Althea won’t need to raise more cash soon
Health & Biotech
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One of the ASX’s newest pot stocks Althea (ASX:AGH) has enough money for its Victorian cannabis growing facility in the current cash kitty and a large marketing spend.
According to its first half year report, the company had $19.9m in cash and a term deposit at the end of December.
The company is planning an $11m facility in Skye, southern Melbourne for which it raised $19.6m in an IPO in September, leaving $9.5m for the company’s other activities. The quarterly spending rate is about $1.4m.
The project is currently tied up in planning red tape with the Frankston City Council, however.
When Stockhead spoke to CEO Josh Fegan at the start of February, he was non-committal around raising more money but did say they were looking “closely at” a capital raising this year.
Althea made a half year loss of $2.4m, but is among the rising number of pot stocks that have started making money.
It made $174,000 from sales in the six months to December.
Mr Fegan says their customers pay about $300 a month for product imported from major Althea shareholder Aphria, and new client numbers were rising by about five a day.
Althea sells house-branded product, brought in from Canada, via clinics in Australia and has plans to move into the UK.
It wants to build an initial 5000 sqm growing and drug manufacturing facility in southern Melbourne and be selling Australia-made products come the second half of calendar 2020 — if those planning approvals go their way.
The company is currently spending most of its budget on marketing — $864,000 — followed by administration costs at a close second, which in the half year came to $680,000.
Shares took a 2 per cent dip to 41c after the half year report was released.