The ASX’s biggest pot stocks aren’t making money yet but they’re moving into position
Health & Biotech
Health & Biotech
Australia’s two biggest medical cannabis developers are not yet making sales yet from their core growing businesses, their latest quarterly cashflow results show.
Cann Group (ASX:CAN) which is worth $325 million and AusCann (ASX:AC8) which is valued at $250 million received nothing from customers in the March quarter.
Cann has a commercial agreement with the Victorian government which has promised to buy medical cannabis products for pediatric epilepsy trials.
AusCann has an agreement with pharmaceuticals wholesaler Australian Pharmaceutical Industries (ASX:API).
Both are still formulating the final doses of their products.
“AusCann expects to plant its first Australian crop using imported genetics in Tasmania in 2018 and to have products available in early 2019,” AusCann said.
It plans to have some revenue coming in earlier than that by importing and selling to Australia’s 500 or so registered medical cannabis users.
AusCann plans to import products chronic and neuropathic pain control from Canadian partner Canopy, which it says it will receive “soon”.
Its Chilean joint venture DayaCann will harvest its second crop before the end of June, but so far these crops are intended for trial formulations for the treatment of chronic and neuropathic pain only.
AusCann is burning cash at $1.5 million a quarter and has $11.9 million in the bank.
That gives the company a six-month runway, during which it needs to start making money or raise capital.
AusCann shares dipped 4 per cent to $1.69 on the news of the quarterly report, after spiking 21 per cent in the two trading days beforehand.
Cann Group is also planning to start imports from Canadian partner Aurora, but is also looking to offer an analytics service after signing a deal with Under The Tree Biopharmaceuticals.
Chief Peter Crock told Stockhead he is refitting a second facility in Victoria to enable this service.
While Cann has $82.5 million in cash, up to $60 million of that is intended for its new Victorian facility, the location of which is yet to be decided.
A cash burn rate of $1 million in set to jump to $4.4 million in the June quarter.
Cann shares lifted 1 per cent to $3.09.