Cannabis is a dynamic and rapidly growing sector with strong growth prospects. Countries like Canada, Germany, Norway, Thailand, Chile, Argentina, and Greece have legalised the use of medicinal cannabis, after recognizing its possible benefits in healing physical and mental illnesses. Australia had also joined forces in February 2016, and since then, Australia’s medicinal cannabis industry is burgeoning at a rapid rate catching tremendous attention from collaborators and investors. Various companies have become inclined towards manufacturing, production and export of cannabis products after the legalization for medicinal purpose.
Cannabis Legalization in Australia
In Australia, the cultivation of cannabis received green signal under the Narcotic Drugs Amendment Act in 2016 allowing the cannabis manufacturers to apply for a license to legally grow cannabis for medicinal use within Australia, while the overseas export of cannabis was legalised by the Government in January 2018.
Cannabis Approvals in Australia
Ever since the medicinal cannabis is legalised, the cannabis approvals have surged within Australia. The Therapeutic Goods Administration (TGA) recently published data on the number of new medical cannabis approvals which took place since June 2018. It has been reported that since the Federal Government legalised the cannabis for medicinal usage, more than 7700 approvals have been granted till May 2019.
By the end of 2025, it is anticipated that Australian Cannabis Industry would grow to a net worth of approximately $55 million.
Uses of Cannabis
Most common medicinal use of cannabis includes reduction in the chronic pain and muscle spasm, cure of critical illnesses like AIDS, cancer, PTSD, depression, epilepsy and seizures. Meanwhile, many clinical trials are underway to explore more potential benefits of medicinal cannabis.
In September 2019, several changes were proposed and listed in Australian Parliament with regards to the licensing that regulates cannabis associated business.
Recently, The Western Australian Government announced legislative changes to its prescription approvals procedure targeting patients’ easier access to medicinal cannabis. Medicinal cannabis prescriptions is anticipated to increase due to these legislative changes which will lead to possible potential price reduction.
Let us now have a look at Australia’s Leading ASX listed Cannabis Players.
ELIXINOL GLOBAL LIMITED (ASX: EXL)
Main Business: Cultivation and Manufacturing of medicinal cannabis products, selling wellness products, hemp food, and CBD dietary supplements- which are hemp derived.
Global Presence: Australia, Japan, Asia Pacific, United States, UK, Europe.
Listed: January 2018
Quarterly Update for Q3 FY2019 for the period ended on 30 September 2019
- Reported group revenue worth $9.6 million which represents-
- a normalised revenue growth of 12% on Q3 FY2018 of value $8.6 million
- a decline of 3% on Q2 FY2019 (the prior sequential period) amounting to $9.9m
- a decline of 9% on Q3 FY2018 valued $10.5 million.
- Additional product development prospects arising from EXL and PharmaCare collaboration
- An exclusive supply agreement worth a minimum US$18 million over 18 months with Pet Releaf
- Key appointments across sales, marketing, eCommerce and operations
Elixinol’s Future outlook is to diversify company’s branded product mix via a multi-channel sales approach.
As on 15 November 2019, EXL shares traded at $1.080, climbed 6.4%. The company has 137.89 million outstanding shares and a market capitalization of $139.96 million. The 52 weeks high of the stock was noted at $5.93, with an average volume of 535,039. The company generated a negative tear-to-date return of 62.27%.
Cann Group Limited (ASX: CAN)
Main Business: Cultivation and Manufacturing of medicinal cannabis products, recently implemented national distribution agreement with Symbion for moving into commercialisation stage with medicinal cannabis products that are being imported.
Global Presence: Australia, Canada.
Listed: May 2017
Update for Quarter Ended 30 September 2019
- With construction continues to be as schedules, CAN’s Mildura facility capacity increased by 40%.
- Annual revenues of value $220 million to $280 million is anticipated due to increased capacity based on cannabis dry flower.
- Facility construction is expected to complete in Q4 CY2020
- Secured manufacturing licence for already present facilities.
- Implemented new commercial opportunities.
- Imported products from Aurora Cannabis.
Cann Groups’ outlook is to continue to focus on Mildura facility construction, to establish 3rd party GMP product manufacturing capacity with IDT, allowing production of value-added formulations to be supplied to Australian patients as well as to Aurora, under the offtake agreement with that entity. The company also intends to remain focused on its commercial strategy with intended product delivery to Australian patients and participation in clinical studies.
As on 15 November 2019, CAN shares traded flat at $0.99. The company has 141.87 million outstanding shares and market capitalization stood at $140.45 million. The 52 weeks high of the stock was noted at $2.75, with an average volume of 368,710. The company generated a negative year-to-date return of 50.50%.
AusCann Group Holdings Ltd (ASX: AC8)
Main Business: Development, production and commercialisation of clinically validated cannabinoid medicines
Global Presence: Australia, Canada, United States, Chile
Listed: February 2017
Update for Quarter Ended 30 September 2019
- During the September quarter, AusCann held Investor Webinar to communicate its strategic and operational goals set for the forthcoming quarters that have already been set in motion.
- AusCann confirmed its that its market-leading hard-shell capsules are on track to be released for clinical trials by the end of 2019.
- Company’s product development and R&D facility is presently under construction phase which remains on budget and on schedule and is expected to be complete by the end of 2019.
- AusCann also underwent management changes and appointed renowned cannabinoid clinical research expert, Dr Marcel Bonn-Miller as a Non-Executive Director to its board.
AusCann’s strategic outlook is to deploy its capital to a place delivering the best yields in a progressively competitive new industry. In addition, its proprietary pharmaceutical product development underpinned by clinical evidence, will drive its future growth as the company plans to build medical acceptance
As on 15 November 2019, AC8 shares traded at $0.265, down 1.852%. The company has 317.05 million outstanding shares and market capitalization stood at $85.6 million. The 52 weeks high of the stock was noted at $0.85, with an average volume of 1,269,251. The company generated a negative year-to-date return of 57.14%.
Creso Pharma Limited (ASX: CPH)
Main Business: Development of pharmaceutical-grade cannabis
Global Presence: Canada, Srilanka, America, Switzerland, Australia, New Zealand, South America, Israel, Europe, Middle East, UK
Listed: October 2016
Update for Quarter Ended 30 September 2019
- Sale of nutraceutical product for 9 months to 30 September 2019 generated revenue of $1.136 million which is more than two-fold higher than the total revenues of FY 2018 amounting to $0.55 million.
- revenue from neutraceutical product sales is expected to go beyond $2 million for full year 2019 estimated, reflecting an increase by more than 260% on pcp.
- For 2020, 7 new products are scheduled to launch.
- CPH approached at its full capacity at Nova Scotia Mernova Facility.
- Facility’s processing amendment licence, that is recently acquired, would enable packaging of Mernova’s brand Ritual Green and preparation for the installation of extraction and value-added processing.
Australia and New Zealand
- For cannaQIX® 50, CPH secured first orders from Burleigh Heads Cannabis Limited.
- Distribution agreement signed with New Zealand-based cannabis company Medleaf Therapeutics signed.
As at 30 September 2019, cash on hand for the company was $3.726 million.
As on 15 November 2019, CAN shares traded at $0.205 with 151.54 million outstanding shares. The 52 weeks high of the stock was noted at $0.59, with an average volume of 206,558. The company generated a negative year-to-date return of 62.04%.
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