AusCann Group Holdings Ltd (ASX:AC8)
AC8 Stock Added to All Ordinaries: AusCann Group Holdings Ltdâs (
ASX: AC8) stock has risen 9.21% in the last one month as on April 11, 2019, after the companyâs stock has been added to All Ordinaries from March 18, 2019, according to the March 2019 Quarterly Rebalance of the S&P/ASX Indices. Meanwhile, AC8 is funded well for CY2019, as it reported cash of over $41m as at 31 December 2018. The company will release the first Australian cannabinoid pharmaceutical product to treat chronic pain for clinical trials during CY19. Moreover, for the first half of FY19, AC8 has reported 261% growth in the revenue to A$466,305, and the net loss declined by 8% to A$4,438,372. Further, AC8 has appointed Mr. Ido Kanyon, as the new Chief Executive Officer (CEO) of the company, who will join the company from 22nd May 2019. He is appointed as per the strategy to lead the company for the development of the manufacturing and sales business, as he had significant experience at Teva Pharmaceutical Industries for developing the product pipeline and commercialisation of the product.
On the stock performance front, the stock of AC8 at market close on 12 April 2019, was trading at $0.445, with a market cap of $128.29 million. The stock has generated a negative YTD return of 34.13%.
Cann Group Ltd. (ASX:CAN)
Expansion of the Production of Medicinal Cannabis: Cann Group Ltd. (
ASX: CAN) has signed a non-binding Heads of Agreement (HOA) for purchasing the site within the Mildura region in North West Victoria, for the construction of state-of-the-art greenhouse for the cultivation and production of medicinal cannabis in large scale to cater to both domestic and international markets. The new greenhouse facility planned in the Mildura region is projected to have a production capacity of about 50,000 kilograms of dry flower per annum and is planned to be commissioned fully in the third quarter of CY20. The cost of construction at this site, which is 34,000 square metre, is estimated to be approximately $130 million and the entire project will be funded through a mix of debt and equity.
Once the construction is completed, the project will form the largest medicinal cannabis production facility in Australia. The raw cannabis flower that the company will produce at the Mildura site will then be processed by the companyâs manufacturing contractor, IDT Australia (IDT) into downstream products, which will then be supplied to patients in Australian and for export outside. Meanwhile, CAN has also signed a five-year offtake agreement with Aurora Cannabis Inc. for the offtake of medicinal cannabis that will be produced by the company at its two existing manufacturing facilities and the new planned expansion facilities till the year 2024. CAN will supply the GMP processed dry flower, manufactured medicinal cannabis products and extracted resin till the year 2024 to Aurora as per this new offtake agreement. Aurora is currently holding an equity interest of 22.9% in CAN. CAN has additionally reiterated its previous guidance. The site, after fully operational, is projected to generate annual revenues in the range of approximately $160 million to $200 million from the increased production capacity. This estimate is based on the cannabis dry flowerâs current wholesale price.
Projected Expansion within the Mildura region (Source: Company Reports)
On the stock performance front, the stock of CAN at market close on 12 April 2019, was trading at a price of $2.260, down 1.31%, with a market cap of $319.92 million. The stock has generated a positive YTD return of 14.50%.
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