Cann Group to get a boost from Australia’s new medical cannabis export policy
Cann Group Ltd (ASX:CAN) is expected to benefit from the Australian Federal Government’s decision to permit Australian producers of medicinal cannabis to export products to overseas markets.
The company’s shares are trading circa 15% higher intra-day, at $3.32.
The federal government has approved the exportation of medicinal cannabis in a bid to strengthen the supply amid growing demand domestically and worldwide.
Importantly, the decision to allow exports is expected to lead to further investment in the Australian industry and provide local companies with an incentive to accelerate their development plans.
Cann recently commissioned its second production facility, and is progressing plans to develop a 16,000 square metre cultivation, R&D and manufacturing facility as part of its phase III expansion.
The expanded capacity is aimed at serving the Australian market with a reliable supply of high quality, safe and innovative medicinal cannabis products.
Well funded for expansion plans
In December 2017, the company successfully completed a share placement to institutional, sophisticated and professional investors to raise $58.7 million at $2.50 per share.
Major shareholder Aurora Cannabis Inc (TSE:ACB) participated in the placement and committed to invest a total of up to circa $26 million to achieve a 22.9% shareholding.
Cann is now in a strong position to accelerate its plans to substantially expand cultivation capacity, to support additional clinical trial activity and to continue its product development.