Auscann Group Holdings (ASX:AC8) has welcomed Canada-based, world leading diversified cannabis company, Canopy Growth Corporation as a substantial shareholder.
Canopy Growth Corporation holds 23 million shares or 10.6% of the company and is the largest legal producer of medicinal cannabis in North America.
Auscann commenced trading on the ASX earlier this month after completing a successful reverse takeover of TW Holdings.
The company raised the maximum $5 million under its prospectus offering by issuing 25 million shares priced at $0.20.
AusCann has a focus on medical cannabis and is well positioned to take advantage of the developing market by bringing together a strong team with relevant and complementary skill sets.
The team also includes Chilean medicinal cannabis grower Fundación Daya.
AusCann has joined the Canopy family of companies and partners that includes Tweed (the most recognised cannabis production brand in the world), Bedrocan, DNA Genetics, Cann Science, Indoor Harvest and Mettrum Health Corp (following its recently announced CAD$430 million acquisition by Canopy).
Use of funds
Given the maximum of $5 million was raised in the prospectus offering, this provides Auscann with total cash of $8.3 million.
Funds are to be allocated as follows:
- Horticulture research and development: $1.8 million
- Chilean joint venture: $1.35 million
- Analytical testing: $0.33 million
- Clinical trials: $2.77 million
- Medical education: $0.33 million
- Licence applications and fees: $0.21 million
- Termination fee: $0.2 million
- Working capital and offer costs: $1.3 million
AusCann believes that patients have the right to high quality, economical and clinically validated cannabis medicines.
AusCann has the ability to deliver these medicines by:
- Having access to expertise and relevant intellectual property in respect of:
- Plant genetics and breeding;
- Cultivation and production techniques;
- Manufacturing techniques;
- Cannabis medicines that are currently being prescribed for patients for a range of conditions internationally;
- Undertaking clinical studies in Australia;
- Having the expertise to operate under Australia’s cultivation and manufacturing requirements; and
- Being able to supply full spectrum plant extracts.
The company’s business model is based upon developing production of medicinal cannabis and partnering with leading researchers.