 PM). With the market cap of nearly $47.43 million, its 52 weeks high and low price was $0.051 and $0.014, respectively. The company has outstanding shares of ~3.16 billion.


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