Pot stocks are starting to make money; ASX-listed dealers banked $13m last quarter
Health & Biotech
The majority of Aussie pot stocks have started making money, with just six turning in nil receipts in the September quarter.
Of the 28 ASX-listed companies with an active interest in the medical cannabis field, there are 19 with business operations largely based (or promoted as based) around marijuana.
Of those, 13 turned in ‘customer receipts’, a record of how much money they received from customers in a quarter.
>> Scroll down to see who is making moolah and who isn’t
Without including Elixinol Global (ASX:EXL) — the ASX’s only profitable pot stock so far — the remaining 18 were paid a total of $2.9m in the September quarter.
Including Elixinol, they were paid $12.7m.
By contrast the top 13 Canadian pot stocks reported September quarter sales of $C117m ($125m), according to data platform New Cannabis Ventures.
The early green shoots of revenue are starting to attract heavy-duty investors. Though Saul Kaye, founder of Israeli pot private equity investor iCan, says revenue is not as important right now as growth — since the global cannabis market is potentially so large.
Of the large number of reports speculating on the possible size of Australian and global marijuana markets, Prohibition Partners this week suggested that locally it could worth as much as $1.2b a year by 2024 “quickly ramping up” four years later to $3b.
Who is doing what
Elixinol has been increasing its cash burn each quarter since listing January as its production and manufacturing costs have jumped by over $4m this year.
Medlab Clinical (ASX:MDC) was the only biotech to post any receipts thanks to its non-marijuana nutraceutical arm, whose 33 different pills, sachets and mouth sprays deliver about three quarters of total revenue.
There’s considerable speculation over what the catalyst will be that could kick the Australian marijuana industry into high gear.Four of the six companies that reported no receipts were biotechs or pharmaceuticals companies.
Biotechs, like mineral explorers, tend to be pre-revenue as they develop and test the drugs they hope will eventually make them a fortune.
Roots (ASX:ROO) made its first ever sale in October, after the reporting period, while MMJ (ASX:MMJ) makes money from its investments — for example it plans to sell about $4m worth of shares in Canada-listed Harvest One.
Lifespot Health (ASX:LSH) makes it money from sales in Germany of its BodyTel software and app that monitors Internet-connected medical technology, such as an insulin pump, and sends the information to doctors.
The company has bought a cannabis inhaler which it plans to sell as a package with the BodyTel software.
Creso Pharma (ASX:CPH) is making is money out of nutraceutical sales in Europe while Queensland Bauxite’s (ASX:QBL) cash is coming from hemp food sales.
Both Bod Australia (ASX:BDA) and Affinity Energy (ASX:AEB) sourced the majority of their quarterly take from non-cannabinoid products, while THC Global (ASX:THC) is in fact making money from equipment sales as it waits on the last of its cannabis licences from the Office of Drug Control.
MGC Pharma’s (ASX:MGC) receipts were driven by cosmetics and cannabinoid sales.
At the bottom end of the earners are two of the ASX’s biggest pot stocks, Althea (ASX:AGH) and Cann Group (ASX:CAN).
Cann is focused on building the backend of an Aussie pot empire — growing facilities, a research centre and a manufacturing arm — as it sells a small amount of cannabis resin to the Victorian Department of Health and Human Services, which is planning to turn it into a product for children with severe epilepsy.
Althea started importing cannabis products made by its Canadian shareholder Aphria in May and says it now supplies 100 people in Australia.
In the September quarter it was supplying about 79 people. In that quarter it doubled the amount of receipts taken compared to the period March 2017 to June 2018.
eSense Lab (ASX:ESE) has struggled to find its footing after a major boardroom blow up last summer.
The last three quarters have seen receipts over between $5000 and $8000, but they hope to change that with a deal to sell cannabinoid ‘terpenes’ to a UK e-cigarette maker.
|Ticker||Company||Receipts||Operating cash flow||Cash in bank||Sector|
|BDA||BOD AUSTRALIA||141000||($1.5m)||$1.6m||Biotech and lifestyle|
|THC||THC GLOBAL||576000||($1.3m)||$7.6m||Grower and manufacturer|
|MXC||MGC PHARMACEUTICALS||135000||($1.3m)||$8.6m||Biotech and lifestyle|
|QBL||QUEENSLAND BAUXITE||163000||($1.2m)||$5.6m||Hemp and grower|