Medicinal cannabis outfit Cann Group secures European export deal
Cann shares surge 16 per cent this week to $1.18 after two new agreements.
Medicinal cannabis outfit Cann Group has secured a European export deal and is looking to sell products to South America as it looks to scale up production and meet local legislative constraints on growth.
Cann shares have surged 16 per cent this week to $1.18 after it sealed two new agreements to export medicinal cannabis and dried flower products to the UK and Europe.
The company, which is currently building a factory in Mildura, needs export markets to fuel growth because under current Australian laws it cannot manufacture products speculatively and must show an end market for their use.
“For us the focus remains, and under the legislation, we are obliged to service Australian patients first,” chief executive Peter Crock told The Australian.
“But ... for us to efficiently service the Australian market, setting up at scale is important and that’s why having the export off-take allows us to cater for that supply.
“We are not allowed to grow speculatively. Under the Narcotic Drugs Act that’s where you have got to show you have a valid recipient for the product you are producing and you won’t be given a permit to cultivate until you can prove you have that connection… and beyond that patient demand and export demand.”
Cann signed its export agreement with Astral Health, a UK-based specialist importer and distributor of medicinal cannabis products. Cann will supply a range of formulated oils, including high THC, high CBD and a balanced formulation. The agreement also allows Cann to develop and supply Astral Health with additional products over time.
It signed a second agreement with Germany-based Iuvo Therapeutics to export medicinal cannabis oil formulations and dried flower products. Germany is Europe’s largest medicinal cannabis market with 2019 sales exceeding all other European markets combined.
Outside of Europe, Cann has its eyes on supplying medicinal cannabis to South America.
“We are looking at multiple markets around the world and leveraging Australia’s TGA (Therapeutic Goods Administration) GMP (Good Manufacturing Practice) standard as a reason for Australian product to be sought after.
“An interesting one that’s on the radar is Brazil. They have announced that they aren’t going to allow local production there. But it has to be GMP grade product that’s there.
“So that’s an example of one that we are considering.”
Despite securing access to the bigger European medicinal cannabis markets, Mr Crock said the Australian market will account for 80 per cent of Cann’s production. But he expected that percentage to change as the company ramps up production.
The coronavirus pandemic has halted construction on Cann’s factory in Mildura. The company had employed glasshouse technicians from The Netherlands, who have since returned to Europe during the pandemic.
Mr Crock said he expected to employ more local workers to finish the factory.
“We have been talking to state and federal governments about what we need to do to streamline and re-mobilise onsite up there (in Mildura) and I think we will end up using more local labour.
“But in terms of the technical expertise that we need to bring in from the Dutch, we will be engaging with the Major Projects Office in Canberra.
“We are using them as a single point of contact and they are working with us on our project to look at visas for skilled workers and getting that process cleared so we can get them back onsite and remobilise the project.”
More Coverage
Future Fund goes too soft keeping corporates in line
Not only is the $290bn fund reluctant to put real heat on listed companies, it is painfully late to the proxy party.
EDO’s secret communications revealed as Santos chases costs
The Environmental Defenders Office is set to hand more documents to Santos, as the company tries to identify who funded a failed bid to block part of its $5.7bn Barossa LNG development.