AusCann raises $33m for cannabis development

Joondalup-based medicinal cannabis hopeful AusCann Holdings has secured $33.4 million from local and North American institutions, with NYSE-listed marijuana play Canopy Growth Corporation upping its stake to 11.2 per cent.

The cash will be used to fund research on, and clinical studies of, cannabinoid pharmaceuticals, medical outreach overseas, expanding operations in Chile and in Australia, and for working capital.

Canopy, which has a market capitalisation of about $US 7 billion, increased its stake from 11 per cent, and remains AusCann’s biggest shareholder.

The raising was at $1.10 per share, a 11.2 per cent discount to the stock’s 15-day weighted average price.

It was the 14th biggest equity market deal in Western Australia so far this year, according to the BNiQ Search Engine.

Canaccord Genuity acted as lead manager.

A further $8 million share placement plan for existing shareholders will soon get under way, the company said.

AusCann managing director Elaine Darby said the capital would accelerate the company’s objectives and help supply both local and international markets with cost-effective cannabis products.

The raising follows the business signing research agreements with Canadian business Jade Cannabis and a manufacturing and cultivation agreement with Tasmanian Alkaloids, formerly part of Johnson & Johnson.

Shares in Auscann fell 7 per cent to $1.19 at the time of writing.