05/05/2017 - 14:11

AusCann shares jump on licence approval

05/05/2017 - 14:11

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Perth company AusCann Group Holdings has become the seventh applicant to gain regulatory approval to cultivate medicinal cannabis in Australia, with the news lifting its share price by 17 per cent today.

Mal Washer holds 2.1 million performance shares in AusCann.

Perth company AusCann Group Holdings has become the seventh applicant to gain regulatory approval to cultivate medicinal cannabis in Australia, with the news lifting its share price by 17 per cent today.

And AusCann could soon be joined by many other companies, with the Office of Drug Control currently evaluating about 40 applications.

The Office of Drug Control website disclosed that it was assessing 42 medicinal cannabis applications as at May 1.

In an update posted today, the federal government agency said it had issued seven licences to cultivate cannabis for medicinal use in humans.

In addition, it has issued three licences to cultivate cannabis for research purposes, and two further licences for manufacturing of medicinal cannabis products.

The website states that licence holders generally remain anonymous.

“The Office of Drug Control will not disclose details of individual licence holders, such as names and jurisdictions, unless approved to do so or unless the licensee makes a public statement announcing their participation,” the website states.

It noted that the location of licensed premises are not disclosed even where a licence holder makes a statement about their licence.

“We also do not identify to state level, as this information may be able to be used to identify a licence holder,” the website states.

The Office of Drug Control said that, as part of an interim supply solution while the domestic industry developed, the first bulk shipment of medicinal cannabis product was due to arrive in Australia at the beginning of May.

In a statement to the ASX today, AusCann managing director Elaine Darby said today the licence would enable AusCann to cultivate medicinal cannabis at its site in WA.

The company said it would import medicines from its Canadian partner Canopy Growth Corp to meet the immediate needs of Australian patients until its local supply commences.

Canopy is the largest producer of medical cannabis in North America.

The granting of the licence has triggered the vesting of 28.2 million performance shares and 2.8 million performance rights.

Upon vesting, each performance right and performance share will convert to one ordinary share.

With AusCann’s share price jumping 17 per cent to 68 cents today, the performance rights and performance shares collectively are worth $21 million.

The holders of performance shares include non-executive director Harry Karelis (2.5 million), chairman Mal Washer (2.1 million) and Ms Darby (1.9 million), while a further 4.4 million are held by Canpoy.

AusCann listed on the ASX in February after completing a $5 million capital raising at 20 cents per share.

Its stock hit a high of 89.5 cents in March before dipping to 56 cents last month.

It is one of more than a dozen ASX-listed companies targeted the medicinal cannabis market.

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