CANN Group Limited (ASX: CAN) is involved in the operations of breeding, cultivating and manufacturing medicinal cannabis with an objective of selling and using it globally and within Australia.
The company today, on 15th May 2019, announced that it has delivered a first Australian sourced and commercially grown cannabis resin to the Victorian Government so it can be used by the Australian patients. The group inked a contract with the Victorian Department of Health and Human Services for the supply of cannabis plant extract through the Office of Medicinal Cannabis during October 2018.
The cannabis plant extract or the resin is extracted from the dry cannabis flower, which is produced at the company’s unknown Southern Facility in Melbourne. As stated in the agreement with Agriculture Victoria, CANN will undertake the resin extraction process, which will use a supercritical CO2 extraction method to produce a whole plant extract. Eventually, the resin undergoes further development into a product formulation, which is suitable for patient use.
The CEO of the group, Peter Crock, said that the specifically designed grow rooms are used by CANN, where variables such as temperature, light and moisture are closely controlled. The company has completed 39 harvests at this facility, which continues to operate at full capacity.
Work in the new large-scale state-of-the-art cultivation facility of CANN near Mildura will start soon. It will have the capacity to produce up to 50,000 kilograms of dry flower per year when commissioned in 2020. Mr Crock stated that the company is pleased to be associated with the compassionate access scheme of the Victorian Government, which has an objective to improve the quality of life for young epilepsy patients.
The revenue generated from the resin delivery is a key milestone for CANN; the commercial terms of which have not been disclosed yet. The company will expand its distribution and sales activity through other Australian channels and look forward to export sales after the Mildura facility is commissioned in the third quarter of 2020.
The key partnerships of the company complement its in-house skills and capabilities, and it has a research collaboration agreement with CSIRO. The accelerated breeding program of CANN is underway with Agriculture Victoria. CANN is collaborating with the New South Wales Department of Primary Industries as an industry partner for the medicinal cannabis research program. Moreover, the group is a key commercial partner in the Australian Research Council funded La Trobe University Medicinal Agriculture Hub along with an ongoing collaboration with Aurora Cannabis Inc. and Anandia Labs.
On the price-performance front, at market close on 15th May 2019, the stock of CANN Group Limited was trading at $2.250, up 4.167% with a market capitalisation of $301.98 million. The stock has yielded a YTD return of 10.0% and exhibited returns of -16.98%, 14.58% and -14.40% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at $3.820 with a 52-week low price of $1.525 and an average trading volume of 403,054.