The pot stock that went from 1c to $1 is now on the ASX chopping block
Health & Biotech
Health & Biotech
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A Chinese medicine company that sold $6000 worth of facial masks in the June quarter is still hoping medicinal cannabis can save it from the ASX chopping block.
Stemcell United (ASX:SCU) shares went insane in March after it announced a possible entry into the cannabis market, advised by controversial “king of cannabis” Nevil Schoenmakers.
The stock jumped from about 1c to $1 on the announcement, before settling back down to the current price of 7c.
This week the company had to respond to a letter from the ASX about whether its operations were enough to justify trading.
“SCU’s Traditional Chinese Medicine business does not appear to be sufficiently advanced to warrant the continued quotation of the entities (sic) securities,” said a letter from ASX listings compliance officer Kimberley Brown on August 3.
In its response on Tuesday, the company said it had made progress carrying out plans for its dendrobium essence products that were outlined to the market in March.
That progress included finalising the ingredients of its dendrobium-essence-infused facial masks, selling 6000 masks and starting production of another 50,000 masks for sale in China.
Dendrobium is a family of orchid plants, some of which are used in traditional Chinese medicine.
The company also reiterated its plans to potentially enter the medicinal cannabis market, either through partnerships or acquisitions.
“There can be no guarantee that either of these initiatives will be successful,” it noted.
The company spent $163,000 in the June quarter, leaving $1 million in cash. It expects to spend $185,000 in the current quarter.
Mr Schoenmakers’ credentials as a strategic advisor were outlined to the market on March 14 as such: “Mr Schoenmakers was referenced in the industry magazine High Times as the ‘King of Cannabis’, and he brings a wealth of sector experience to SCU.
“He was the first cannabis cultivator to expert cannabis seeds from the Netherlands to global markets, and he is credited with creating many of the most popular award winning strains.”
Mr Schoenmakers was issued 10 million shares and a monthly payment of $5000 for his service as a strategic advisor.
Since announcing its intentions in the cannabis sector, the company said in May it had signed a letter of intent with iCAN Israel-Cannabis Limited to negotiate a possible licensing and services agreement and investment of 5 to 10 per cent in iCAN, funded by a planned $2.5 million capital raise.