Cannabis play AusCann raises $33m for Chile pot plant
Health & Biotech
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One of Australia’s biggest pot stocks AusCann has added $33 million to the coffers through a share placement to major investors.
AusCann (ASX:AC8), which is worth $185 million, has issued 30.4 million new shares at $1.10.
The stock fell 9 per cent to $1.16 this morning before it recovered to $1.20 at midday.
Major shareholder Canopy upped its stake from 10 per cent to 11.2 per cent in the placement. Canopy is Canada’s biggest cannabis company and AusCann’s biggest shareholder.
And there could be more cash to come. AusCann told investors this morning it will look to raise another $8 million from existing shareholders.
AusCann plans to spend the cash on several projects, including clinical studies, expansion of its Australian manufacturing facility as well as a plant in Chile.
It will also pour some of the funds into further research and development of cannabinoid pharmaceuticals as well as the “establishment of medical outreach programs in new international markets”.
AusCann chief executive Elaine Darby told investors the money would “enable us to accelerate our corporate objectives and provide Australian and global markets with efficacious, clinically validated and cost-effective medicinal cannabis products”.
Stockhead has contacted Ms Darby for further comment.
AusCann has the relevant Office of Drug Control licences to cultivate, manufacture and supply final-dose cannabinoid medicines in Australia.
In June it completed its second cannabis harvest in Chile through a joint venture with DayaCann in a facility south of Santiago.
In the March 2018 quarter, the company did not receive revenue receipts from customers and burned through $1.5 million.
It had $11 million in the bank in March and expected to spend $2 million in the June quarter.